Module 3: Organizational Buying Process

Question 1

decision-making unit (DMU)

Answer 1

A group of people within an organization who make business purchasing decisions

Question 2

buying center

Answer 2

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

Question 3

selling centers

Answer 3

Functional representation that supports a sales person to create a team-selling approach

Question 4

economic buyer

Answer 4

The individual decision maker or group within the customer organization who controls the budget and writes the checks for new product purchases

Question 5

infrastructure buyer

Answer 5

Someone who makes sure that purchasing rules defined in corporate governance procedures are followed

Question 6

user buyer

Answer 6

Someone who influences the buying decision as the person who will actually use the solution after the purchase decision is made

Question 7

purchasing managers

Answer 7

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

Question 8

procurement officers

Answer 8

Persons who are responsible for the management, administration, and supervision of the company’s acquisition programs

Question 9

merchandisers

Answer 9

A staff member in a retail firm who is responsible for buying goods or products and displaying them in the store

Question 10

stakeholders

Answer 10

A person, a group, or an organization who can affect or be affected by the organization’s actions, objectives, and policies

Question 11

Initiators

Answer 11

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.

Question 12

Users

Answer 12

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.

Question 13

Influencers

Answer 13

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.

Question 14

Gatekeepers

Answer 14

Individuals who will decide if and when one gets access to members of the buying center

Question 15

Decision Makers

Answer 15

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.

Question 16

Buyers

Answer 16

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.

Question 17

Stages of B2B Buying Process

Answer 17

1- Recognize the need
2- Define the Need
3- Search for suppliers
4- Bid analysis
5- Supplier Selection
6- Order Placement
7- Performance Review

Question 18

single-sourced supplier

Answer 18

The use of a one supplier to provide 100 percent of a firm’s products and services even when alternative suppliers are available

Question 19

request for proposals (RFP)

Answer 19

An invitation to submit a bid to supply a good or service

Question 20

Producers

Answer 20

A company that purchases parts, products, or ingredients to produce other goods and services to sell to other companies or consumers

Question 21

Resellers

Answer 21

A company that buys finished goods to sell, lease, or rent to other companies or consumers

Question 22

value-added resellers (VARs)

Answer 22

A reseller that adds features or service to an existing product and sells it

Question 23

Organizations

Answer 23

A government agency or nonprofit group that purchases products or services to serve or sell to its constituents

Question 24

Business-to-government (B2G) markets

Answer 24

When companies sell to local, state, and federal governments

Question 25

prime contractors

Answer 25

Those that hold a government vetted contract directly

Question 26

subcontractors

Answer 26

Sellers that do business with another company that holds the direct contract with the government

Question 27

straight rebuy

Answer 27

The duplicate purchase of the identical goods in the identical amount under the identical terms from the identical supplier

Question 28

new task purchase

Answer 28

A business buying situation in which the buyer purchases a product or service for the first time

Question 29

modified rebuy

Answer 29

A buying situation in which an individual or organization buys goods that have been purchased previously but changes other element of the previous order

Question 30

Functional relationships

Answer 30

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

Question 31

Affiliative selling relationships

Answer 31

A situation where the buyer needs extensive expertise from the seller to make a decision

Question 32

Strategic partnerships

Answer 32

A partnership in which the buyer and seller commit resources to generate growth for both parties

Question 33

Alliance agreements

Answer 33

A formal agreement among companies who want to share resources to create a competitive advantage

Question 34

Joint R&D agreements

Answer 34

Businesses join to develop a specific product or service

Question 35

Co-marketing agreements

Answer 35

An agreement where companies share resources to market their products together

Question 36

Minority investments

Answer 36

An investment by one organization in another organization in which the investor firm holds less than 50 percent of the shares

Question 37

supply chain management

Answer 37

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

Question 38

Distribution

Answer 38

The process of making a product or service available for the consumer or business user who needs it

Question 39

just-in-time (JIT)

Answer 39

A manufacturing system in which materials or components are delivered immediately before they are required in order to minimize inventory costs

Question 40

preferred supplier

Answer 40

A company that has an agreement with another company to supply it with goods or services

Question 41

preferred supplier agreement (PSA)

Answer 41

An agreement entered into by a company and one of its third-party suppliers