Industrial Buying Behavior

Industrial Buying Industrial Buying BehaviorBehavior

ByBy

Raveendra Rao.K.Raveendra Rao.K.

IM KRR 2011IM KRR 2011

Overview of the PresentationOverview of the Presentation

1.1. Industrial buyingIndustrial buying

2.2. General Purchase Procedures General Purchase Procedures

3.3. Buy Grid ModelBuy Grid Model

4.4. Interpersonal dynamics in Interpersonal dynamics in Industrial buyingIndustrial buying

5.5. Conflict resolution strategies Conflict resolution strategies

6.6. Difficulties in industrial buyingDifficulties in industrial buying


Industrial BuyingIndustrial Buying

The purchasing decision process The purchasing decision process that organizational buyers apply that organizational buyers apply when confronted with different when confronted with different buying situations. buying situations.

The various role of buying influences The various role of buying influences in the purchasing decision process in the purchasing decision process

The criteria that organizational The criteria that organizational buyers apply in making purchasing buyers apply in making purchasing decisions decisions


Buy Grid ModelBuy Grid Model

Buying Buying SituationsSituations

Straight rebuyStraight rebuy

Modified rebuyModified rebuy

New taskNew task

Routine reorders Routine reorders from approved from approved vendor listvendor list

Low involvement, Low involvement, minimal time minimal time commitmentcommitment

Example:Example: copier copier paperpaper


Contd….Contd….

Buying SituationsBuying Situations



New taskNew task

Specifications, prices, Specifications, prices, delivery terms or other delivery terms or other aspects require aspects require modification modification

Moderate level of Moderate level of involvement and time involvement and time commitmentcommitment

Example:Example: desktop desktop computerscomputers


Contd….Contd….

Buying SituationsBuying Situations



New taskNew task

Purchasing a product or Purchasing a product or service for the service for the firstfirst time time

High level of involvement High level of involvement

and time commitment; and time commitment; multiple influencesmultiple influences

Example:Example: selecting a web selecting a web site design firm or site design firm or consultantconsultant


Contd….Contd….

Eight Buyphases of Industrial Buying

Problem Recognition

General Need Description

Product Specification

Supplier Search

Proposal Solicitation

Supplier Selection

Order-Routine Specification

Performance Review


Buying CentreBuying Centre

Gatekeepers

Influencers

Users

Initiators

Buyers

Deciders

Approvers

Buying Centre - Includes all members of the organization who play any of sevenroles in the purchase decision process


Major influences on buying behaviorMajor influences on buying behavior


Purchasing Influence on Buyer’s Purchasing Influence on Buyer’s Behavior Behavior

Material requirement planning Material requirement planning

Just in time purchasing Just in time purchasing

Centralized PurchasingCentralized Purchasing

Buyer Technology Buyer Technology


Conflict Resolution Strategies Conflict Resolution Strategies

Party’s attempt to Satisfy others Concern

Compromising

Collaborating

Accommodating

Competing

Avoiding


Party’s attempt to Satisfy Own Concern

Issues in Industrial BuyingIssues in Industrial Buying

1. Size of the Market

2. Geographic Concentration

3. Competitive Nature

4. Technical Aspects


ExerciseExerciseExplain the following situations of Explain the following situations of purchase with buy-grid modelpurchase with buy-grid model

1.1.MU procuring latest security system MU procuring latest security system software for monitoring activities in software for monitoring activities in campus.campus.

2.2.KH buying 3D CT scanner replacing the KH buying 3D CT scanner replacing the 2D scanner at radiology department.2D scanner at radiology department.

3.3.MIM buying stationery for workshop to MIM buying stationery for workshop to be conducted at Institute.be conducted at Institute.


4. MU purchasing lap top for new 4. MU purchasing lap top for new batch of students and staff.batch of students and staff.

5. TVS motors purchasing 5. TVS motors purchasing carburetor for their new model of carburetor for their new model of motor bike to be launched during motor bike to be launched during January 2012.January 2012.

6. Memento purchased by MIM for 6. Memento purchased by MIM for their annual day.their annual day.

7. Building maintenance software 7. Building maintenance software for New building of MIM.for New building of MIM.


Thank You


Industrial Buying Behavior

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