ORGANISATIONAL BUYING AND BUYING BEHAVIOUR

a)Straight rebuy  The buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department. b)Modified rebuy  The buyer wants to modify the product specifications, prices, terms, or suppliers. The modified rebuy usually involves more decision participants than does the straight rebuy. c)New Task Situation  A company buying a product or service for the first time faces a new- task situation. In such cases, the greater the cost or risk, the larger than number of decision participants and the greater their efforts to collect information will be.  The buyer makes the fewest decisions in the straight rebuy and the most in the new-task process.

 The decision-making unit of a buying organization is called its buying center: (all the individuals and units that participate in the business decision-making process.)  The buying center includes all members of the organization who play any of five roles in the purchase decision process.  Users are members of the organization who will use the product or service.  Influencers often help define specifications and also provide information for evaluating alternatives.  Buyers have formal authority to select the supplier and arrange terms of purchase.  Deciders have formal or informal power to select or approve the final suppliers.  Gatekeepers control the flow of information to others.

 Anticipation or recognition of a problem  Determination of the characteristics and quality of needed items  Description of the characteristic and quality of needed items  Search for and qualification of potential sources  Acquisition and analysis of proposals  Evaluation of proposals and selection of suppliers  Selection of an order routine  Performance feedback and evaluation

 Price  Price must consistence with the value of a product  Services  Service such as technical training, availability of spare parts, repair capability, on time deliveries  Quality  Search for quality levels that are consistent with specifications and the intended use of the product  Assurance of supply  Steady supply of parts and material is paramount importance to prevent the possibility of plant shutdown caused by an interruption in the flow of supplies.  Reciprocity  Buyer and seller reach an agreement on an exchange off business that is mutually beneficial.

 Differences in role orientation  Different areas of functional responsibility, each individual has a different perception of his or her role in the decision making  Tend to view the importance of the various buying criteria differently  Differences in information exposure  Expectation and objectives are influence by the type and source of information exposure  Information is also subject to the individual’s cognitive process of selective distortion and retention

 The categorical method  Based on the experience and opinions of the user department  Evaluation is subjective rather than objective  A list of significant performance factors is drawn up, and a grade of plus, minus or neutral is assign to each factor  Non quantitative, so it is inexpensive way to make an evaluation  Subject to perceptual biases  The weighted-point method  Assign weights to the different evaluation criteria  Quantitatively used to compare supplier  Evaluation criteria can be proportioned to correspond with the values of the firm  Cost ratio method  All identifiable purchasing costs are related to the value of product receive.  When the ratio of costs of products is high, the supplier’s rating is low. When the ratio is low, the supplier’s rating is high  Buying organization assigns a minus(-) weight for favorable service and plus(+) for unfavourable service

 Competing is assertive and uncooperative – an individual pursues his or her own concerns at another person’s expense. This is a power–oriented mode, in which one uses whatever power seems appropriate to in one’s own position – one’s ability to argue. ‘Competing’ might mean “standing up for your rights," defending a position that you believe is correct, or simply trying to win.  Accommodating is unassertive and cooperative – the opposite of ‘competing’. When ‘accommodating’, an individual neglects their own concerns to satisfy the concerns of the other person; there is an element of self–sacrifice in this mode. ‘Accommodating’ might obeying another person’s order when one would prefer not to, or yielding to another’s point of view.  Avoiding is unassertive and uncooperative – the individual does not immediately pursue their own concerns or those of the other person. They do not address the conflict. ‘Avoiding’ might take the form of diplomatically sidestepping an issue, postponing an  issue instead of better digging into an issue to identify the underlying concerns of the two individuals and to find an alternative, which meets both sets of concerns.

 Collaborating between two persons might take the form of exploring a disagreement to learn from each other’s insights, concluding to resolve some condition which would otherwise have them competing for resources, or confronting and trying to find a creative solution to an interpersonal problem. The desire to fully satisfy the concerns of both parties-sharing responsibilities, reaching a mutually beneficial agreement  Compromising is intermediate in both assertiveness and cooperativeness. The objective is to find some expedient, mutually acceptable solution, which partially or short of total satisfaction of both parties