Project title: Organizational Buying Process – What a company should do?
E66 Yong Jia Juin
Table of Contents
2. Purpose of Paper2
3. Organization Buying Behavior2
3.1. The purchasing process3
3.1.1. Recognition of problem (need)3
3.1.2. Determination of characteristics, specification and quantity of needed item 4
3.1.3. Search for qualification of potential success 4
3.1.4. Acquisition and analysis of proposals and Evaluation of proposals and selection of supplier(s)5 4. Recommendations5
4.1. Life-cycle costs6
4.2. Creeping commitment6
4.3. Importance of purchase to buying organization7
Cloverleaf plc was a UK-based company supplying bottling machinery used in production lines to transport and fill bottles. John Goodman, the sales executive covering France, was in charge of selling the new bottling machinery to Commercial SA, a large Marseille-based bottling company.
2.Purpose of the Paper
The purpose of the paper is to help understand organizational buying behavior as well as the decision making process through careful analysis of the case study. It will also help understand the effective sales strategies when it comes to selling a product to a company.
3.Organizational Buying Behavior
When analyzing the structure of an organization buying behavior, it is crucial to first identify whom are the people involved in making the decision or who has the authority to make the final decision. The decision-making units (DMUs) are the ones who have control over these decisions. According to (Hawkins, Best, & Coney, 2004), DMUs are individuals (representing functional areas and management) within an organization who participate in making a given purchase decision. The DMU in the case study consists of Dr Leblanc (Technical Director), M.Artois (Production Engineer) and M.Bernard (Purchasing Manager).
3.1.The Purchasing Process
3.1.1Recognition of problem (need)
From the case study, the problem (need) occurred when Commercial SA decided that they needed to purchase a new bottling line as a result of expansion. This need can be categorized as an internal factor, which lead to an active behavior. (Jobber & Lancaster, 2012) In this situation, John Goodman should make use of this opportunity by highlighting the problem and differentiating his product over the competition to Dr Leblanc, the technical director of Commercial SA.
Since Dr Leblanc told him that he had already met and discussed with three other competitors, the problem with John was that he just presented the sales literature and did not explain anything else upfront to Dr Leblanc to clearly interest and differentiate his product from the competitors.
3.1.2Determination of characteristics, specification and quantity of need item On March 8, John Goodman met up with the production engineer, M. Artois to discuss and check with the product specifications. The good news for John is that his product exceeded Commercial SA’s required specifications together with a one of the competitors, Hofstead Gm.
At this stage, what John did after being told of that piece of critical information was to only show M. Artois some of the technical manuals. This was where John failed as a good salesperson. He did not use the opportunity to influence and persuade M. Artois to the specific features that only their product possessed (lockout criteria).
3.1.3Search for qualification of potential success
On March 11, during a meeting with Dr Leblanc, John Goodman was asked to give three reasons why Commercial SA should buy from Cloverleaf plc. This was a crucial point in the decision making process for Commercial SA as Dr Leblanc was trying to differentiate between the companies that were selling the bottling machinery.
John Goodman did not do a good job in placing his company at an...