chapter 4 Flashcards
the decision-making process by which formal organizations establish the
need for purchased products and services and by which they identify, evaluate, and choose among
alternative brands and suppliers
Organizational buying
consist of all the organizations that acquire goods and services used in the pro-
duction of products or services that are sold, rented, or supplied to others.
Business markets
Business markets contrast sharply with consumer markets in some ways, however. They have:
Fewer but larger buyers
Close supplier–customer relationships
Professional purchasing
Multiple buying influences
Derived demand
Inelastic demand
Fluctuating demand
Geographically concentrated buyers
Direct purchasing
TYPES OF BUYING DECISIONS
Straight rebuy
Modified rebuy
New buy
the purchasing department reorders items like office supplies and bulk chemicals on a routine basis and chooses from suppliers on an approved list. The suppliers make an effort to maintain product and service quality and often propose automatic reordering systems to save time. Suppliers attempt to offer prospective customers something new
or exploit dissatisfaction with a current supplier. Their goal is to get a small order and then enlarge their purchase share over time.
Straight rebuy
wants to change product specifications, prices, delivery requirements, or other terms. This usually requires additional negotiation and can lead to a new purchase agreement or, in some cases, to a disruption of the business relationship and a change in suppliers.
Modified rebuy
faces some risk when acquiring a product or service for the first time (e.g., an office building, a new security system). The greater the risk or cost, the larger the number of buying-decision participants, the greater their information gathering—and the longer
the time it takes to make a decision
New buy
The decision-making unit of a buying organization.
It consists of “all those individuals and groups who participate in the purchasing decision-making process, who
share some common goals and the risks arising from the decisions.
buying center
Users or others in the organization who request that something be purchased.
Initiators
Those who will use the product or service
Users
People who influence the buying decision, often by helping to define specifications
and providing information for evaluating alternatives.
Influencers
People who decide on product requirements or on suppliers.
Deciders
People who authorize the proposed actions of deciders or buyers.
Approvers
People who have formal authority to select the supplier and arrange the purchase terms.
Buyers
People who have the power to prevent sellers or information from reaching members
of the buying center
Gatekeepers
