Organizational

Buying Process
 à

 

 ay not be tangible

 Value is PERCEIVED by the buyer
 Can enhance value by:
 Packaging
 Support services
 Reliability Value Chain
 Warranties
 Training
 !  

 
 ˜sually formal contracts
 Extensive search for suppliers
 Negotiation
 Long buying process
 ultiple suppliers
 Long-term, loyal relationships
 !  

 
 Individual behavior contributes to the mission.

 Effects of Bad purchasing decisions

 Interruptions in production/operations
 Reduction in product quality
 Slowdown in distribution
 Dissatisfied customers
 Wasted resources
 Higher costs/lower sales and cash flow/lower profit
 |  
 4ewer
 Concentrated

 Need long-term relationships because they are

not easy to replace
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 Products and services, and their applications

can be complex.
 New technology
 Interface with existing technology
 High standards (e.g. clean rooms, surgical
suites)

 

 
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 So much is open to negotiation

 Product, price, terms, discounts, warranties,
delivery, training, service, returns, etc.
 Liability, nonperformance
 POWER
 $ize of deal, characteristics of parties, the
deal, # of parties involved, complexity of
products
  
 
j 

 Negotiating not just with purchasing agent, but

multiple parties from multiple functional areas
in the organization
 The more people involved, the more
complicated it gets
 Technical and commercial complexity can
exacerbate the behavioral complexity
 à  

 ÿey decision maker(s)

 Important Product/Vendor attributes
 Access to key decision makers
 Customer purchasing policies and procedures
|      

  
 
   
Buyer ± responsible for dealing with suppliers
and placing orders (e.g., purchasing agent)

Decider ± has the power to make the final

purchase decision (e.g., CEO)

Influencer ± has the ability to affect what is

ordered such as setting order specifications
(e.g., engineers, researchers, product
managers)
|      

  
 
   
˜ser ± those who will actually use the product
when it is received (e.g., office staff)

Initiator ± any Buying Center member who is

the first to determine that a need exists

Gatekeeper ± anyone who controls access to

other Buying Center members (e.g.,
administrative assistant)
    !"
# $ 
 Purchasing for business, not self
 Purchaser being judged on performance
 4ormal structure and procedures
 # bidders
 Evaluation criteria
 ultiple signatories
   !"
# $ 
 Emotional and Social 4actors
 4riendship
 Like/Dislike vendor/rep
 Personal/Professional 4avors
 Influence of others in organization (+/-)
 Personal/Departmental Needs & Objectives
may not match those of the organization.
 Conflict
 |
 
 Need recognition (ay not be decider)
 Solution characteristics/quantity (Specs)
 Describe solution in detail (ake/Buy)
 4ind qualified sources (product +)
 Receive/analyze proposals (price +)
 Evaluate proposals[Select supplier
 Establish order routine
 4eedback/Evaluate (4OLLOW˜P)
 | !

 Newness and past experience with product
 Amount/Type of information needed by
influencers/deciders
 Number of alternatives

 Common buying situations (buyclasses)

 Straight rebuy
 odified rebuy
 New task purchase
Case: ÿ
 
  
    is the decision facilitation
model that gets added to sales to help buyers address
the behind-the-scenes, private considerations
necessary to get buy-in to make a purchase

As a decision support tool rather than a problem-

solving/product placement method, it is used from the first
call through the entire sales cycle, for any size product, in any
industry, for B2B sales as well as retail. ˜sed throughout the
entire path of the buyer's decision process.
   

 . Develop marketing materials to professionally represent your
solution either on-line or in person.

2. ake an appointment to get in front of the prospect

3. Help the prospect choose the members of the Buying Center

Î. 4acilitate prospect¶s discovery of what sorts of strategic issues
they must manage to get folks on board with potential change.

5. Lead prospects/buyers through tactical issues they must

manage before they can choose a solution.

6. 4ollow up to see if there is anything you can do to help the

prospect/buyer decide to purchase.

7. Lead prospects/buyers through the systems issues they must

consider in order to determine how any proposed change will
disrupt their status quo.
*. Discuss/present your solution and show the prospect/buyer
how it would fit with their need/problem.

9. Discuss how your solution fits with the internal issues that
they must manage.

  . anage objections and differentiate yourself from the

competition.
j :

oIncrease closing ratio, even in a down economy

oSupport the portion of the buying journey that's

beyond the scope of technology

oDifferentiate you from the competition and

eliminates the need for price wars and objections

oEnables the relationship/political and private issues

buyers must handle in their buying decision process

oCreate a trusting, collaborative communication that

forms the basis of a long term relationship
à        
 
ÿPG (Tax inimization Team)
organ Stanley (Retail Brokers)
Wachovia Bank (Small Business Bankers)
IB (Software Sales, Account anagement)
HP (eeting anagement)
BOSE (Customer Care)
Bose (Customer Service)