BUYING BEHAVIOR

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Objective For Purchase :
 Buying Right items
 With right qty
 At right price
 Right time
 and At Right place.
1. Delivery/Availability :
Main objective is purchased
goods should be available when
and wherever it’s needed.
This is effective and important
criteria to evaluate Vendor
2. Product Quality :
Procured material should follow specifications
given.
IS, BS, BIS, ISO etc standards
If quality fails…
What r impacts ??????
1. Interruption
2. New Vendor
3. Rejection
4. Cost increases
5. Loss of Time leads to Fine, Penalty etc
3. Lowest Price :
Low price works unless and until
Availability and quality criteria should
be fulfilled.
4. Services :
It include Repair, Maintenance,
Training, Spare Parts Availability etc…
5. Supplier Relationship :
In Industrial marketing 50% of sales revenue spend on
Purchase.
Personal Objective :
Higher Status
Security
Promotions and Social Consideration

Organizational Purchase Objective :

Purchase Decision Process
Payment Process
 INDUSTRIAL BUYING DECISION
PROCESS :

1. Recognition Of Problem [Need] :

When quality of material supplied
is not satisfactory ?????
Shortage of Material ???
Regular problem of m/c ????
Ex….Material Handling in
Company
2. Determination of Characteristics
and Qty of Needed Product :
When quality of material supplied
is not satisfactory ?????
Shortage of Material ???
Regular problem of m/c ????
Ex….Material Handling in
Company
3. Development of Specification of
Needed Product :
It’s similar to stage 2, but mostly
industrial company involves
consultant, supplier in this process.
4. Search for Potential Supplier :
Get information for available supplier
Decide and evaluate qualified supplier
evaluation done on basis of Journals,
Sales call, Word of Mouth, Catalogues
etc….
5. Obtaining & Analyzing Supplier:
Supplier gives proposals in form of
Quotation, Offer, bid etc..
Also includes product specification,
price, delivery period, payment terms,
taxes etc..
most of time stage 4 and 5 done
simultaneously.
 6.Evaluation of Proposals/Suppliers

SUPPLIER A
Features Weight Supplier Supplier
    Performance Rating
Quality 30 0.8 24
Delivery 25 0.4 10
Price 15 0.6 9
Service 20 0.6 12
Flexibility 10 0.2 2
Total 100   57
7. Selection of Order Routine:
It’s a Exchange process
P.O. Generated
Selected Supplier, Quantity,
Frequency of supplier, etc..
8. Performance feedback & Post
purchase evaluation :
Feed back from user dept.
If feed back is –ve. Then ???
New/Change Supplier
 KEY MEMBER OF DECISION
MAKING PROCESS

1. TOP MANAGEMENT PERSONS

2. TECHNICAL PERSONS
3. BUYERS/PURCHASERS
4. FINANCE PERSONS
5. MARKETING PERSONS
 BUYING BEHAVIOR MODELS:

1. WEBSTER AND WIND MODEL

2. SHETH MODEL
Environmental Variable
Physical ,Technological
Economic ,Political and Legal
Labor Unions ,Cultural

Organizational Variable
Objective
Structure
Purchasing Policies and procedure
Evaluation and reward
Organizational Buying Decision
Buying Centre Variable Choice of Supplier
Authority, Size, Key Influencers Delay decision for more information
Interpersonal relationship Buy / Do not buy

Individual Variable
Education, Experience
Values , Lifestyle , Income

WEBSTER AND WIND MODEL

 SHETH MODEL OF IND. BUYING BEHAVIOR

Comp I Comp II Comp III

Background of 1. Product Spe. Problem Solving
Individual SUPPLIER
Time Pressure
Information OR
Type of Purch. Persuasion
source
BRAND
Perceived Risk
Satisfaction
CHOICE
with past Bargaining
purchase
2. Comp. Spe
Comp. Size Politicking
Orientation
Deg. Of
Centralization
Case study :