Consumer and organisation buying

1. TEACHING WEEK 3

Sales Management

2. Objectives

After finishing this lecture student will be able
to answer following questions –
Consumer and organisation buying
Who buys?
Organisational decision making process(Buy phase)
Difference between consumer and organisation buying
E-Procurement
Dr. Anil Kumar (Senior Lecturer)
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3. Consumer and organisation buying

For both types of buyer, an understanding of customers can only be obtained
by answering the following five questions:
1. Who is important in the buying decision?
2. How do they buy?
3. What are their choice criteria?
4. Where do they buy?
5. What do they buy?
Dr. Anil Kumar (Senior Lecturer)
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4. Who buys?

Initiator: the person who begins the process of considering a purchase. Information may be gathered by
this person to help the decision.
Influencer: the person who attempts to persuade others in the group concerning the outcome of the
decision. Influencers typically gather information and attempt to impose their choice criteria on the
decision.
Decider: the individual with the power and/or financial authority to make the ultimate choice regarding
which product to buy.
Buyer: the person who conducts the transaction: who calls the supplier, visits the store, makes the
payment and effects delivery.
User: the actual consumer/user of the product.
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5. Buying roles

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6. Organisational buying decision-making process

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7. Organisational buying & Consumer buying

Organisational buying & Consumer buying
Fewer organisational buyers
Close, long-term relationships between organisational buyers and sellers
Organisational buying may be to specific requirements
Organisational buyers are more rational
Reciprocal buying may be important in organisational buying.
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8. Organisational buying vs Consumer buying

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9. Organisational buying behaviour

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10. Different types of buying and their characteristics

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11. Factors influencing organisational buying behaviour

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12. Digitalization

Digitalization means creating, communicating, delivering, exchanging offerings
that have value for customers.
Could digital technologies …
… improve the way you generate value?
… change how you target the customer?
.... affect the value proposition?
… enhance the enterprise capabilities?
… help to differentiate from the competition?
Dr. Anil Kumar (Senior Lecturer)
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13. Digitalization

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14. Digitalization and sales

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15. Digitalization and sales

Digitization has long since arrived in our everyday working and living lives. It should not be viewed with fear, but as an opportunity for
new market and growth potential.
Digital sales structures and communication methods are the optimal way to maintain your own company in a competitive market now and
in the future, as well as to reach and retain demanding customers in the long term.
The COVID-19 pandemic, in particular, has recently demonstrated the urgency for the manufacturing industry to adopt new digital ways
to function in times of crisis.
Customer orientation has also become much more important in the B2B sector. In the future, the customer will increasingly set the tone in
sales work and should be the focus accordingly.
Automation and analysis in the course of sales digitization are not intended to replace employees, but to provide them with reliable
support in their day-to-day work so that they can concentrate fully on their core business.
For the digital transformation to succeed, not only the technical requirements for a system implementation must be met, but also the will
of your employees to get involved with the new system and to rethink their own habits.
Dr. Anil Kumar (Senior Lecturer)
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16. E-procurement

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17. E-procurement

Electronic procurement, commonly referred to as e-procurement, defines the automation of
procurement and supply chain processes using internet based applications and technology. This
expands the idea of enterprise resource planning (ERP) systems, allowing the automation of
internal business processes, thus providing a platform that supports automation at a global
level. It allows procurement professionals across the world to communicate information simply
and efficiently, streamlining the global procurement process; reducing time and costs without
compromising on standards and quality
Dr. Anil Kumar (Senior Lecturer)
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18. E-procurement

Digital technology has completely transformed the way business is conducted, not only in
selling goods and services but also in sourcing supplies and materials. Most companies today
adopt an e-procurement system for procuring goods. It is the same as traditional procurement,
only the process takes place online. E-procurement benefits businesses greatly, especially in
terms of cost and productivity. However, there are still challenges to fully digitalizing
procurement. Let's dive in and learn more about this interesting concept.
Dr. Anil Kumar (Senior Lecturer)
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19. E-Procurement Advantages

Reduced Transaction Time: individual business activities (transactions) can be completed much
more quickly; they are not restricted by office hours and may not even need human intervention,
thus increasing the capacity to complete transactions on a real-time basis. This means that
downstream processes are not constrained by waiting for transactions to be completed.
Electronic catalogues: the development of e-catalogues has enabled organisations to market their
product offer electronically, this has been a fantastic marketing tool for sellers and for buyers, there
is price transparency (you can easily see how much items cost) and buyers can compare offers from
various e-catalogue vendors.
Dr. Anil Kumar (Senior Lecturer)
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20. E-Procurement Advantages

Increased Standardisation: With the electronic catalogues mentioned, there has been a move by some
suppliers to offer a more standardised offer, thus allowing buyers to easily compare the offers from e-
catalogues, however care must be exercised in these comparisons as it is difficult to assess the quality of
products without samples. If in doubt request samples and take time to make your own assessment.
Wider Spread Supplier Bases: Because the virtual e-procurement portals are web-based, buyers can
search suppliers worldwide, meaning a wider selection of products and services are available to the
organisation meaning that when items are not available locally, it is still possible to source these. It is
important to remember the time and cost of shipping goods, but it’s great to know that it is possible to
source items from somewhere in the world!
Dr. Anil Kumar (Senior Lecturer)
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21. E-Procurement Advantages

Simplified Global Procurement: With the e-procurement applications
supporting various languages, currencies, international taxation and financing,
shipping regulations and more, it is simple for buyers and suppliers in different
countries worldwide to communicate and co-operate.
Increase Productivity: As e-procurement automates some of the procurement
and wider business processes typically handled by employees, this will free up
time for the team to spend on more strategically significant functions and tasks.
For example with automated matching of invoices, goods can be ordered,
processed and paid in a matter of minutes; the key however is to ensure that the
supplier is set up in the buyers systems support as much automation as
possible.
Dr. Anil Kumar (Senior Lecturer)
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22. E-Procurement Disadvantages

The main drawback of e-procurement is its heavy reliance on
software and electronic system. This makes the company
vulnerable to hacker attacks.
Technology also requires regular updates and training for
staff, which might incur extra costs.
There is also difficulty getting all suppliers on board,
especially older vendors who are not used to modern
technology. For example, they might have a hard time
updating digital catalogs.
Dr. Anil Kumar (Senior Lecturer)
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23. Examples of E-procurement functions

E-procurement has many functions in a company's purchasing process. Some examples are:-
Vendor onboarding - the process where the company sends questionnaires to gather data from
multiple vendors.
Spending analytics - all transactions are recorded on the e-procurement system. Companies
can analyze this data to improve future buying decisions.
Online information request - Companies can use request quotes and negotiate contract terms
on an e-procurement platform.
Online market research - The e-procurement platform makes it easy for the company to find
and compare different suppliers. It can also shortlist potential candidates based on the set
criteria.
Paperless processes - since all transactions occur online, there is no paperwork. The
transaction is faster and less prone to human error.
Dr. Anil Kumar (Senior Lecturer)
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