Business buying process contains eight stages. A purchaser dealing with new task buying situation may generally pass through all these steps of the buying process.
On the other hand some of these stages may be skip by purchasers facing straight or modified rebuy situations. Following are these eight stages of business buying decision process.
Stages of Business Buying Decision Process
- Problem Recognition
- General Need Description
- Product Specification
- Supplier Search
- Proposal Solicitation
- Supplier Selection
- Order Routine Specification
- Performance Review
Now let check below all these steps of business buying decision process in detail
Problem Recognition
When someone in the business organization feels a need or problem that can be satisfied by getting particular product or service, the buying process starts. The internal or external stimuli influence the need recognition.
Decision can be made in case of internal stimuli about launching new product that needs new materials and production equipment.
Or in other case a machine may be damaged and require new component. Possibly a production manager is not happy with the prices, service or product quality of a current supplier.
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Externally, a purchaser may see an ad, acquire some new ideas at trade show or salesperson calls the purchaser regarding offering a lower price or good product.
The business marketers’ use advertising media to make their customers in understanding a potential problem and then the marketers present their products as solution to such problem.
General Need Description
The purchaser prepares a general need description in this step that shows the quantity and features of needed product, after recognizing the need.
There are some problems associated with this process for standard items. The purchaser must work with others like engineers, consultants and users for defining the item, in case of complex items.
The significance of reliability, price, durability and other attributes wanted in the items, are ranked by the team. In this stage, the smart business marketer can assist the purchasers in specifying their problem and delivering information about the value of various product features.
Product Specification
Mostly with the assistance of value analysis engineering team, the buying business organization next builds the technical specification of the product’s item.
Value analysis is an approach that is employed for reducing cost in which factors are examined properly to find out if they can be standardized, redesigned or prepared by minimize cost of production.
The best features of the product are decided by the team which specifies these features accordingly. Value analysis can also be utilized by the seller in order to assist in securing a new account.
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Outside seller can covet straight rebuy situation into new task situation by presenting purchaser an effective manner to create an object in order to provide them chance to get new business.
Supplier Search
In order to find effective vendors, the buyer now performs supplier search. A small list of qualified vendors is compiling by the purchaser by doing search on computer, reviewing trade directories or getting recommendations from other business organizations.
In recent years, many business organizations are using Internet for searching of their vendors. The marketers of smaller business organization can get the same gains as the larger business organization by listing it on the online catalog with small fee.
In case of new buying task and costly & complex items, there will be increased portion of time spent by the purchaser in searching the suppliers.
The supplier should list his business organization in the main directors and maintain a better reputation in the marketplace.
Moreover, the salespeople must monitor the business organizations that are seeking the vendors and make sure that their business organizations are view.
Proposal Solicitation
In this stage of business buying decision process, qualified vendors are invited by the purchasers to submit their proposals. In reaction, some vendors will send a sales person or only a catalog.
The purchaser will generally need formal presentations from every vendor or detailed written proposals, in case of complex or expensive item.
In reaction to purchaser proposal solicitations Business marketers should be expert in writing, searching and presenting proposals. Proposals should not be only technical documents rather these should be marketing documents too.
Confidence should be inspired by presentations along with the making of the business organization of marketer that should excel from the competition.
Supplier Selection
Proposals are reviewed by the members of buying center and selection of one or more vendors is made in this step of business buying process.
A list of attributes of desired vendors along with their relative significance is made by the buying center during the vendor selection.
Following attributes are listed by purchasing executives in one survey that are most important in affecting the relationship between customer and vendor, like on-time delivery, quality products & services, honest communication, ethical corporate behavior and competitive prices.
Other significant components contain technical aid & advice, performance history, repair & servicing capabilities, geographic location and reputation.
The members of buying center identify the potential vendors by rating vendors against these attributes.
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As a portion of purchaser selection process, buying center should determine that how many vendors to utilize. A large vendor base are preferred by many business organizations in past in order to get price concessions and to confirm proper supplies.
Annual negotiations are insisted by these business organizations for renewal of contract along with the transferring of the portion of business they provide to each vendor from year to year in most cases.
However, in recent years, number of vendors is reducing by the business organizations.
Now single sourcing trend comes forward in which one vendor is considered. There is one vendor to manage in case of single sourcing so it is not difficult to control newsprint inventories.
Order Routine Specification
An order routine specification is now prepared by the purchaser. Final order is contained in it along with the selection of vendor or vendors.
Its further contains list items like quantity required, technical specifications, warranties and return policies in case of repair, maintenance and operating items.
Performance Review
Vendor’s performance is reviewed in this stage. Users may be contacted by purchasers in order to enquire about the rate of satisfaction.
The purchaser is leaded by performance review to continue, drop or modify the arrangements. The seller’s duty is similar that he should observe the same components that are considered by the purchaser in order to confirm that expected level of satisfaction is provided by the seller.
Participants in the Business Buying Process
The purchasing business organization has its own decision making unit which is referred to as its buying center which includes all the units and individuals that are involved in the business decision making process.
All members of the business organization are contained in the buying center and act any of the five roles in the buying decision process.
Users
The members of business organization who utilize service or product are referred as users. The buying proposal is started and assistance is provided for defining product specifications by the users in many cases.
Influencers
Influencers mostly assist in defining of specifications of product along with the delivering of information for measuring alternatives. Significant influencers are technical personnel.
Buyers
The selection of supplier and arranging of terms of buying, are performed by buyers who have formal authority for this activities.
Although the main roles of buyers is to make selection of supplier along with the negotiation but the buyer may assist in shaping product specification.
High level officers may be included in more complex buying situations who participate in the negotiations.
Deciders
The selection and approval of final vendors is done by the deciders who have formal or informal power to do this activity. The buyers are mostly the approvers or deciders in routine purchasing.
Gatekeepers
The flow of information to other is controlled by gatekeepers. For example, the activity of preventing sales people from viewing deciders or users is performed mostly by the purchasing agents. Personal secretaries and technical personnel are included as other gatekeepers.
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