Organizational buying process

Organizational buying process:

•  Need Recognition: The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a good or service. The recognition can be triggered by internal or external stimuli. Internally, some common events lead to problem recognition. Example a machine breaks down and requires new parts. For externally, the buyer may get new ideas at a trade show, see an ad etc.
•  General need description and product specification: Next, the buyer determines the needed items’ general characteristics and required quantity. In other words, this stage involves development of product performance specifications to solve the problem.
•  Supplier search: possible suppliers for the product are searched and located at this stage. The buyer tries to identify the most appropriate suppliers. Suppliers are identified through
       Internal Search: the sources can be company files, catalogs, market information system and purchase department, etc.
       External search: it is by soliciting proposals from known suppliers or through public notice.
  This stage produces a list of suppliers.
• Proposal evaluation: proposals are invited from suppliers. They can be based on competitive bidding. Tenders and quotations may be used. The proposals are evaluated to determine whether the products meet performance specifications. Suppliers are evaluated for capability, price and service.
•  Supplier selection and Purchase decision: after evaluating proposals supplier is selected on the basis of merits. Once the supplier is selected negotiation are made and finally an order is placed.
  
• Post purchase behavior: the performance of product and supplier is evaluated at this stage. Actual performance is compared with specifications. If the performance is not satisfactory, repeat orders are not placed with the supplier.