Taking a Look at Business Buying

Question 17 The manager of the Capitol Restaurant noted that the restaurant had experienced a decreased number of evening customers. The manager promptly ordered the chef to rewrite the evening menu. Customer feedback later indicated that the problem had not been the menu but poor service from the wait staff. The manager's decision to have the menu revised suggests that he failed to a) identify the problem. b) evaluate the alternatives and consequences. c) properly diagnose the cause of the problem. d) evaluate the decision and its consequences. e) identify a solution. Question 18 Characteristics of managerial decisions include which of the following? a) Success b) Certainty c) Convention d) Lack of structure e) Speed Question 19 Advantages in using a group for decision making include

Members of the buying center assume different roles throughout the procurement process. The different roles are users, gatekeepers, influencers, deciders, and buyers. The buying center consists of Steven Anderson the purchasing agent, Jim Thompson the manager of Manufacturing Operations, Carl Jefferson the senior engineer of Test Engineering, Kevin Reilly the vice president of northern California operations.

In today’s economy many individuals try to cut costs as much as possible. Kudler Fine Foods thought that creating a frequent shopper program for their valued customers would be a profitable and resourceful venture. Not familiar with the steps in implementing this type of program, Kudler hired a team of information technology business managers. Kudler believes that this team would greatly benefit the implementation process. In this summary, the team of IT business managers

Customers often have substantial power to affect the competitive environment. This power can take the form of easy consumer access to several retail outlets to purchase the same or similar products or services (Pearlson & Saunders et al., 2009). L.L.Bean has, from the beginning, recognized that the customer has many options in spending. This recognition of the power the customer holds is reflected in

Various organizations operate in an increasingly complicated industry - more than a few different products, ample of business process and clients ranging from retailers to small business, service providers, exporters, and independent shops. The organization has identified increasingly the evolving trend in consumers and responds

In a business buying center there are five different roles. The first role are the users. These are the people who will be use the good or product. They influence the buying decisions because ultimately they will be the ones using the product. The second role are the gatekeepers. These personnel are the ones that give product data. They control what information the members of the buying center will review. The third role are the influencers. They are usually specialized staff that break down what the “pros” and “cons”

Bargaining power of buyers -Buyers are not in concentrated groups and do not buy in large amounts. However, within the entertainment industry, customers have a lot of alternatives and have no switching cost. However the introduction of DVDs, influenced customers to purchase DVDs since the cost is almost the same cost of rentals. This makes buyer power moderate (Xie & Lin, 2008).

The power of buyers is high because this company depends of the businesses and consumers’ demand. This is because they can decide where to buy

In a group, several individuals may interact to influence the purchase decision. The typical roles in such a group decision can be summarised as follows:

In order to understand what reference group influences are, it is necessary to firstly understand what a reference group is. The depth of information surrounding reference groups and the influences they poses on individuals, particularly on consumer purchasing behaviour is vast and one could get lost in the mist of it all. Therefore, it is vital to ensure that only research relevant to this study is included in this section, thus an overview of what a reference group is will be provided, then the different types of reference groups will be explored based on previous research, then the data will start to look at the influences reference groups have on individuals, and their purchasing behaviour, in order to fully understand the power that reference groups have.

It is possible to further classify reference groups into four types, depending on the function they perform and the kind of influence they exert reference groups operate by establishing certain norms, roles and status within the group for members to follow. As explained earlier, norms are unwritten codes or, standards of conduct that are assigned to individuals within the group. In addition, specific roles have been identified in group purchasing behavior in the attempt to select the best among alternative brands or makes of a product. These are described as those of the influencer, the gatekeeper (i.e. the individual who has the maximum control over the flow of information), the decision maker, the purchaser and, the final user. Status positions have also been designated within a group. High status of members within a group implies greater power and influence. Products are sometimes purchased to demonstrate status, for example an elegant dress or, an expensive car. The influence exerted by the group depends on the type of reference group it is. There are four general types of groups namely, normative, comparative, status and dissociative groups.

of single members and their rate of involvement in the purchase process can also vary according to the rate

Buying a car is a high-involvement purchase as you can be faced was a large selection of choices. When figuring out which car to buy, consumers consult the advice of family and friends. However, according to a vehicle customer survey from Maritz Research, the most important information that is also the most influential in the buying decision tends to come from an individual that has a lot of knowledge on the product, such as a cars salesperson at the dealership. Considering the complex nature of this decision, reference groups play a large role. A reference group is ‘an actual or imaginary individual or group conceived of having significant relevance upon an individual or group’s aspirations

By grafting its system of custom direct sales onto the Internet infrastructure, Dell has transformed these activities, creating an innovative and efficient procurement, production, and distribution network. The innovative advance made by Dell in deploying Internet communication as the foundation of its production network, is a process innovation. Although to some extent, the Internet has enabled Dell to create a new product -- a PC custom-configured through Internet communication -- it is the process of organizing flows of materials and information within its network, from customer order to procurement, production and delivery, by means of Internet communication, that defines the innovation at the Firm. The case supports this notion by stating “While most other PCs were sold preconfigured and pre-assembled in retail stores, Dell offered superior customer choice in system configuration at a deeply discounted price, due to the cost-savings associated with cutting out the retail middleman. Additionally, an important side-benefit of the Internet-based direct sales model was that it generated a wealth of market data the company used to efficiently forecast demand trends and carry out effective segmentation strategies. This data drove the company’s product development efforts and allowed Dell to profit from information on the value drivers in each of its key customer

Here central in this picture is the buyer. On the left side are the Initiators and users connected to it and on the right side is the higher level management which includes influencers, deciders and the approvers. On lower side the buyer is connected to gatekeeper who is further connected to an outside agency called the marketer or supplier. All these components play a crucial role making a thoughtful and economic purchase. Here, we are applying the buying center concept to a school which wants to buy the laptops for its teachers and students.