ORGANISATIONAL BUYING SITUATIONS Consumer Behaviour

An organization buys a variety of products and services. These may include a variety of items, some of these are mentioned:

  • Raw material: Steel, aluminium, iron ore, etc.
  • Major capital items: Machinery, plant, etc.
  • Minor capital items: Pumps, valves.
  • Fabricated components and parts, and auto-assemblies: Castings, forgings, small parts of iron, rubber, plastic, etc.
  • Processed chemicals: Fluxes for melting, powders, chemicals.
  • Consumables: Lubricating oils, electrodes, fuel, gas, etc.
  • Office equipment: Paper, copier, type writers.
  • Services: Transport, travel, touring, etc.

Basically there are three types of buying situations, according to Robinson, Fari’s and Wind.

Straight rebuy situations
In this routine, orders are placed for office supplies, raw materials, other items of daily use, where the supplier is known and a procedure is already laid down, which is followed in a routine manner.

Modified rebuy situations
Buyers may change or modify the product according to the situation, e.g., nylon rope for ordinary rope. Plastic washers in place of steel or brass washers, aluminium instead of copper, hydraulic in place of mechanical. This may be done for economic consideration, or for the ease of procurement, or to modify or change the product. The change may also be due to external or internal environmental changes.

New task
When a task is performed, items may be bought without previous experience and for the first time. These could be new machines like computer or Fax machines. The need for such a product may not have occurred previously. For a new task, a new set up and new items are necessary, which may not have been purchased before.
Fisher gave a model and identified two factors for buying decisions. These are product complexity and, commercial uncertainty. This gives a combination of four situations as shown:
The four quadrants shown above require different emphasis as shown:

fisher's-model

  • In quadrant (No.1): There is low complexity and low uncertainty, in such a situation Buyer emphasis must be given.
  • In quadrant (No. 2): There is high uncertainty and low complexity, in such a situation policy makers emphasis is required.
  • In quadrant (No. 3): There is low uncertainty and high complexity, in such a situation there should be technological emphasis.
  • In quadrant (No. 4): When both uncertainty and complexity is high, there should be emphasis on total involvement with the product.
  • Selection of a supplier
    In industrial buying, there are many considerations for selecting a supplier. Some suppliers are old suppliers and already listed and registered with the establishment. Other suppliers are also considered. They are considered on a number of criteria. These are:
    1. Price.
    2. Reliability of delivery dates.
    3. Quality of the product and maintenance of quality.
    4. Suppliers reputation in the market.
    5. Quick response to the needs of the customer.
    6. Capability of the supplier to supply regularly on increase on demand.
    7. Supplier’s flexibility.
    8. Consistency in dealing with supplies.
    9. Rejection rates.
    All these attributes are considered and the supplier is very carefully chosen. If the supplies are delayed the business fails, which is not tolerated by any organization.


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