What is Organizational Buying Process with Example
Organizational Buying Process Refer to the process through which any Organization Goes Through in Order to make any purchase or buying decision. Just like normal people go through various stages in order to buy a particular good Industries/ Organization to goes through it.
Every Organization and Industry has to purchase various goods and services in order to keep their business running.
The complex and problem-solving process through which organization/Industries go through while making these buying decisions is known as Organizational Buying Process.
The behavior that they show during this Process is Known as Organizational Buying Behaviour
Steps In Organizational Buying Process
It is not the organization making the decision it’s their members who make the buying decision. It is a Group based activity in Industrial Buying
Let us go through Various Steps Through Which an Organization might go in order to make their Buying Decision.
Any Organization go Through these 6 Stages In order to make a buying Decision
STEP 1:- Problem/Need Recognition
Organization Buyer always Start with the problem recognition with identification of demand for a particular product in the market.
It can be a need of buying more inventory like printer, bench or to solve a particular problem like under production by buying more machine.
Unlike Consumer need Recognization is not always a complex it can be routine work. Problem Recognization is not always for solving a problem it can also be to grab an opportunity in the market.
In this organization see and identify the problem of their end customers and also their consumption pattern.
Example:- Suppose you own 10 food courts in your city and you sell burger over there and you find that more consumer is asking for sandwiches. Now you have identified the problem and a new opportunity. Now you need to find a vendor to buy and sell sandwiches. So once you recognized your need its time to go to the next step.
STEP 2:- Product Specification
This Stage Involve Clearly Understanding the problem in hand and laying down all the general characteristics of the product or service that might solve the given problem.
For any organization, it is necessary to estimate the exact quantity and the period in which Product need to be delivered.
Example:- Now as in the previous Step we identified that our customers are being shifted from burger to Sandwiches.
Now we need to estimate How much Quantity of Product say packets of sandwiches, Type of sandwiches and when do we need them.
Now we find that we need 500 packs of sandwich bread every day on a regular basis in the morning at 8:00 Am. Now its time to move to our Next Step.
STEP 3:- Product and vendor Search
Its time to find the required product and the list of all the vendors available. Now as you know the product specification now organizational buyer will try to find various suppliers that can solve the problem and also qualify to be suitable suppliers.
Organizations need to collect a lot of information from various resources such as Company Files, Current supplier detail, Records, directories, Connections, Websites, Word of mouth in order to get a list of suppliers.
Example:- Now we know which type of bread do we need and how much we need and when do we need.
In this step, we will look at the ous option of Product and their vendors, wholesaler, distributor, available in our area in order to make a list of them
Now we had used our contacts searched web and made a list of all product and suppliers that are available in our city.
STEP 4:- Product and Vendor Evaluation
In this step as we searched and made a list of all the available vendors and alternatives available to us its time to evaluate all those alternatives.
In this step, we will be evaluating all the available products and their vendors in order to select the most appropriate among them.
We will evaluate all the vendor available to us on various parameter and basis such as:-
- Product quality
- credit availability
- value Analysis
- cost analysis
- Capability of Supplier
- Reputation of Supplier
- After-sale Service
The supplier will also be evaluated on the basis whether or not they can supply the requires quantity of products and their after-sale service
Example:- Now we have got the list of all the suppliers available to us Its time to evaluate them and their products as well
Let’s suppose They have two types of bread for making sandwiches and there are 20 suppliers in your area who can supply you the required products
First, you need to decide the product in our case its bread that which type of bread you want to use.
Once you are done with bread Its Time to evaluate all the supplier based on their bread quality, price and whether they will be able to supply the required quantity on time or not.
Once you evaluated all the supplies its time to move to the step.
STEP 5:- Outlet Selection and Purchase
In the last step, we had evaluated all the suppliers and Products available to us.
This step involves the selection of the final product and the supplier based on the information gathered during the Evaluation Process.
In this step, we will finally select our vendor.
Example:- In the last step as we had evaluated all the supplier and product available to us. Now its time to finally choose one who fits our need and makes the final purchase or we can say palace our order for loaves of bread.
STEP 6:- Post Purchase Evaluation
Finally, we are at our last step of organization buying Process
This step involves the evaluation of the performance of the supplier by the organization.
The major part of the post-purchase evaluation is the service of the supplier, quality of the product delivered, delivery on time, customer response, After-sale service by the supplier, etc.
The motive of the step is to minimize the dissatisfaction and to encourage customers to tell us our mistakes to make improvements.
Example;- In the last step we had placed the order for the bread. In this step, we will evaluate our decision of making a purchase.
Its time to evaluate how supplier responds to our quarries, quality of bread delivered, time of delivery, Behaviour of supplier and whether your organization is satisfied with the purchase does purchase fulfill the organization objective or not.
Organization Behaviour is a Behaviour That a organization show during the decision making and buying process is known as Organizational Behaviour
Organizational buying Process is a process through which an organizatin Goes in order to purchase a particular Product or service.
There are six Steps involved in the Organizational Buying process.
1. Need/ Problem recognization
3. Product and Vendor search
4. Product and Vendor Evaluation
5. Outlet selection and purchase
6.Post Purchase Evaluation