CHAPTER 6 “The Characteristics of Organizational Buying” Demand Characteristics: Industrial demand is derived : the demand for industrial products and services is driven by demand for consumer products and services. Size of the Order or Purchase : larger than consumer buying Number of Potential Buyers : smaller Organizational Buying Objectives: to increase profits through reducing costs or increasing revenues. Includes buying from minorities and environmental initiatives Organizational buying criteria: the objective attributes of the supplier’s products and services and the capabilities of the supplier itself. Includes 1. Price 2. Ability to meet the quality specification required for the item 3. Ability to meet required delivery schedules 4. Technical capability 5. Warranties and claim policies in the event of poor performance 6. Past performance on previous contracts 7. Production facilities and capacity Supplier development : involves the deliberate effort by organization buyers to build relationships that shape suppliers’ products, services, and capabilities to fit a buyer’s needs and those of its consumers.
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