The Buying Process

Procurement spans several activities of the buyer and the supplier, and therefore it is of crucial strategic importance. It includes the supplier s processes such as production and fulfillment, in addition to the buyer s activities such as product-design, development, and operations. To ensure that procurement policies are effective, the underlying process-architecture must be well integrated. 

The procurement process begins with the buyer identifying potential suppliers. The buyer then formally request that the suppliers provide information about their goods and/or services, which typically takes one of three forms request for information (RFl), request for proposal (RFP), and request for quotation (RFQ). RFl seeks to obtain market intelligence on available products and services that satisfy the buyer s needs the suppliers get the opportunity to differentiate themselves from the competitors. The RFl does not commit the buyer to award a contract. 

For complex products, requiring suppliers inputs, the buyer issues an RFP, formally stating the work and performance requirements such as product configuration and/or delivery schedule. Suppliers respond to the RFP with details on how they would satisfy the requirements and the price they would be willing to accept. In response, the buyer negotiates final terms with suppliers. Thus, the process is generally iterative. 

The RFQ is used in a tendering process where the buyer is able to state the exact specifications of standard goods or services needed. The suppliers submit closed bids on the tender and the buyer selects the best bid based on some objective criteria. The information received through RFP, RFQ, and the supplier-bids are translated into formal contracts. 

A contract is a formalization of the terms of agreement between two parties. It usually stipulates how the partner is expected to perform. In some contracts, it also specifies corrective actions if the partner s performance is below expectation. Contracts that are based on measurable values such as quantity, time, and price, are easy to implement. Contracts based on partner-specific attributes such as cost and effort, suffer from information asymmetry and are hard to implement. 

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The art of selling revolves around converting the interested (potential) customer into a purchaser. It is helpful if you as the producer (seller) can put yourself into the situation (role) of the purchaser. Even if you do not sell direct to the consumer but only deliver to a bulk buyer, you should still have a clear picture of the buying process and be able to judge sales successes and failures according to the inherent laws of the buying process. 

Customer behaviour is essentially dependent on observance of the laws of the buying process. If you ignore customers and do not provide them with information, you will not persuade them to buy, even though they may be interested in the product itself. 

How the buying process interacts with the selling process... 

These technologies brought science to the buying process and allowed greater visibility and automation of spend. The value of these process efforts elevated the procurement organization and made it less focused on day-to-day operations. However, the automation of spend was for indirect procurement, not the automation and orchestration of decisions made on direct materials. 

In fact, SuperProfile states that on any given day, the avereige customer will be exposed to 2,904 media messages, will pay attention to 52, and will positively remember 4. The buying process has drastically changed too. 

All of these factors put marketers in a complicated situation. How do you find these leads, breakthrough the noise, and create relationships How do you make sure your messc es cire heard and resonate with your audience And how can you help your customers educate themselves through the buying process so that they ultimately choose you and your company It s a lot to think about ... 

Promotional content is an asset that delivers a hard sell. Think of a datasheet, pricing sheet, or even an ebook that goes into more detail regarding product or service information. This content is considered late-stage (late in the buying process) and should be used when a lead is very close to making a purchase. 

In contrast, if someone searches for comparing marketing automation vendors, that person is fcuther along in the buying process and therefore should get a mid- to late-stc e ad and asset discussing the differences between various vendors. 

For these reasons, in addition to executive communications, you should consider the advantages of other internal communications methods to gain participants buy-in. The installation process presents a natural opportunity in fact, employee communications should be a priority as you begin the roll-out. 

C15-0043. What is the rate-determining step in each of the following processes (a) People buy their lunches at a cafeteria, (b) Music enthusiasts enter an amphitheater for a concert, (c) You leave a pay-as-you-exit parking lot. 

There was no one on site to supervise the construction process, and it turned out the contractor was less than scrupulous. He used traditional construction materials laden with formaldehyde. My dream house was a nightmare, a toxic soup I had to live in for ten months until we made the contractor buy it back from us. 

If we consider firms as a whole, their only external purchase is labour force. All other exchanges being internal transactions, no further monetary payment is required. Only at the end of the production process firms buy capital goods to be used in the following period. 

In order for sellers to sell and buyers to buy, an understanding of each other s negotiating position and constraints can be helpful. Also, in the business of water treatment, with its emphasis on marketing specialty products and services, it is useful to reflect on the sequence of events that leads not only to a successful sale but also to the realization of benefits for each party. Thus, this chapter attempts to discuss some of the more basic, yet important, elements of the marketing process. 

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