THARAKA DIASDirector – Essence BTC

MBA(USA), MBA(Aldersgate),BBA(USA), Dip in Mgt, ACIM(UK), FAEA(Dip in AEA-UK), FinstSMM(UK),

CPM(Asia), MSLIM, PM(Sri-Lanka)

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Needs - state of felt deprivation including physical, social, and individual needs (e.g., food)

Wants - form that a human need takes as shaped by culture and individual personality (e.g., pastry)

ExperiencesExperiences PersonsPersons

ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

PlacesPlaces

OrganizationsOrganizations IdeasIdeasActivit iesAct ivit ies

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Doesn’t Result in the Ownership of Anything

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Doesn’t Result in the Ownership of Anything

Demands are wants for specific products backed by and ability to buy

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Customer Consumer

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Consumer vs. Organizational buying behavior

Main types of buying situations in B2B Stages of decision in B2B Roles in B2B procurement Influences on organizational behavior Buying centres in summary

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Decisions made by consumers are quite simple Organizational buying processes are more complicated, there

are several phases and steps Different buying behavior for different products and target

groups Simple consumer goods like food and beverages are bought

very spontaneously – influenced by advertising and product presentation

For premium consumer goods (expensive clothes, computers) – buying behavior is getting more rational – comparison

Private investment goods – price bargaining

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More than one person involved Buying process follows certain rules Price comparison, standardisation,

tenders = Ausschreibungen)

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Straigtht rebuy – routine decision, repetitive process (energy, office supplies, raw materials, wood, cigarettes), component suppliers for the automotive industry – little or no new information

Modified rebuy – more complicated but less sophisticated: cars, trucks, computers, consulting – modified rebuys are often treated too uncautious

New task – calls for thorough research – industrial plant – highest level of uncertainty. Strategic new tasks are of extreme strategic and financial importance (aircrafts, military equipment, infrastructure) – re-evaluation of alternatives and search for new information and new alternatives

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Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order routine specification Performance review

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Backhaus developed a widely usable model to distinguish between 5 phases of procurement

Preliminary application (initiation phase) Tender proposal Negotiation Processing of order Warranty and services

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Group of people involved in the buying process – buying center

Webster/Wind model shows 5 different roles – not institutionalised

This causes probleme in identifying and targeting the right people within the decision process

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Role keepers have different tasks – not mandatory

Buyer User Initiator Gatekeeper Influencer

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Formal authority to sign contracts Member of purchasing department Influences the vendor selection Not in technical details Main criteria: price + terms and conditions

of the contract

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Person working with the product Interested in benefits and unobstructed

function of the product to buy Large knowhow and preconceived

opinion

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A person with high technical knowledge and practical experience

definition of minimum requirements on technical or company standards

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Controls the flow of information within the buying center

Assistant of decision maker Influence by preparing the decision and

the relevant documents

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Right to say yes or no Mightiest person

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Person who brings new ideas and solutions into the company

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Long decision taking process High risk Complex buying center The specific competitive situation

Fever, larger buyers Geographically concentrated Derived demand Close supplier customer relationship Professional purchasing DMU Direct purchasing Motive for purchase

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diastharaka@gmail.com0773869007