Organisation buying behaviour is different from individual buying behaviour. What type of buying system has been used by organisation and what system they have adopted is discussed in the presentation. The factor which considering by purchase manager while order placement has also been discussed here.
1. PRESENTATION ONORGANISATIONAL BUYING BEHAVIOUR
2. MBA 3rd Semester
3. To know the meaning of Organisational Buying Behaviour. Characteristics of Organisational Buying Behaviour. A comparative analysis of Organisational Buying vs Consumer Buying. To know the actual process of Buying System and the factors that they take into consideration for placing an order with reference to the Retail outlet The Computer Terminal Guwahati.
4. May be defined as The decision making process by which formal organisations establish the need for purchased products and services and identify , evaluate and choose among alternatives brands and suppliers.
5. Organisational buyers buy goods and services to reprocess a product or service and sell it to the next buyer. Organisation buyers consists of following Organisation: Manufacturers and industrial markets. Wholesalers and retailers Government agencies. Non-governmental organisations.
6. It is a rational process. It is done in large quantities. More individuals are involved in buying process. Purchase criteria is well defined. Extensive contact between Buyers and Sellers.
7. CHARACTERISTICS DIMENSION OF BUYING ORGANISATIONAL BUYERS CONSUMERMarket Characteristics Large numbers of consumer Few numbers of in the market organisation in the market Demand is driven on account Demand is a derived of personal needs of the demand and will involve large individual purchasesProduct or Service Products or services are such Products and services areCharacteristics that can satisfy individual specification based and will demand need technical precision Generally brought as The products purchased finished goods generally raw materials/semi finished or materials to be used in the running of another business.
8. Proprietor : Mr. Upanta Das Established : 26th July, 2001 Location : Goswami Service, Guwahati Business Type : Computer and Computer accessories Retailer Turnover : 4 Crores Annually (approx)
9. CENTRALISE D BUYING SYSTEM
10. Centralized purchasing is a method of procurement of all types of materials, supplies, equipment etc. through a single department (not necessarily centrally located) under the direct control and superintendence of one responsible person. He is directly accountable to the top management for all duties falling within the broad area of purchase function.
11. Supplier WarehousePlant A Plant B Plant C Plant D
12. Bulk buying strengthens the bargaining position of the buyer Advantage of the quantity discount can be tapped It will reduce the inventory carrying costs Lower transportation cost per unit Duplication of efforts in buying function is eliminated Skill development of purchase head No competition within units Easy to procure from foreign supplier
13. Problem when specific requirement needed Delay in receiving the materials Problems to use local resources in small quantity Helps for autocratic management style Central purchasing staff may not be expert in buying various types of items Loss of local control Creates another level of hierarchy Suitable more for small organization
14. BRAND OF COMPUTER AND DISTRIBUTORS NAME COMPUTER ACCESSORIESHP-HEWLETT-PACKARD Assam IT Computer Appliances Link info ComSONY VAIO DatamationAPPLE DatamationDELL InfotechLOGITECH Neuratic Rashi PerpetualFRONTECH Jupiter InternationalHP PRINTER Jupiter Infology Data Infotech
15. FACTORSExternal Environmental 1. Economic ConditionsFactors 2. Regulatory Changes 3. Social Environment 4. CompetitionInternal Environmental 1. Goals and ObjectivesFactors 2. Policies and Procedures 3. Technological LevelsSituational Factors 1. Time Factor 2. Current Financial Situations 3. Availability 4. Special Offers
16. Economic Conditions The fluctuations in the money markets and the interest rates have a major impact on the buying strategies. The interest rates and organizational buying have an inverse relation. In most cases, an increase in the interest rates may bring about a drop in the buying.
17. Regulatory Changes Any changes in the corporate laws, rules and regulations will also influence how, when and what the organizations buy. There are also regulatory changes that may change their buying patterns to stay in-line with the new regulations.
18. Social Environment Societies and cultures are everevolving, and every businesshas to change its practices andprocedures to meet up with thesocietal changes.Social environment affect thebuying patterns of theorganizations buying behaviour.
19. Competition Todays business is all aboutbeating competition and stayingahead. When an organizationscompetitors move on to a newerproduct or service its very likelyfor the organization to change itstrends too and thus its buyingpattern will change accordingly.
20. Organisation Goals and Objectives The goals and objectives of an organization are major determinants as to how and what the organization will purchase. Company whose goal is to deliver quality products may have a very contrasting buying pattern, and they will focus more on the quality issues than on the price advantage.
21. Organisation Policies and Procedures How the purchase order is routed, depends on the organizations policies. How does the buying procedure begin, who will participate and who has the ultimate authority to decide on the purchase are all dependent on the policies and procedures of the organization.
22. Technological Levels Whenever making new purchases, organizations take into consideration their current technology. Purchases are meant to replace the current technology with a newer version, so their buying decision will be influenced by what level of technology they currently own. organizations try to ensure that all new purchases being made are technologically compatible with their existing technology.
23. Time Factor Sometimes, organizations dont have all the time to follow the detailed buying procedure. If the organization needs a replacement for equipment that broke down suddenly, it may decide to place its order with some existing supplier or a supplier that is at close proximity.
24. Current Financial Situation If the organization having problem in financial condition, it may decide to place its order with one of its existing supplier who offers extended credit. if the organization cannot spare out enough money for a certain purchase, it may opt for a readily available cheaper version that fits into its budget.
25. Availability Some buying decisions can wait while others cannot, thus if the supplier cannot make available the exact product by the desired date, the organizational buyers may shift to a new supplier or to a more readily available alternative.
26. Special Offers Special offers being given by a supplier may also be one of the situational factors affecting the buying decision.
27. Organizational buying behaviour is a very complex area. However, an understanding of the key factors are fundamental to marketing strategy. In large industrial, commercial and retail organisations, use Centralized Buying system The buyer in an organisation is a part of the system and he has to operate within the parameters set forth by the organisation. The organizational buying behaviour gets affected by the industry customs and traditions, and the culture that prevails in the commercial and business circles.