Module 3: Organizational Buying Process Flashcards
decision-making unit (DMU)
A group of people within an organization who make business purchasing decisions
buying center
Also called decision-making unit (DMU), brings together all those members of an organization who become involved in the buying process for a particular product or service
selling centers
Functional representation that supports a sales person to create a team-selling approach
economic buyer
The individual decision maker or group within the customer organization who controls the budget and writes the checks for new product purchases
infrastructure buyer
Someone who makes sure that purchasing rules defined in corporate governance procedures are followed
user buyer
Someone who influences the buying decision as the person who will actually use the solution after the purchase decision is made
purchasing managers
An employee within a company, business or other organization who is responsible at some level for buying or approving the acquisition of goods and services needed by the company
procurement officers
Persons who are responsible for the management, administration, and supervision of the company’s acquisition programs
merchandisers
A staff member in a retail firm who is responsible for buying goods or products and displaying them in the store
stakeholders
A person, a group, or an organization who can affect or be affected by the organization’s actions, objectives, and policies
Initiators
Individuals who suggest purchasing a product or service for a business.
These are the people within the organization who first see the need for the product. But they do not stop there; whether they are able to make the final decision of what to buy or not, they start the process. Sometimes they initiate the purchase by simply notifying purchasing agents of what is needed; other times they must lobby executives to consider making a change.
Users
Individuals within an organization who actually use the product.
These are the people and groups within the organization who actually use the product. Frequently, one or more users serve as an initiator in an effort to improve what they produce or how they produce it, and they certainly have the responsibility for implementing what is purchased.
Influencers
Individuals who have experience or expertise that can help improve the buying decision.
People who may or may not use the product but have experience or expertise that can help improve the buying decision.
Gatekeepers
Individuals who will decide if and when one gets access to members of the buying center
Decision Makers
The person who makes the final purchasing decision.
The decision maker is the person who makes the final purchasing decision. The decider might or might not be the purchasing manager. Purchasing managers are generally solely responsible for deciding upon routine purchases and small purchases.
Buyers
Buyers are the people who sign the contract. They differ from the decision maker in that they are focused on the financial aspects of the purchase and how the purchase can positively impact organizational metrics. The buyer makes the selling transaction with the seller.
Stages of B2B Buying Process
1- Recognize the need 2- Define the Need 3- Search for suppliers 4- Bid analysis 5- Supplier Selection 6- Order Placement 7- Performance Review
single-sourced supplier
The use of a one supplier to provide 100 percent of a firm’s products and services even when alternative suppliers are available
request for proposals (RFP)
An invitation to submit a bid to supply a good or service
Producers
A company that purchases parts, products, or ingredients to produce other goods and services to sell to other companies or consumers
Resellers
A company that buys finished goods to sell, lease, or rent to other companies or consumers
value-added resellers (VARs)
A reseller that adds features or service to an existing product and sells it
Organizations
A government agency or nonprofit group that purchases products or services to serve or sell to its constituents
Business-to-government (B2G) markets
When companies sell to local, state, and federal governments
prime contractors
Those that hold a government vetted contract directly
subcontractors
Sellers that do business with another company that holds the direct contract with the government
straight rebuy
The duplicate purchase of the identical goods in the identical amount under the identical terms from the identical supplier
new task purchase
A business buying situation in which the buyer purchases a product or service for the first time
modified rebuy
A buying situation in which an individual or organization buys goods that have been purchased previously but changes other element of the previous order
Functional relationships
Limited, ongoing relationships that develop when a buyer continues to purchase a product from a seller out of habit, as long as its needs are met
Affiliative selling relationships
A situation where the buyer needs extensive expertise from the seller to make a decision
Strategic partnerships
A partnership in which the buyer and seller commit resources to generate growth for both parties
Alliance agreements
A formal agreement among companies who want to share resources to create a competitive advantage
Joint R&D agreements
Businesses join to develop a specific product or service
Co-marketing agreements
An agreement where companies share resources to market their products together
Minority investments
An investment by one organization in another organization in which the investor firm holds less than 50 percent of the shares
supply chain management
The management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain
Distribution
The process of making a product or service available for the consumer or business user who needs it
just-in-time (JIT)
A manufacturing system in which materials or components are delivered immediately before they are required in order to minimize inventory costs
preferred supplier
A company that has an agreement with another company to supply it with goods or services
preferred supplier agreement (PSA)
An agreement entered into by a company and one of its third-party suppliers
