Organizational Buying Process Quiz

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Questions and Answers

What is the initial step in the organizational buying process?

Problem Recognition (correct)

Product Specifications

General Description of Need

Acquisition

Which of the following factors does NOT impact organizational buying decisions?

Inside forces

Personal preferences of employees (correct)

Market trends

Outside forces

What is a crucial aspect for market-driven firms in understanding organizational buying?

Sensing market trends (correct)

Developing generic marketing strategies

Identifying individual consumer preferences

Eliminating vendor relationships

What are 'Critical Decision Points' in the buying process?

Key moments where significant decisions are made (B) Signup and view all the answers

How does knowledge of organizational buying behavior aid marketers?

It helps in decision making for product design, pricing, and promotion. (B) Signup and view all the answers

Which stage follows 'Problem Recognition' in the organizational buying process?

General Description of Need (B) Signup and view all the answers

Why is it important for firms to work closely with their customers and vendors?

To locate buying influences within profitable segments. (B) Signup and view all the answers

What typically marks the end of the organizational buying process?

Acquisition (D) Signup and view all the answers

What is the first step in the buying process?

Problem recognition (D) Signup and view all the answers

Which factor can most often precipitate the need for a new product?

Salesperson influence (C) Signup and view all the answers

What does the 'general description of need' typically involve?

Understanding the extent of the problem (A) Signup and view all the answers

Which type of buy requires a buyer to consider whether it is new, straight, or modified?

Product specifications (B) Signup and view all the answers

In the supplier search process, which is likely to be a consideration?

The influence of a creating salesperson (D) Signup and view all the answers

What occurs during the acquisition and analysis of proposals?

Gathering information when decision-making is unclear (B) Signup and view all the answers

What is NOT typically involved in problem recognition?

Identifying cost-cutting measures (C) Signup and view all the answers

What is the role of a professional seller in the buying process?

To influence the decision as early as possible (C) Signup and view all the answers

How do high interest rates affect different industries?

They impact housing starts but not transportation. (C) Signup and view all the answers

What is a significant consequence of rapid technological change?

Yesterday's technology can become dated quickly. (A) Signup and view all the answers

How does the Internet influence international competition?

It allows competitors to compete globally more easily. (C) Signup and view all the answers

What has happened to the role of purchasing in organizations?

It is shifting to a more value-creating function. (A) Signup and view all the answers

What is a key goal for purchasing professionals as their role evolves?

To develop stronger relationships with internal stakeholders. (B) Signup and view all the answers

How has outsourcing affected organizational structure?

Purchasing has become a core function requiring more specialization. (B) Signup and view all the answers

What impact does foreign competition have on companies?

It forces local companies to innovate or reduce costs. (B) Signup and view all the answers

What describes the shift in priorities within the purchasing profession?

There is growing emphasis on strategic alignment. (D) Signup and view all the answers

What is the primary role of a buyer in the procurement process?

To select and purchase products and services (C) Signup and view all the answers

Which of the following strategies is recommended for selling new-buy products?

Create a need and get involved early (D) Signup and view all the answers

What is a crucial step in isolating the buying situation?

Understanding the stage in the buying process (D) Signup and view all the answers

Which factor is NOT helpful in identifying powerful buying center members?

Evaluating the historical performance of past buyers (C) Signup and view all the answers

Who typically facilitates the exchange in the buying process?

Influencers (A) Signup and view all the answers

What should a salesperson do when dealing with established products?

Get a foothold and start small (B) Signup and view all the answers

Which approach should less effective salespeople avoid?

Getting involved later in the process (B) Signup and view all the answers

Identifying and tracing connections to the top is important for which reason in the buying center?

To find the decision makers (C) Signup and view all the answers

What is often true about purchasers in repeat buying situations?

They usually act as dominant players due to their specialization. (C) Signup and view all the answers

Which of the following values is NOT typically prioritized by purchasing agents?

Product quality (D) Signup and view all the answers

How do engineers typically approach decision-making compared to salespeople?

Engineers are generally cold, analytical, and suspicious. (C) Signup and view all the answers

What does selective retention refer to in the buying process?

Recalling information that aligns with personal needs and dispositions. (C) Signup and view all the answers

In the context of selective processes in information processing, what does selective exposure imply?

Individuals seek communication that aligns with their existing attitudes and beliefs. (D) Signup and view all the answers

Which factor is not part of the evaluative criteria for industrial product users?

Brand loyalty (C) Signup and view all the answers

What is the main purpose of marketers understanding the buying process?

To effectively match the right product with the right people. (D) Signup and view all the answers

Which of the following statements most accurately describes selective perception?

People adjust their view of a salesperson based on their pre-formulated opinions about the company. (C) Signup and view all the answers

What drives a company to consider a modified rebuy?

Dissatisfaction with previous suppliers (B) Signup and view all the answers

Which approach to modified rebuy involves limited choices and minimal research?

Simple Modified Rebuy (B) Signup and view all the answers

What is a common internal force that leads to modified rebuy situations?

Search for quality improvement (B) Signup and view all the answers

How do IN suppliers maintain an edge in modified rebuy situations?

By being proactive in understanding buyer needs (A) Signup and view all the answers

What may lead to companies seeking alternatives when considering a modified rebuy?

Significant advances in technology (B) Signup and view all the answers

What is an aspect that OUT suppliers must focus on to influence the buying organization?

Creating the need for alternatives (D) Signup and view all the answers

What characterizes a complex modified rebuy?

Long-term relationship development with suppliers (B) Signup and view all the answers

Why is developing a vested interest important in buying situations?

To ensure ongoing business relationships (B) Signup and view all the answers

Study Notes

Business Marketing Management Chapter 2: Organizational Buying Behavior

This chapter explores organizational buying behavior, examining factors influencing purchasing decisions.
The organizational buying process is a crucial topic, involving several stages.
Key influencing factors include individual, environmental, interpersonal and organizational factors.
A model of organizational buying behavior is presented, outlining stages like need recognition, need description, product specification, supplier search, proposal solicitation, supplier selection, order routine specification, and performance review.
Knowledge of organizational buying helps marketers make informed decisions on product design, pricing, and promotion.
This understanding is essential for market-driven firms to thrive, as they need to: identify profitable market segments, locate buying influences within segments, and effectively reach buyers with offers.
Buying is a process, not an event.
The process involves critical decision points and evolving information requirements.
The process starts with problem recognition.

Organizational Buying Process Steps

Problem Recognition: Buyers need to be aware of a problem before purchasing anything. This problem can be internal (e.g., machine breakdown) or external (e.g., new advertising campaigns).
General Description of Need: The purchasing department works with the buying group to define the needed product. Questions include determining the extent of the problem, relevant alternatives, and potential purchasing locations.
Product Specification: This stage involves identifying new task buys, straight rebuys, or modified rebuys. The product's specifications heavily influence the contract and wording.
Supplier Search: Identifying potential suppliers and considering factors like seller's ability to meet the need and contract terms. Often, preferred vendors are prioritized.
Proposal Solicitation & Analysis: This stage occurs when the organization needs more information to make a decision. Detailed vendor proposals are presented by a team of engineers, users, and purchasing agents. Success depends on effectively responding to needs and potential criteria.
Supplier Selection: Negotiations focus on factors besides price (e.g., quantities, delivery times, level of service). Warranties, payment schedules, and other final details determine this step.
Order Routine Specification: Once selected, the order procedure for the product is standardized.
Performance Review: Evaluation conducted after receiving the product or service, focusing on delivery time, product quality, contract adjustments, and overall vendor performance.

Buying Situations

New Task Buy: A perceived problem or need differing from previous experiences. Requires significant research.
Straight Rebuy: A repetitive purchase based on established experience. Relatively straightforward. The impetus is usually for maintaining current supplier relationships and existing order routines to maintain low risk.
Modified Rebuy: Decision-makers evaluate alternatives due to perceived benefits. Often changes in styles, materials, or solutions trigger this reevaluation. Factors can include dissatisfaction with the current supplier, new alternatives presented by a competing supplier, or strategic reviews of procurement processes.

Three Buying Situations - A Review

New task, straight rebuy, and modified rebuy represent three critical purchasing scenarios.

Forces Influencing Organizational Buying

Environmental Forces: Include Economic outlook, technological pace, and globalization.
Organizational Forces: Include objectives, strategies, purchasing procedures.
Group Forces: Include individual roles & relative interactions within the buying group.
Individual Forces: Include personal motivations, past experiences, and job functions.

Marketing Considerations for New Task Buys

Marketers can gain an advantage by initiating problem recognition, getting involved early in the decision process, understanding the buying organization's behavior patterns, and leveraging existing account relationships.

Why Procurement Managers Consider TCO

Total Cost of Ownership (TCO): Procurement managers consider the complete life cycle costs, including acquisition, possession, and usage costs.

Value-Based Selling Tools

Business marketers can apply value-based strategies to position their proposition based on the total cost-in-use, focusing on long-term relationships and value over individual transactions.

Segmenting the Buy

Segmenting the purchase categories based on procurement complexity, and the effect on corporate performance is beneficial to prioritize and target essential purchasing areas.

Other Relevant Information

E-procurement: Utilized to find new suppliers, communicate with current ones, and place orders, accelerating processes.
Reverse Auctions: One buyer invites bids, prequalified suppliers compete in a dynamic bidding process, particularly for commodities.
Centralized vs. Decentralized Purchasing: Centralized buying offers better ability to strategize. Decentralized purchasing grants more local control.
Marketing Strategy Response: Selling strategies echo the structure of purchasing for key accounts.
Industrial Sales: Assessing Group Forces: Determining roles, assessing influence, and identifying criteria are crucial for sales success in industrial settings.
Roles in the Buying Center: Identifying initiators, influencers, gatekeepers, deciders, buyers and users helps tailor sales strategies.
Buying Center Roles: Understand and adjust to buyer psychological needs.
Isolating the Buying Situation: Understanding buying phases and strategic approaches to match the selling strategy with the buying process.

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Description

Test your knowledge on the organizational buying process with this quiz. Explore various aspects like initial steps, decision points, and critical factors influencing buying behavior. Ideal for students or professionals interested in marketing and organizational management.