marketing buying system

PRESENTATION ON ORGANISATIONAL BUYING

BEHAVIOUR

PRESENTED BY

MBA 3rd Semester

PARTHA PRATIM MAHANTA

OBJECTIVES

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.

ORGANISATONAL BUYING BEHAVIOUR

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.”

ORGANISATIONAL BUYERS

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.

CHARACTERISTICS OF ORGANISATIONAL BUYING

BEHAVIOUR

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.

COMPARATIVE ANALYSIS OF ORGANISATIONAL BUYING AND

CONSUMER BUYINGCHARACTERISTICS DIMENSION OF

BUYING CONSUMER ORGANISATIONAL BUYERS

Market Characteristics • Large numbers of consumer in the market• Demand is driven on account of personal needs of the individual

• Few numbers of organisation in the market• Demand is a derived demand and will involve large purchases

Product or Service Characteristics

• Products or services are such that can satisfy individual demand• Generally brought as finished goods

• Products and services are specification based and will need technical precision• The products purchased generally raw materials/semi finished or materials to be used in the running of another business.

ORGANISATIONAL BUYING SYSTEM WITH REFERENCE TO RETAIL OUTLET

THE COMPUTER TERMINAL

COMPUTER TERMINAL

Proprietor : Mr. Upanta Das

Established : 26th July, 2001

Location : Goswami

Service, Guwahati

Business Type : Computer and

Computer

accessories Retailer

Turnover : 4 Crores

Annually (approx)

BUYING SYSTEM OF THE COMPUTER TERMINALS

CENTRALISED BUYING SYSTEM

CENTRALISED BUYING SYSTEM

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.

FLOW CHART OF CENTRALISED BUYING SYSTEM

Supplier

Warehouse

Plant B Plant A Plant C Plant D

ADVANTAGES OF CENTRALIZED BUYING

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

DISADVANTAGES OF CENTRALIZED BUYING

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

SOME OF THE CENTRALISED SUPPLIERS/DISTRIBUTORS FOR MULTIPLE BRAND OF GUWAHATI

BRAND OF COMPUTER AND COMPUTER ACCESSORIES

DISTRIBUTOR’S NAME

HP-HEWLETT-PACKARD Assam ITComputer AppliancesLink info Com

SONY VAIO Datamation

APPLE Datamation

DELL Infotech

LOGITECH NeuraticRashi Perpetual

FRONTECH Jupiter International

HP PRINTER Jupiter InfologyData Infotech

FACTORS CONSIDERING FOR PLACING AN ORDER BY THE

COMPUTER TERMINALSFACTORS

External Environmental Factors

1. Economic Conditions

2. Regulatory Changes

3. Social Environment

4. Competition

Internal Environmental Factors

1. Goal’s and Objectives

2. Policies and Procedures

3. Technological Levels

Situational Factors 1. Time Factor2. Current Financial

Situations3. Availability4. Special Offers

EXTERNAL ENVIRONMENTAL FACTORS

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.


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.


Social Environment Societies and cultures are

ever evolving, and every

business has to change its

practices and procedures to

meet up with the societal

changes.

Social environment affect the

buying patterns of the

organizations buying behaviour.

Competition Today’s business is all about

beating competition and staying

ahead.

When an organization's

competitors move on to a newer

product or service it's very likely

for the organization to change its

trends too and thus its buying

pattern will change accordingly.


INTERNAL ENVIRONMENTAL FACTORS

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.


Organisation Policies and

Procedures

How the purchase order is routed,

depends on the organization's

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.


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.

Time Factor

Sometimes, organizations don’t 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.

SITUATIONAL FACTORS

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.

SITUATIONAL FACTORS

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.

SITUATIONAL FACTORS

Special Offers

Special offers being

given by a supplier

may also be one of

the situational

factors affecting the

buying decision.

SITUATIONAL FACTORS

CONCLUSION

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.

THANK YOU

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