G E N

R M N
B I S
P D T
S V C
 Business,
Government,
and Institutional
Buying
By: Group 1:
Abante, Marrian C.
Abril, Austine Luke
Alcantara, Maryanne Janette
Huertas, Vin
Tubid, Ciara Consuelo
 Topics

1 Categories of 4 Structural Influences on

Organizational Buyers Organizational Buying

2 The Organizational 5 Behavioral Influences on

Buying Process Organizational Buying

3 Purchase-Type Influences 6 Stages in the Organizational

on Organizational Buying Buying Process
Categories of Organizational Buyers

Government
Producers
Agencies

Organizational
Buyers

Intermediaries Other
Institution
Categories of Organizational Buyers
Products
• This consists of businesses that buy
goods and services in order to produce
other goods and services for sale.
• Production are engaged in many
different industries ranging from
agriculture to manufacturing, from
construction to finance.
Intermediaries
• Purchase products to resell at a
profit.
• It includes types of reseller such as
wholesaler and retailers that buy
products from manufacturers and
distribute them to consumers and
other organizational buyers.

• Producers constitute the largest • Also purchase products and

segment of organizational buyers. services to run their own business
such as office supplies and
maintenance supplies
Categories of Organizational Buyers
Government Agencies
• Government agencies purchase
machinery, equipment, facilities,
supplies and services.
• Government agencies account for
trillion of dollars’ worth buying and over
half of this amount represents
purchases by the federal government,
making it he world’s biggest customer.
• Marketing to government agencies can
be complex since hey often have strict
purchasing policies and regulations.
Other Institution
• Marketers also sell their products
and services to a variety of other
institutions, such as hospitals,
museums, universities, nursing
homes and churches.
• Many of these are non-profit
organizations that purchase
products and services to maintain
their operations and serve their
client.
The Organizational Buying Process
A Model of the Organizational Buying Process

Purchase-type
Structural Influences Behavioral Influences
influences

Organizational Buying Process

Postpur-
Organiza- Vendor Purchase
chase
tional Need analysis Activities
evaluaion
Purchase-Type Influences on
Organizational Buying
1. STRAIGHT REBUY

• The simplest and the most common type of purchase

• It involve routinely reordering a product from the same supplier that it
had been purchased from in the past
• Organizations use computer systems that automatically reorder certain
commonly used products.
• It is common among organizations that focus just-in-time inventory
Just- in time inventory- a system of replenishing parts or goods for resale
just before they are needed

• It favors suppliers with a strong commitment to quality.

Purchase-Type Influences on
Organizational Buying

2. MODIFIED REBUY

• It involves considering a limited number of alternatives before

making a selection
• The organizational buyers consider the new information and
decides what changes o make
• Marketers seek to win new organizational customers by giving
them reasons to change from a straight rebuy to a modified rebuy
in which the marketer’s product are considered.
Purchase-Type Influences on
Organizational Buying

3. NEW TASK PURCHASE

• It involves an extensive search for information and a formal

decision process.
• It is time consuming and involves a relatively large number of
decision makers, who may consider many alternatives.
• Most likely to involve joint decision making because many kinds
of expertise are required to make the best decision
• An opportunity for marketer to learn abut the needs of the
organizations in is target market
Structural Influences on
Organizational Buying

Structural Influences- refers to the design of the organizational

environment and how it affects the purchasing process.

1. Purchasing Roles
2. Organization-specific factors
3. Purchasing Policies and Procedures
 Structural Influences on
Organizational Buying
1. PURCHASING ROLE
Initiators Who start the purchasing process by recognizing a need or problem
in the organization
Users Who are people in the organization who actually use the product

Influencers Who affect the buying decision, usually by helping define the
specifications for what is needed
Buyers Who have the formal authority and responsibility to select the supplier
and negotiate the terms of contract
Deciders Who have the formal or informal power to select or approve the supplier
that receives the contract
Gatekeepers Who control the flow of information in the buying center
 Structural Influences on
Organizational Buying
1. ORGANIZATION-SPECIFIC FACTORS
Orientation Dominant function in an organization may control purchasing
decisions

Size of Large Organization have a high degree of joint decision making

Organization Small Organization have more autonomous decision making

Degree of Highly centralized are less likely to have joint decision making
centralization Privately owned, small company with technology or production
orientation tend toward autonomous decision making
Large- scale public corporation with reasonable decentralization tend
to have greater joint decision making
 Structural Influences on
Organizational Buying
3. PURCHASING POLICIES AND PROCEDURES

• Develops a number of policies and procedures for various types of

purchases
• Ensure that the appropriate products and services are purchased
efficiently and that responsibility for buying is assigned appropriately
• Sole sourcing is advantageous for organizational buyers because it
not only increases timely delivery and quality of supplies but also
allows buyer to work more closely with suppliers to develop superior
products that meet their needs and those of their customers

Sole Sourcing- which all of a particular type of product is purchased from a

single supplier
 Behavioral Influences on
Organizational Buying
Personal Motivations
• Influenced by friendship,
professional pride, fear and
uncertainty, trust and personal
ambitions in their buying activities
• Initiate or influence the purchase
of goods that will demonstrate a
buyer’s value to the organization
• It varies with the nature of the
product, the climate within the
organization and the relative
strength of the two forces
Role Perception
• Manner in which individuals behave
depends on their perception of their
role, their commitment to what they
believe is expected of their role, the
maturity of the role type and the
extent to which the institution is
committed to the role type
• Roles may be heavily influenced by
the organizational climate existing
in the particular organization
 Behavioral Influences on
Organizational Buying
Organizations’ group based on differences in degree of employee commitment

1. INNOVATIVE FIRM
individuals approach their occupational roles with a weak commitment to
expected norms of behavior

2. ADAPTIVE ORGANIZATION
there is a moderate commitment

3. LETHARGIC ORGANIZATION
individuals express a strong commitment to traditionally accepted behavior
and behave accordingly
Stages in the Organizational Buying
Process

Organizational Need

Vendor Analysis

Purchase Activities

Postpurchase Activities
Stages in the Organizational Buying
Process
Organizational Model Vendor Analysis

• Organizations have many needs • Organizational buyers must search

for products and services to help for, locate and evaluate vendors of
them survive and meet their products and services to meet their
objectives needs.
• Recognizing these needs, and a
willingness and ability to meet Vendor Analysis- process by which
them, often results to organizational buyers rate each potential
organizational purchase supplier on various performance
measures such as product quality, on-time
delivery, price, payment terms and use of
modern technology.
Stages in the Organizational Buying
Process
Purchase Activities
• The complexity of the product or
service, the number of suppliers
available, the importance of the
product to the buying
organization, and pricing all
influence he number of purchase
activities to be performed and
their difficulty.
Postpurchase Evaluation
• Organizational buyers must
evaluate both the vendors and the
products they purchase to
determine whether he products are
acceptable for future purchases or
whether other sources of supply
should be found
• Considered both prior to purchasing
from a particular supplier and after
purchasing to ensure that every
area’s needs are being met as well
as possible