Submitted for I.T.

S Ghaziabad

Submitted To Prof. SWATI SINGH

Submitted By Chanchal dey

PGDM (2012-2014) Section-B

INSTITUTE OF MANAGEMENT & SCIENCE, MOHAN NAGAR GHAZIABAD Date: 17/09/2012

The Business Buying Process

There are 8 stages of business buying process. These are discussed below.

Problem recognition

General needs description

Product specification

Supplier search

Proposal solicitation

Supplier selection

Order-routine specification

Performance review

Business Buying Process

1. Problem recognition:- The buying process start when a

company identifies a need that can be resolved by acquiring a product or service. The company may decide a new product or require new parts on a machine because of the manager unhappy with current product, which is internal. Externally the company gets new idea & solution regarding problem on the product.

2.

General Need Description:-

The buying committee will often

work with e initiator, users, or others to determine the required characteristics and quantity of the product, in addition to researching alternative solutions to fulfill the need.

3. Product Specification:- In this stage the business buying

process in which the company describes the general characteristics and quantity of a needed item. For standard items, this is simple. For complex items the organizational buyer works with specialist and technical experts to define relevant product characteristics such as re liability, durability, or price. The buying organization now develops the items technical specification. Often, the company will assign a product-valueanalysis engineering team to the project. Product value analysis (PVA) is an approach to cost reduction that studies components to determine whether they can be redesigned or standardized or made by cheaper methods of production.

4. Supplier search:- The buying committee identifies and compile

the most suitable qualified suppliers by reviewing trade directories, doing computer search recommend by other companies.

5. Proposal solicitation:- In the next step the buying committee

will require a detailed written proposal and extend an RFP (request for proposal) inviting qualified suppliers to submit proposals. After reviewing the proposals the buyer will invite a few prospective suppliers to make formal presentations in person. At this point it may make sense to stop all other marketing communications directed at this prospect and focus all communication via personal communication between the buying committee and sales person.

6. Supplier selection:-Before choosing a supplier the buying

committee will specify the desired supplier attributes (product and service quality, reputation, on time delivery, ethical corporate behavior, honesty communication and competitive price) and then rank the suppliers based on these attributes to identify the most suitable supplier. As part of the process buyers may even attempt to negotiate with preferred suppliers for better prices and terms before making a final selection In order to position yourself most favorably, take the time to understand the specific buying situation, relative importance of the product attributes and how their prospects determine their valuations.

7. Order-Routine specification:- the buyer now prepare an

order-line specification, after selecting a supplier, the buyer will negotiate the final order by listing the technical specifications, agreed upon price, quantities, expected time of delivery, return policies, warranties and any other terms of negotiation.

8. Performance Review:- The buyer periodically reviews the

performance of the chosen supplier. The buyer may contact user and ask them to rate their satisfaction .The performance review may lead the buyer to continue, modify or end the relationship with the supplier. The sellers job to monitors the same factors used by the buyer to make sure that the seller is giving the expected satisfaction.