Industrial Marketing

Demand Issues : Chapter 4

The vendors are also regularly monitored for their performance. A firm purchases goods under three situations. In a new task, the firm buys a totally new product or an existing product for the first time. This involves extensive information and supplier search. The second situation is straight re-buy. Here the firm purchases the same material from the same supplier without any alterations in the contract.

And the last situation is modified re-buy. It involves modifications in the form of change in supplier, change in terms of the contract, etc. A buying center involves people from across the departments of the firm to make the buying decisions for the firm. The buying center is influenced by the individual and group factors. Hence the decisions taken by the buying center will bear these influences.

Value analysis is used in the firm to assess the value of the product to be purchased and consequently to take 'make or buy' decisions. It helps the firm to reduce unnecessary costs in the purchase of the product or materials. Vendor evaluation helps in choosing the right vendor. Vendor rating is performed to appraise vendors from time to time with respect to the products supplied and services rendered; it is done on the parameters of price, quality, delivery, and service.

There are different factors that influence organizational buying behavior such as environmental factors, organizational factors, group factors, and individual factors. The different models of organizational buying behavior discuss these factors with differing levels of attention being given to each. They include the Sheth model, Webster and Wind model, and the Anderson and Chambers Reward/Measurement Model.

Chapter 4 : Overview