Organizational buying is a complex process of decision-making and communication. It takes time, involves several members and considerations. Robinson, Faris and Wind have identified eight steps in organizational behaviour.
Example Illustrating the Eight Steps in Organizational Buying Behaviour:
Need recognition is the first step while making a purchase decision. The need may be for a machine which could bring efficiency in production or packing. It can be to provide a cool and comfortable working climate in the office. It may be a transportation need or, any requirement which is essential to carry on with the day to day work. The need can be fulfilled by various alternatives. A transportation need can be fulfilled by a scooter, a car, a mini truck or a van or any other way. Working cool climate can be provided by an air cooler or an air conditioner.
A packing machine can be manual, semi-automatic or automatic. Once the need is identified by a purchase committee, which may consist of the purchase officer, general manager, production manager and others, the type and quantity of the item needed are specified, i.e., the number of pieces to be bought. While specifying these, economic consideration are also important depending upon the work and economy of the company or/firm.
Once these things have been decided, quotations are asked for or, tenders are floated and the offers given by various interested parties which are then scrutinized and analyses on a number of criterion. These may be:
On the basis of the above a few firms are short listed and then again reviewed.
In certain cases there are recommendation by very high authorities which cannot be ignored. Although the order may have been decided in favour of a supplier, but recommendations and other factors may change the decision in favour of another supplier. If supplies are to be spread over the whole year or an extended period of time, an order schedule is prepared,instructing the suppliers to make supplies at required intervals of time. From the above example it is clear that organizational buying differs from consumer buying in many ways. Organization buying has its own characteristics, as given below:
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