Professional Documents
Culture Documents
Chapter 3
Chapter 3
Chapter 3
Chapter Questions
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1. What are the purchasing objectives of business buyers?
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Buying right items in right quantity, at right time and right place to process/distribute.
– Perfect delivery / ready availability
– Superior quality of product / service
• Specifications
• Cost of inspection
• Consistent production
– Lowest price
– Services
• Prompt and accurate info. from suppliers
• Technical assistance
• Spare-parts availability
• Repair and maintenance
• Training Cont…
3
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• Good long-term supplier relationship
• Firms spend 50%+ of sales on purchases
• Personal objectives
– Higher status
– Job security
– Salary increments
– Promotions
– Social considerations
4
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5
Organisational Buying Process
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• Different from consumer market
• Industrial services:
– Difficult to write specifications
– Difficult forecast demand
– Difficult to plan
cont6
Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
Eight phases/buyphases
developed by Robinson, Faris, & Wind:
1. Problem / Need recognition
• Faster production
• Breakdown
2. Decide characteristics and quantity of needed product
• R&D dept.
• Purchase dept.
3. Develop specifications / description of needed
product
• inter-functional
• Suppliers are involved
4. Search for potential suppliers
7
cont
5. Obtain & analyse supplier proposals
•
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Product specifications
• Price
• Delivery
• Payment
• Transportation
• Terms and conditions
6. Evaluate and select suppliers
• Vendor Analysis System (next slide)
• Balanced Scorecards
• Internal business process
7. Select an order routine
• Order quantity
• Order frequency
8. Performance feedback & post-purchase evaluation
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Table 3.1
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Supplier/Vendor Analysis
using Multi attribute model
Attributes Weight Supplier Total
(or Criteria) (or Importance) Performance Rating Score
Product Quality 3 8 24
Service Quality 3 7 21
Price 2 6 12
Reputation 1 8 08
Flexibility 1 6 06
Total 10 71
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Buyclasses
(situations)
Buyphases
(processes) New Modified Straight
Task Rebuy Rebuy
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Buying Centre Members and
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Key Influentials
• Buying centre, or purchase committee, consists of members
who make buying decisions, share common objectives and
risks
Organisationa
Roles in
l Buying
Deciders
Users
Gatekeepers
Models
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of Organisational Buying Behaviour
• Most important factors influencing organisational
buyers:
– Organisational / Task – oriented
– Personal / non-task oriented
– Enviromental
– Buying Centre
Individual variables
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The Choffray and Lilien Model
Negotiation
Organisational preferences
3. Worldsourcing
4. Value analysis / Value engineering