Nature of Industrial Buying: Industrial Marketing

URDANETA CITY UNIVERSITY COLLEGE OF ACCOUNTANCY AND BUSINESS ADMINISTRATION San Vicente West, Urdaneta City 2428 Pangasinan, Philippines Telefax No. (075) 568-7612 Website www. ucu. edu. com BY IAN JOSEPH ROBISO MARC TON ALEXIS PEREZ MARITA LABIANO KENT NOEL JAVIER ILENE GONZALES BEVERLY ROSARIO RICHARD SUMERA LOVELY SORIA BSBA-III Major in MARKETING MANAGEMENT SUBMITTED TO MR. LADI GEORGE L. GASCON INSTRUCTOR Nature of industrial acquire Industrial Marketing Buy Phase in Industrial Buying * Buying is an organizational end making cover There be 8 Phases in Buying Decision Process * In Industrial market the buy decision making process observable sequential stages, understanding these chassis helps developing appropriate selling strategy The Buying Decision of organization is influence by environmental factors, organizational factors, interpersonal factors and personal factors * Personal e. g. Age, Education, Income, Personality, Risk Attitude, Culture * Inter-Personal e. g. In terest, Authority, Status, Empathy, Persuasiveness * Organization e. g.Objective, Policies, Procedures, Organization Systems and social organization * Environment e. g. Level of Demand, Economic Viewpoint, Technology Change, Political Development, Social Responsibility 8 Phases in Industrial Buying * Identify the problem industrial marketers identify problems in buying organization and suggest how problem is? * public need Description in one case the problem is recognized next is to resolve the problem. For technical products, the technical. * proceeds Specification developed a precise statement of the product or service, selecting right suppliers recommend. Suppliers Re expect search of potential suppliers from vertical hubs, functional hubs, direct extra link to major suppliers ,trade * Analyze Suppliers Proposal once the qualified suppliers decided, the buying organization takes the request for proposals. * Suppliers Selection Evaluation of proposals of competing sup pliers and select suppliers * Selection of Order And routine placing orders w/ selected suppliers, frequency of the order placement, aims of inventory follows. Performance Review performance feedback of the suppliers take place and built in bed purchase evaluation Organizational Purchase Situation * New Task a Situation that the companionship is buying the item for the first time. The buying organization will typically have had little run through with the product or service. The risk involved is more, decisions may take longer time and top caution is involved. * Modified Re- Buy This situation occurs when the organization is not satisfied with the performance of the existing suppliers.Search information to the highest degree alternative source of supply. The change I supplier is likely to include several representatives, including mid level management and evaluative criteria be analyzed. * Straight Re-Buy Buying products or services continuously and purchases that are m ake in the past. Repeat orders with the supplier. The reordering process may be completely automated or make routinely by clerical personnel. Purchases are often handled under a contract and price or consistently the dominant evaluative criteria. Participants in the Business Buying ProcessParticipants in the organizational buying process play asmany as seven different intentions, namely those ofinitiator,influencer, approver, user, decider, buyer andgatekeeper * Initiators get by a problem or a need. The Initiator can be any individual in buying firm. * Influencers Individuals influence the buying decision. Technical people such as quality control engineers, soma engineers have considerable influence on purchase decision. * Deciders The actual buying decisions are made by the deciders. They are one or more individuals involved in the buying decision.Senior executives may become deciders. * Buyers Buyers obtain quotations from suppliers, evaluate, negotiate, process purchase, orders, advance delivers and implement purchase policies. * Users Usersalsoplay aroleofinitiators Individuals who use products or services Define specifications ofneeded products * Approvers Approverendorse and agree to the purchaseandalso play arole ofdeciders * Gatekeeper Gatekeepers control the flow ofinformation regarding products and services and control the buying center Assistants orthird-year personofpurchase managersKey Members of Buying Center * Top Management Executives * Managing Director, Presidents, Vice President orGeneral managers * Approve purchase, decide guidelines and purchase policy * Technical People * Technical people are aimengineers, production, quality control,R&Dmanagers * Specify products, technical evaluation, feedback on product supplied, negotiate with suppliers * Purchase/ tangible Department Senior executives, junior levels,purchaser officers or assistants * Coordinate with technical people, topmanagement, accounts as puff up the suppliers or v endors * Accounts/Finance for finalizing thefinancial approvals, mode ofpaymentandinsuranceof bankguarantees * Marketing * Are the influencers in the buying process Summary * The industrial marketing need to understand the purchasing objectives and purchasing activities of the industrial buyers. The industrial buyers are influenced by both purchasing objective of the firm and personal objectives. The industrial buyers are influenced by many factors, the major factors like environmental factors, organizational factors, interpersonal factors and personal factors. * There are 3 common types of buying situations including new task, modified re-buy and straight re-buy. * There are 8 phases of buying decision making process include Initiator, Influencer, Approver, User, Decider, Buyer and Gatekeeper. The industrial markets should identify the key members of buying amount in each buying decision.