BUYING CENTRE

CONCEPT

E.ANAND, LECTURER, BIET-MBA, DAVANGERE

BUYING CENTRE ROLES
Buying 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
Influencer
Buyer
Gatekeeper
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

specific supplier

INFLUENCER - These are people who are affected by

purchaser in their own way and accordingly influence
a particular supplier
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 first 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”
 Sewing m/c purchase
INFLUENCER
Top Maintenance
Requirement Tailor Supervisor Mgr Buyer
Mgmt
Price ✔ ✔
Speed & ✔ ✔ ✔
Technology
Output/day ✔ ✔ ✔
Ease of ✔ ✔
Maintenance
Set-up time ✔ ✔
Ease of ✔ ✔ ✔
Operation
FLOWCHART FOR BUYCLASSES
BUYING CENTRE INTERACTION PATTERNS

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
BUYING CENTRE INTERACTION PATTERNS

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
FACTORS AFFECTING BUYING DECISIONS

Environmental Physical, Economic, Technological,

Factors Legal, Political, Cultural

Organizational Technology, Goals & Tasks, Actors,

Factors Structure

Buying Centre
Roles, Resources
Factors

Individual Factors Status, Politics and ethics

ENVIRONMENTAL FACTORS
PHYSICAL ENVIRONMENT - Geographical spread of firm’s
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 & POLITICAL ENVIRONMENT - The way in which

government regulations affect certain purchasing activities

CULTURAL ENVIRONMENT - The way in which cultural

differences affect buying decision
ORGANIZATIONAL FACTORS
TECHNOLOGY - 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 & 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 fulfilling the
organizational goals.
ORGANIZATIONAL FACTORS

ACTORS - How motivated are employees of buying company

towards particular purchase activity or towards fulfilling the
organizational goals.

STRUCTURE - Whether purchasing is decentralized or

centralized activity? Salesman has to plan his visits
accordingly.
INDIVIDUAL FACTORS

BUYER’S 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 beneficial to the org. and the buyer.

ORGANIZATIONAL POLITICS - In exerting their influence.

“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 also

sometimes/many times affect a particular purchase.
PSYCHOLOGICAL FACTORS INFLUENCING
INDIVIDUAL DECISION MAKING
DIFFERENCES IN ROLE ORIENTATION - Whether the purchase
is influenced by Buyer or the Design Engineer

DIFFERENCES IN INFORMATION EXPOSURE - Buyer is definitely

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 -

• NEED UNCERTAINTY
• MARKET UNCERTAINTY
• TRANSACTION UNCERTAINTY
PURCHASING’S INFLUENCE ON BUYER BEHAVIOR

60% of total spend is on purchasing materials, capital assets

or services

MRP or SAP

JIT

Buyer Technology

Centralized Purchasing
 CONFLICT RESOLUTION
Competing Collaborating
Party’s attempt to satisfy
own concern

Compromising

Avoiding Party’s attempt to satisfy Accommodating

other’s concern
POWER IN CONFLICT RESOLUTION

Reward 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 one’s skill or knowledge