Buying Centre

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<p>BUYING CENTRE CONCEPT</p> <p>E.ANAND, LECTURER, BIET-MBA, DAVANGERE</p> <p>BUYING CENTRE ROLESBuying centre consists of people in the organization who are involved either consciously or unconsciously in the buying process. Roles of Buying Centre Initiator User Decider Inuencer Buyer Gatekeeper</p> <p>INITIATOR - Initiator is a person who recognizes that the company has a problem or requirement. Internal or External. External initiator is the salesperson or the selling company. Internal initiator can be many like users. USERS - The users inside the company mostly initiate the buying process and will act, mostly, as DECIDERS DECIDERS - These people exert pressure in deciding a specic supplier INFLUENCER - These are people who are affected by purchaser in their own way and accordingly inuence a particular supplier</p> <p>BUYER - These are usually purchasing people. These are the people whose formal task is to select a supplier and arrange the terms of a deal GATEKEEPER - These are the people who have control over the information regarding purchase. Usually Purchasing Manager is the rst point of contact for a any business salesperson. All the information has to be given to this person and thus he is the Gatekeeper. CREEPING COMMITMENT - Situation where decision making process involves a sequence of incremental choices, each of which eliminates certain alternative solutions (or vendors) for further consideration</p> <p>Sewing m/c purchase INFLUENCER</p> <p>Requirement Price Speed &amp; Technology Output/day Ease of Maintenance Set-up time Ease of Operation</p> <p>Top Mgmt</p> <p>Tailor</p> <p>Supervisor</p> <p>Maintenance Mgr</p> <p>Buyer </p> <p>FLOWCHART FOR BUYCLASSES</p> <p>BUYING CENTRE INTERACTION PATTERNS</p> <p>VERTICAL INVOLVEMENT - No. of levels in hierarchy involved LATERAL INVOLVEMENT - No. of departments involved EXTENSIVITY - No. of people in buying centre CONNECTEDNESS - Communication amongst buying centre members</p> <p>BUYING CENTRE INTERACTION PATTERNS</p> <p>VERTICAL INVOLVEMENT - No. of levels in hierarchy involved LATERAL INVOLVEMENT - No. of departments involved EXTENSIVITY - No. of people in buying centre CONNECTEDNESS - Communication amongst buying centre members</p> <p>FACTORS AFFECTING BUYING DECISIONS</p> <p>Environmental Factors Organizational Factors Buying Centre Factors Individual Factors</p> <p>Physical, Economic, Technological, Legal, Political, Cultural Technology, Goals &amp; Tasks, Actors, Structure Roles, Resources Status, Politics and ethics</p> <p>ENVIRONMENTAL FACTORSPHYSICAL ENVIRONMENT - Geographical spread of rms suppliers and customers will affect the buying behavior ECONOMIC ENVIRONMENT - It is the general situation of economy - growth or recession?, interest rates, tax cuts... TECHNOLOGICAL ENVIRONMENT - It is the current technological advancements happening in particular industry and also the rate of technological change LEGAL &amp; POLITICAL ENVIRONMENT - The way in which government regulations affect certain purchasing activities CULTURAL ENVIRONMENT - The way in which cultural differences affect buying decision</p> <p>ORGANIZATIONAL FACTORSTECHNOLOGY - The buying depends on whether the supplier has the capability to produce the product/service as per their needs. Make To Print - Blueprint will be given to supplier and supplier just has to manufacture. Whether to make or buy will depend on the companies willingness to share the information with supplier as well as the cost attached to it. GOALS &amp; TASKS - Frequently changing suppliers ie.short term commitment (American style) or long term commitment with suppliers (Japanese style) ACTORS - How motivated are employees of buying company towards particular purchase activity or towards fullling the organizational goals.</p> <p>ORGANIZATIONAL FACTORS</p> <p>ACTORS - How motivated are employees of buying company towards particular purchase activity or towards fullling the organizational goals. STRUCTURE - Whether purchasing is decentralized or centralized activity? Salesman has to plan his visits accordingly.</p> <p>INDIVIDUAL FACTORSBUYERS STATUS - Where is purchasing officer or buyer placed in hierarchy of the organization?. Buyers are just like consumers because they know less technically about a purchase of certain technological product and in that way sometimes it becomes benecial to the org. and the buyer. ORGANIZATIONAL POLITICS - In exerting their inuence. Bend the rules to show their power or to return a favor. Salemen can take advantage of some of these situations. ETHICS - The individual motivations of buyer sometimes/many times affect a particular purchase. also</p> <p>PSYCHOLOGICAL FACTORS INFLUENCING INDIVIDUAL DECISION MAKINGDIFFERENCES IN ROLE ORIENTATION - Whether the purchase is inuenced by Buyer or the Design Engineer DIFFERENCES IN INFORMATION EXPOSURE - Buyer is denitely exposed to vast knowledge about some purchase than an engineer who is biased due to cognition process of SELECTIVE DISTORTION AND RETENTION. PERCEIVED RISK IN VENDOR SELECTION PROCESS -</p> <p> NEED UNCERTAINTY MARKET UNCERTAINTY TRANSACTION UNCERTAINTY</p> <p>PURCHASINGS INFLUENCE ON BUYER BEHAVIOR</p> <p>60% of total spend is on purchasing materials, capital assets or services MRP or SAP JIT Buyer Technology Centralized Purchasing</p> <p>CONFLICT RESOLUTIONCompeting Collaborating</p> <p>Partys attempt to satisfy own concern</p> <p>Compromising</p> <p>Avoiding</p> <p>Partys attempt to satisfy others concern</p> <p>Accommodating</p> <p>POWER IN CONFLICT RESOLUTIONReward Power - Do this and you will get this (usually monetary) Coercive Power - Usually physical threats or sanctions or punishment or strikes etc.. Legitimate Power - This they get due to their position or authority Referent Power - This is the power of being treated like celebrity Expert Power - This is power due to ones skill or knowledge</p>