1. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

2. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Organizational Buying Process 1. Problem Recognition 2. General Description of Need 3. Product Specifications 4. Supplier Search 5. Acquisition and Analysis of Proposals 6. Supplier Selection 7. Selection of Order Routine 8. Performance Review

3. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Three Buying Situations (slide 1 of 4) 1.New task 2.Modified rebuy 3.Straight rebuy

4. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Three Buying Situations 1. New Task (slide 2 of 4) New task—the problem or need is totally different from previous experiences. –Significant amount of information is required. –Buyers operate in the extensive problem solving stage. Buyers lack well defined criteria. Lack strong predispositions toward a solution.

5. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Three Buying Situations 2. Modified Rebuy (slide 3 of 4) Modified rebuy—decision makers feel there are benefits to be derived by reevaluating alternatives. –Most likely to occur when displeased with the performance of current supplier. –Buyers operate in the limited problem solving stage. Buyers have well defined criteria.

6. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Three Buying Situations 3. Straight rebuy (slide 4 of 4) Straight rebuy—the problem or need is a recurring or continuing situation. –Buyers have experience in the area in question. –Require little or no new information. –Buyers operate in the routine problem solving stage.

7. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Buying Decision Approaches Causal purchases…involve no information search or analysis. Routine low priority…decisions are more important and involve a moderate amount of analysis.

8. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Enables individual employees to buy online while the company retains control of the purchasing process. The Buy-Side Requisitioning Process

9. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Forces Influencing Organizational Buying Behavior Environmental Forces Organizational Forces Group Forces Individual Forces Organizational Buying Behavior Economic Outlook: Domestic & Global Pace of Technological Change Global Trade Relations Goals, Objectives, and Strategies Organizational Position of Purchasing Roles, relative influence, and patterns of interaction of buying decision participants Job function, past experience, and buying motives of individual decision participants A projected change in business conditions can drastically alter buying plan.

10. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations With rising competitive pressures managers are using rigorous cost modeling approaches to identify factors that drive the cost of purchased goods and services. The Buygrid Framework for Organizational Buying Situations

11. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Questions for the Industrial Salesperson 1.Which member takes part in the buying process? 2.What is each members relative influence in the decision? 3.What criteria is important to members in the evaluation process?

12. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Members of the buying center assume different roles throughout the procurement process. Clues for Identifying Powerful Buying Center Members

13. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Selective Process & Cognition  Selective exposure.  Selective attention.  Selective perception.  Selective retention.

14. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Perceived Risk Components 1.Uncertainty about the outcomes of a decision. 2.The magnitude of consequences associated with making the wrong selection.

15. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations The behavior of organizational buyers is influenced by environmental, organizational, group, and individual factors. Major Elements of Organizational Buying Behavior