SESSION 13:ORGANIZATION BUYING

Organization Buying

Organization buying is the bulk buying that an organization does for resale or manufacturing purposes.
Also it helps Lux because they sell large volumes of soaps. For example: Lux sells its small packs to  railways in huge numbers, hence it helps Lux in terms of volume, it also helps the buyer because since they require only small quantity, these packs are perfect for them. Overall its a win-win situation.:
Another example  are the retailers or the franchisees or the mom-pop stores that buy Lux soapsr in bulk to sell in their shop. Bulk buying helps in getting the buyer better and cheap prices for that product.
Also it helps Lux because they sell large volumes of soaps. For example: Lux sells its small packs to  railways in huge numbers, hence it helps Lux in terms of volume, it also helps the buyer because since they require only small quantity, these packs are perfect for them. Overall its a win-win situation.

Organization Buying Behaviour or the Organizational Buying is the decision making process organizations establish the need for purchased products and services, then identify, evaluate, and choose among alternative brands and suppliers. Business market is a dynamic place where firms & other companies buy from different firms or companies which includes goods & services for the productions of different goods & services which are then sold, rented or supplied to others. FMCG Companies like Lux also are into organization buying from the suppliers who supply the different kinds of raw materials to them. It is like a chain of companies inter – connected to provide services to one another.
When one compares Business Buying to Consumer, it has fewer customers but larger ones. One also gets to see closer business relationships in Business Buying. This is because of the nature of the business where each buyer or supplier is depended on the other for providing the services. Lux has a well-connected network from which it buys because of the nature of business it is in. The Businesses in Fast Moving Consumer Goods segment are depended on the consumers market demand for the business market demand. The demand is also depended on the business cycle.
Lux will have a buying centre which will be a decision making unit of the organization when it comes to buying from organizations. It consists of initiators, users, influencers, deciders, approvers, buyers, and gatekeepers. To influence these parties, marketers must be aware of environmental, organizational, interpersonal, and individual factors.
·  Initiators - Users or others in the organization who request that something be purchased.
·  Users - Those who will use the product or service. In many cases, the users initiate the buying proposal and help define the product requirements.
· Influencers  - People who influence the buying decision, often by helping define specifications and providing information for evaluating alternatives.
· Deciders - People who decide on product requirements or on suppliers.
·  Approvers - People who authorize the proposed actions of deciders or buyers.
·  Buyers - People who have formal authority to select the supplier and arrange the purchase terms. Buyers may help shape product specifications, but they play their major role in selecting vendors and negotiating.
· Gate Keepers – These people prevent the sellers from directly accessing the decision making process e.g. Telephone Operators, Receptionists etc.

The buying process consists of eight stages called buy phases: (1) problem recognition, (2) general need description, (3) product specification, (4) supplier search, (5) proposal solicitation, (6) supplier selection, (7) order routine specification, and (8) performance review.
In Problem Recognition, the problem or the need for a buying a product for the business is identified. It also takes into account the need which can be from internal factors or the external factors. Lux will take into account the need when someone from inside the company points out the need to buy a product or service or someone from external sources brings to the attention of the company. In General Need Description & Product Specification, the specialists from internal sources of Company like Lux will advise the company on the exact requirements of the product.  In supplier search, the right supplier will be selected after going through the specifications for the right product. Proposal solicitation will be the next stage in the process where the proposal will be reviewed and the supplier will be selected in the next stage. Once the supplier is selected, the performance review will take place which will determine whether the buying process & the product supply is taking place according to the laid down procedures.