Organisation buying behaviour is different from individual buying behaviour. What type of buying system has been used by organisation and what system they have adopted is discussed in the presentation. The factor which considering by purchase manager while order placement has also been discussed here.

1. PRESENTATION ON
ORGANISATIONAL BUYING
BEHAVIOUR

2. MBA 3rd Semester

3.  To know the meaning of Organisational Buying
Behaviour.
 Characteristics of Organisational Buying Behaviour.
 A comparative analysis of Organisational Buying vs
Consumer Buying.
 To know the actual process of Buying System and the
factors that they take into consideration for placing an
order with reference to the Retail outlet “The Computer
Terminal” Guwahati.

4.  May be defined as
“The decision making process by which formal
organisations establish the need for purchased
products and services and identify , evaluate and
choose among alternatives brands and suppliers.”

5.  Organisational buyers buy goods and services to
reprocess a product or service and sell it to the next
buyer.
 Organisation buyers consists of following Organisation:
 Manufacturers and industrial markets.
 Wholesalers and retailers
 Government agencies.
 Non-governmental organisations.

6.  It is a rational process.
 It is done in large
quantities.
 More individuals are
involved in buying
process.
 Purchase criteria is well
defined.
 Extensive contact
between Buyers and
Sellers.

7. CHARACTERISTICS DIMENSION OF BUYING ORGANISATIONAL BUYERS
CONSUMER
Market Characteristics • Large numbers of consumer • Few numbers of
in the market organisation in the market
• Demand is driven on account • Demand is a derived
of personal needs of the demand and will involve large
individual purchases
Product or Service • Products or services are such • Products and services are
Characteristics that can satisfy individual specification based and will
demand need technical precision
• Generally brought as • The products purchased
finished goods generally raw materials/semi
finished or materials to be
used in the running of another
business.

9.  Proprietor : Mr. Upanta Das
 Established : 26th July, 2001
 Location : Goswami Service,
Guwahati
 Business Type : Computer and
Computer accessories
Retailer
 Turnover : 4 Crores Annually
(approx)

10. CENTRALISE
D BUYING
SYSTEM

11.  Centralized purchasing is a method of procurement of all
types of materials, supplies, equipment etc. through a
single department (not necessarily centrally located)
under the direct control and superintendence of one
responsible person.
 He is directly accountable to the top management for all
duties falling within the broad area of purchase function.

12. Supplier
Warehouse
Plant A Plant B Plant C Plant D

13.  Bulk buying strengthens the bargaining position of the buyer
 Advantage of the quantity discount can be tapped
 It will reduce the inventory carrying costs
 Lower transportation cost per unit
 Duplication of efforts in buying function is eliminated
 Skill development of purchase head
 No competition within units
 Easy to procure from foreign supplier

14.  Problem when specific requirement needed
 Delay in receiving the materials
 Problems to use local resources in small quantity
 Helps for autocratic management style
 Central purchasing staff may not be expert in buying various
types of items
 Loss of local control
 Creates another level of hierarchy
 Suitable more for small organization

15. BRAND OF COMPUTER AND DISTRIBUTOR’S NAME
COMPUTER ACCESSORIES
HP-HEWLETT-PACKARD Assam IT
Computer Appliances
Link info Com
SONY VAIO Datamation
APPLE Datamation
DELL Infotech
LOGITECH Neuratic
Rashi Perpetual
FRONTECH Jupiter International
HP PRINTER Jupiter Infology
Data Infotech

16. FACTORS
External Environmental 1. Economic Conditions
Factors 2. Regulatory Changes
3. Social Environment
4. Competition
Internal Environmental 1. Goal’s and Objectives
Factors 2. Policies and
Procedures
3. Technological Levels
Situational Factors 1. Time Factor
2. Current Financial
Situations
3. Availability
4. Special Offers

17. Economic Conditions
 The fluctuations in the money
markets and the interest rates have a
major impact on the buying strategies.
 The interest rates and organizational
buying have an inverse relation.
 In most cases, an increase in the
interest rates may bring about a drop
in the buying.

18. Regulatory Changes
 Any changes in the corporate
laws, rules and regulations will
also influence how, when and
what the organizations buy.
 There are also regulatory
changes that may change their
buying patterns to stay in-line
with the new regulations.

19. Social Environment
 Societies and cultures are ever
evolving, and every business
has to change its practices and
procedures to meet up with the
societal changes.
Social environment affect the
buying patterns of the
organizations buying behaviour.

20. Competition
 Today’s business is all about
beating competition and staying
ahead.
 When an organization's
competitors move on to a newer
product or service it's very likely
for the organization to change its
trends too and thus its buying
pattern will change accordingly.

21. Organisation Goals and
Objectives
 The goals and objectives of an
organization are major determinants
as to how and what the organization
will purchase.
 Company whose goal is to deliver
quality products may have a very
contrasting buying pattern, and they
will focus more on the quality issues
than on the price advantage.

22. Organisation Policies and
Procedures
 How the purchase order is routed,
depends on the organization's
policies. How does the buying
procedure begin, who will participate
and who has the ultimate authority to
decide on the purchase are all
dependent on the policies and
procedures of the organization.

23. Technological Levels
 Whenever making new purchases, organizations take into consideration
their current technology.
 Purchases are meant to replace the current technology with a newer
version, so their buying decision will be influenced by what level of
technology they currently own.
 organizations try to ensure that all new purchases being made are
technologically compatible with their existing technology.

24. Time Factor
 Sometimes, organizations don’t have all
the time to follow the detailed buying
procedure.
 If the organization needs a replacement
for equipment that broke down
suddenly, it may decide to place its
order with some existing supplier or a
supplier that is at close proximity.

25. Current Financial Situation
 If the organization having problem in
financial condition, it may decide to
place its order with one of its existing
supplier who offers extended credit.
 if the organization cannot spare out
enough money for a certain purchase, it
may opt for a readily available cheaper
version that fits into its budget.

26. Availability
 Some buying decisions can wait
while others cannot, thus if the
supplier cannot make available the
exact product by the desired date,
the organizational buyers may shift
to a new supplier or to a more
readily available alternative.

27. Special Offers
 Special offers being given
by a supplier may also be
one of the situational
factors affecting the
buying decision.

28.  Organizational buying behaviour is a very complex area.
 However, an understanding of the key factors are fundamental to
marketing strategy.
 In large industrial, commercial and retail organisations, use
“Centralized Buying system”
 The buyer in an organisation is a part of the system and he has to
operate within the parameters set forth by the organisation.
 The organizational buying behaviour gets affected by the industry
customs and traditions, and the culture that prevails in the
commercial and business circles.

29. ANY QUERIES