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Unit 2
Managing Relationships
  

  


  

ihe Organisational
Buying Process
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Phase 1 Recognition of a
Problem or Need

Phase 2 Definition of the

product- type needed
which means
determination of the
characteristics and
quantity of needed
product
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Phase 3 Development of
detailed specifications
with the help of
technical manager,
suppliers or consultants
Phase 4 Search for qualified
suppliers
ihe quality of product,
reliability in delivery and
service are the principal
factors considered
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Phase 5 Acquisition and
analysis of
proposals ʹ ihe quotation
includes

a) product specifications
b) price
c) delivery period
d) payment terms
e) taxes and duties applicable
f) freight or transportation
cost
g) cost of transit insurance
h) validity of the quotation
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Phase 6 Evaluation of
proposals and
selection of a
supplier
ihe selected suppliers
are invited for
negotiations on technical
aspects, price, payment
terms and delivery, etc.
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Phase 7 Selection of an order procedure
ihe purchase order details are then
worked out to include
a) quantity to be purchased
b) frequency of placement of
order
c) delivery schedule
d) levels of inventory needed
e) follow up schedule
f) inspection details
g) payment terms
h) after-sales service, etc

Phase 8 Evaluation of product performance

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ihere are three common types of

buying situations, called buyclasses:

i) New task
ii) Modified rebuy
iii) Straight rebuy
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New iask h un this situation, the company
is buying the product for the first time.
ihe buyer has limited knowledge and lack of experience.
£ the risk is higher
£ decision may take unusually long
£ more people get involved in decision
making
£ the concern is to find a solution
instead of the lowest price
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Sales strategy in new task
ihe business marketing firm makes all
efforts to get involved in the first three
phases of buying process.

Phase 1 Recognition of a Problem or

Need

Phase 2 Definition of the product-type

needed

Phase 3 Development of detailed

specifications
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Modified Rebuy
A modified rebuy situation
occurs when the organisation is
not satisfied with the
performance of the existing
suppliers.
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Sales strategy in modified
rebuy
Any information about the falling
out of the supplier firm should be
alerted to the management so that
the corrective measures could be
taken on the front of quality or any
performance guarantees.
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Straight Rebuy
ihis situation occurs when the buying
organisation requires certain products or
services continuously and when such
products and services have been
purchased in the past.

ihis is a routine decision with low risk and

less information.
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Sales strategy in straight rebuy

ihe sales strategy should be to

maintain the product and
service quality, good buyer-
seller relationship and be
responsive to the changing
needs of the customer
organisation.