8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 1/21
IndustrialIndustrialBuyingBuying
andand
BuyingBuyingBehaviour Behaviour
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 2/21
Buying Center or DecisionMaking Unit (DMU)
Buying Center or Decision
Making Unit ( DMU )Consists of Those Peoplein the Organization who
are Directly or IndirectlyInvolved in the DecisionMaking Process
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 3/21
Buying Center or DecisionMaking Unit (DMU)
Concept of Group DecisionMaking
Vertical InvolvementLateral InvolvementTask DifferentiationIntegrative ComplexityCentrality of DMU
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 4/21
Communicating BenefitsCommunicating Benefits
Customer BenefitCustomer BenefitCompetitive PriceCompetitive Price
High QualityHigh Quality
JIT DeliveryJIT DeliveryWillingness for ChangesWillingness for Changes
Factory at 4 LocationsFactory at 4 Locations
EE-- CommerceCommerceCustomized ManufactureCustomized Manufacture
24/7 Response24/7 Response
SellerSeller
Buying CenterBuying CenterC F OC F O
F M/P M / ForemanF M/P M / Foreman
C E OC E OPurchase ManagerPurchase Manager
Marketing ManagerMarketing Manager
Logistics OfficerLogistics OfficerWarehouse ManagerWarehouse Manager
Maintenance Mgr.Maintenance Mgr.
BuyerBuyer
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 5/21
W ebster and W ind Modelof Organizational Buying
Behaviour - A very Comprehensive Model
- Identifies many Key VariablesW hile Developing MarketingStrategies
Major Far-reaching Decisions are:1. Choice of Suppliers2. Make, Lease or Buy Decisions
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 6/21
E nvironmental Variables
1. Physical
2. Technological
3. E conomic
4. Political
5. Legal6. Cultural
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 7/21
E nvironmental Variables
7. Labour Unions
8. Cultural
9. Customer Demands
10. Competition
11. Supplier Information
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 8/21
Organizational Variables
1. Organizational Objectives2. Organizational Goals3. Organizational Structure4. Purchasing Policies
and Procedures5. Degree of Centralization
in Purchasing6. E valuation and Reward
Systems
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 9/21
E SI / E PI Programme
E arly Suppliers / PurchasingInvolvement Programme
a. Suppliers Involvement inDeveloping Design or Specification
b. Cross FunctionalDevelopment Teams
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 10/21
E SI / E PI Programme
c. Selecting Right Suppliers asPartners
d. Recommending Alternativeson Sourcing / Training
e. Identifying Core Competenciesof the Company
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 11/21
Buying Decision Process( Buy phases )
7. Selection of an Order Routine- Order Placement
- Frequency- Delivery- Payment Terms
8. Performance Feedback andPost Purchase E valuation
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 12/21
W ho are Buyers
Business units:-1. Industrial distributors
2. OriginalE
quipmentManufacturer (O E M)3. User
Institutional unitsGovernmental unitsCooperative Societies
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 13/21
Business units
1. Manufacturers2. Construction Firms3. Commercial establishments4. Transportation companies5. Service companies (hotels,
laundries and Recreationalenterprises)
6. Professional group
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 14/21
Institutional Units
HospitalsE ducational Institutions,
Schools, Colleges,Universities
Research Stations
Prisons, W elfare Homes
Air Ports, Sea Ports
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 15/21
Governmental units
Units of government may bedivided into
Departments of Central, stateand local governmentsAdministrative units
Armed Forces, Para MilitaryUnitsAid to Friendly Countries
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 16/21
Buying Orientation
1. Lowest Price
2. Gain Power in the Market in
terms of USP and Product
Features3. Minimizing Risk
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 17/21
Procurement Orientation
Collaborative Relationship
W orking Closely with other
functional areas
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 18/21
Supply Chain Management
Deliver value to end user.
Outsource Non-core activities.
Support Collaborative
Relationship.
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 19/21
Major Consideration for Purchase Decision
1. Consistency of Quality
2. Lowest price3. Time Saving
4. Assurance of Supply5. Suppliers Relationship
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 20/21
Major Consideration for Purchase Decision
5. Service- Prompt and Accurate
Information from theSupplier - Application or Technical
Assistance- Spare Parts Availability- Repairs and Maintenance
Capability- Training, if Required
8/8/2019 4+ +Industrial+Buying+and+Buying+Behaviour
http://slidepdf.com/reader/full/4-industrialbuyingandbuyingbehaviour 21/21
Major Consideration for Purchase Decision
6. Personal Objectives- Job Security
- Salary, Increments- Social Considerations
* Friendship
* Personal Favour * Mutually Beneficial
Relationship