Organizational buying can be defined as the process which covers decision making. The formal organization is responsible for creating the need for the product or services. It includes the process of identifying, evaluating and selecting the from the different brands and suppliers. Organizational buyers can be defined as a limited number of customers for a limited number of products. Organisational buying behavior is generally in large numbers. The relationship is generally closed which is very much required. The demand is usually generated from the production and sales of buyers (Wang, 2014). There is also the risk of high demand fluctuation in which there is fluctuation in the purchase of a certain product from the organizational side. The buyers of organizational are mostly trained personnel.
The purchase of the organization is also influenced by many persons. There is a lot of transition happening as the organizational buyer deal with manufacturers for bulk purchasing. There are different organizational buying situations.
They are straight rebought, modified rebuy, new task by, and systems buy. In straight rebuy situation, there is only purchasing department which is involved. The purchasing department gets instructions from the inventory control department (Wang,2014). The order may be of reordering the material. The inventory control department also takes into consideration the quotations from different vendors which are approved.
The suppliers who are approved has to make an effort for maintaining quality in their service, while the out suppliers try to make efforts in getting their name list in the approved list. To get on the approved list the supplier has to offer something which is new or innovative (Wang,2014).
The risk of the buyer that the delivery charge is decided by the buyer. If any item is lost in the process of shipping, the shipping charge has to be refunded to the buyer by the seller. If an item is damaged in the process, then the only exchanged is available no refund is made. All payments must be done by PayPal account (Jang, 2012). All the items can cancel but before delivery, once the items are processed no cancellation is offered.
The key factor which is likely to affect the organizational buying from Zoro Stationery Limited is:
External environmental factors
The external environmental factor aspect affects all most every aspect of business. It also includes buying decisions. The money markets show fluctuations. There interest rates also have a major impact on the buying strategies (Jang,2012). If there is an increase in interest rate than it buying will be reduced by Zoro stationery limited. The changes in the law of corporate will also affect the buying from Zoro Stationery limited. The regulatory changes which are related to the stationery industry can affect the Zoro stationery limited.
Political environment
Any change in the government policy will affect directly to the organizational buying patterns (Carrington,2010).
Social environment
Society and culture are ever changing. Each organization has to change in order to meet up the changes in the society. For example, there is an increase in a number of the customer using a colored pen than the stationary store has to increase the production of stationary.
Competition
In today’s world, one has to stand oddly to get success. So if the competitor of Zoro stationary comes with the new product, then it also has to come out with a different product. So it is necessary for Zoro stationary to follow the trends (Carrington, 2010).
There is also another factor which affects the buying pattern; they are organization’s mission, its structure, its policies and procedures, technology level, and human resource skills.
Zain’s line manager bust has assisted him in reducing potential risk by the following strategy:
It should offer in-house training to sell the product to the most important customer. The focus should be on the job training which can cover the critical needs of the employer. The needed information should be provided to the new employee. Preferred methods of the organization should be learning to the Zain as he was new to the field. The detail of customer should be given to him completely (Carrington, 2010). What the customer is buying from the last few years also should be given to him. The details of a variety of product what the company is offering should be given in depth to the Zain. Also, a small test on the name of the product, its description, and its benefit should be taken by line manager to check the knowledge of Zain. Zain should also update with the new product of the company. Thus, in this way potential risk can be avoided enough the staff is new and the customer is important.
Both organizations as well as consumer buying need to buy products to meet their daily requirements. There are several differences between organisational buying and consumer buying, where organizations buy the products to meet their organisational objectives. These objectives can be cost reduction, meeting employee needs, profit maximization etc. Most of the purchases made by an organization plan in advance where it is an impulse in consumer buying (Bunn et al. 2001). Organizations are more rational during their purchase, wherein the individual buying process it is more spontaneous and to their own satisfaction. For example an organization will plan the employee lunch, they will choose the menu and then order it while in the consumer’s decision, it will be decided just minutes ago about where to go for a lunch break.
And from the previous experiences of Zain he never had confronted the organizational buying, but he was more into selling products to the clients directly and thus he was surprised when at his first meeting. There are a number of people involved in purchasing of product and there will be a wide range of influence in decision making in the organizational buying, wherein the consumer buying the extent of participation from people will be very less (Cova and Elliott, 2008). The Car manufacturer is a formal type of organizational buying which can be stationery requirements established by the organization, where it will be more informal in the case of consumer buying. As there were four buyers buying stationery for various divisions within the company, volume of buying differs in organizational buying and consumer buying which might have surprised Zain during the meeting.
If we try to see it from a literature point of view, then the whole team making the decisions and negotiation of products is known as the decision making unit. There are in total six roles in the decision making process, namely, Users are the people who are actually going to work with the purchased products and will influence on the specifications (Hilton and Jones, 2010). The next comes is the influences which exert influence on the purchasing process by laying down the preconditions and these people are found at every level of the organization. The next will be the buyer who will actually negotiate with the suppliers and places the order and they play one of the great roles in the decision making unit. Initiators are the people who recognize the problem and bring the solution for it.
Deciders are the people who choose the suppliers and due to that they take up a great position in the decision making unit. The last comes on board will be the gatekeepers who are responsible for information provided to the decision making unit and thus by providing the appropriate information this person can influence the decision making strongly. For example Toyota Motor Corporation’s structure is based on various operations around the world. Toyota has a divisional organizational structure which went to change because they had a strong centralized global hierarchy, where all the decision were taken from the HQ in Japan and the individual business units do not communicate with each other (Sen et al. 2008). This organizational structure comprised of chairman, President and Executive vice president in charge of Human resource majorly. This structure of decision making was criticized for slow decision making and three outside board of directors was added to the decision making panel to reflect their opinion in management’s decision making. These boards of member advice the management in decision making on the basis of their experiences and expertise. Thus, Toyota has built a very diverse structure with the right person for the right position.
There is a difference between selling to an organizational DMU and Zain never had an experience as such. Zain confronted consumers/public where there is a simple language used to reach a consumer while in organizational selling the organization can make use of jargon. Zain majorly confronted people where their choices are emotionally triggered while in organizational selling they seek for efficiency and expertise. The consumer buying which Zain had an experience, the customers there are happy with their purchase and it is individual relation wherein an organization it a team that needs to be look upon and making them thankful for their excellent decision (Fawzy and Samra, 2008).
Zain was surprised at the first meeting because there was sales and marketing team to cater the organization while a media advertisement or a recommendation from a friend can work in consumer buying. Lengthy contents works for organizational selling as they need to prove their worth and reason for the organization to buy from them, while consumers prefers it to be short and lower priced as far as their needs are fulfilled. Zain would or would not have thought of building a close relationship with the consumer while selling the products to them, but in case of organizational selling it is must to build a strong relationship and following the brand to generate more profit. There is a long chain of approving purchases in an organization which Zain was confused with while in an individual buying the person makes his/her own speedy purchase decision with a little recommendation or suggestions from other.
Buying behavior has a lot many factors that need to be analysed accordingly and helps to understand the concept of purchase and decision making by consumers. Initial perception matters when a buyer is well known about the product or has a satisfactory result for the products. There are some changes that need to be addressed and an organization need to achieve those targets accordingly. This states that initial perception is the main period that the customer thinks about the purchase and examines the features of the product. The case study here reveals a different truth with some statements that need to be analysed by the company and make sure that the customers are satisfied with the products and the service they get as a long term decision making process (Bagherzad et al. 2011).
Surprising stimuli are seen over and there are perceptions that need to be categorized with the instinct and the knowledge of the product that is gaining accordingly. There is some cumulative impact that needs to be altered and examined with the purchasing behavior.
In second week when Zain had a visit to the customer of Zoro stationery in an educational unit. The appointments were previously fixed and Zain visited to introspect about the customers who made a difference with the expectations. The stationery and office equipment buyers had many years of experience, so they expected a good understanding that revealed the situation of the company. This seems that the company had a larger view regarding the sales personnel who used to come over to visit them and know their expectations (Khan, 2012). The customer had actually a very high expectation, therefore he had an urge to ask about the product of the company where he could verify the difference in approach and the new features of the new product by Zoro stationery. The customer then questioned Zain about the products and the office document shredders, the customer had a large requirement of the product so it was obvious at this stage to question. At the same time, there was a silence that murmured between them about lack of knowledge of the product, Zain had no idea about the product and the features as he was new to the position of Account manager.
There arises the conflicts and misunderstanding about the product’s initial perception. Consumer behavior is affected when a seller is not aware about the product and its uses. The detailed training was actually not received by Zain and this made, the situation is more cohesive. Initially, it is important for a seller or any personnel of the organization to be aware about the products and about its features, this is an initial perception that a consumer expects from a seller (Hassan, Hassan and Mabekoje, 2008). There lacks a purchasing advice by the seller and it does not any more motivate the consumer to purchase a product with the best quality, because as such customer service and customer behavior is an important matter that reflects the purchase decision.
An experience matters when buyers are sure about the product and are satisfied about what the product offers them with the maximum satisfaction level at the best price. What matters even is the interpersonal skills and the interactions among the buyer and a seller. When there is an idea of selling, a seller needs to demonstrate about the product and should satisfy the customers according to the need of the customer (Chiou and Dronge, 2006).
The relationship between the buyer and seller determines with an interaction and a communication level. This is true when a seller meets the demand of the buyer and interacts accordingly. It majorly replicates the service that he gets from the seller and the product specifications that are utmost necessary for consumer buying behavior.
Zoro has been providing a renowned designer and manufacturer Cranes with the stationery products and equipments required by the company since last many years. Also Crane is the huge contributor for Zoro as it brought immense business for Zoro being in the list of one of the four major business clients of Zoro. It has been witnessed that this company is a very special and important client for the company which needs to be handled with delicacy and effectiveness (Wang et al. 2012).
Zain is new to the stationery company Zoro. Although Zain did go through intense training sessions for understanding the working culture and clients of the company, still Zain lacked me getting the training with dealing with the huge clients of the company. Zain would have understood the details regarding the clients of the company. Zain could have adopted a proper framework to understand, analyze and identify the needs and requirements of the clients and promoting its new products to the clients (Wixom and Watson, 2001). It has been witnessed that the purchasing manager of Crane has never got informed about the new products in the catalogue of Zoro personally. The purchasing manager had no idea about the new high quality toner cartridges which were introduced by the company to the clients. Without having some detailed knowledge about the products it is neither appropriate for the seller to recommend the product to the purchaser nor is it possible for the purchaser to buy the products without detailed information regarding the product (Bronner and Hoog, 2010).
Zain must have used appropriate framework or methodology for introducing the new High quality toners to the purchase manager with a complete presentation which emphasized on the detailing of the product (Vries et al. 2012). First of all Zain must have taken a step to identify the methods and ways the company introduces the new products to the clients. Then Zain could have developed a presentation regarding the benefits and features of the products and highlighting the need and significance of the product for the client’s company. Then Zain could have sent a mail or appointment request to the purchase manager informing him to showcase some beneficial product, in this case the High Quality Toner Cartridge (Bronner and Hoog, 2010). Once the purchase manager responded back Zain would have conducted a meeting where he could explain the significance of the product to the purchase manager. This way Zain could be more confident about the product and give enough information to the manager while the manager would get easily convinced by understanding the need, importance and usefulness of the product for his company (Wang et al. 2012).
It has been witnessed that Crane is a regular customer of Zoro. Thus, it is a very important client of the company (Esposito et al. 2010). For such long term and highly profitable customers, the company should have different strategies to increase and develop the business relations with the clients. To develop better relationships with the clients and sustain healthy relationships, Zoro must develop some extra strategies and methods to bring more business from the client (Liang and Turban, 2011). In this case, Zoro can use the transactional data to improve the business with Crane and can utilize the data to identify the business pattern of the company. The transactional data has a high importance for any company and thus the companies focus on maintaining and analyzing this data constantly for identifying the changes and pattern of the company’s business methodology (Bronner and Hoog, 2010).
The transactional data emphasize on various aspects such as the financial information of the company, the product list the company purchases, the budget of the company for stationery expenses, the frequency of business with the company, etc. This would give huge information and would help the company to develop the strategies for expanding its business with the company (Vries et al. 2012).
For selling the High Quality Toner Cartridge for Crane, the company must first analyse the product details. The details like the need and requirement of the product, its efficiency, its prices, the quantity needed, etc. Also the transactional data of the company like the number of products crane purchases from Zoro, the prices it spends, the products it requires etc (Liang and Turban, 2011). By analysing these details a comparison should be made that does the requirement of Crane could get satisfied with the new product launched by Zoro? Can the company sell the product to Crane in the desired and placed costs and prices? What would be the quantity of the products that would be required by the company? Answers to this question can be obtained while analyzing the transactional data (Chwelos et al. 2001). By the proper analysis of this data, a strategy can develop and can be represented in the company in a convincing manner to Crane due to which the company would get interested in dealing with the company. The Proper presentation with some aspects in favor with both the companies would help in getting the company convinced and having a successful business relation with each other (Chen et al. 2011).
Acquisition of a new customer is far more costly than retaining the existing customer. A major portion of the income is derived from the existing customers. Statistics ponder that maintaining organization must work on customer satisfaction and customer loyally along with an increase in sales and other marketing strategies (ZikienÄ—, 2010). Customer loyalty is an ongoing process to develop an emotional bonding between customers and the organization. It facilitates in retaining the existing customer base and attracts new customers.A variety of factors affect the customer loyalty such as monopoly product, good after sale services, cost of the product, psychological attachment, satisfaction with the product.
Retention of customer is utmost important for any business to survive. Good quality products and on time service are the major factors for building trust and loyalty in customers. An incentive offer or bonus refers to the existing customers shall make them happy and loyal to the business. However a regular meeting to reach up to their expectations, do more business and acquire more customers would be beneficial for an organization (Yim et al. 2008). Customer loyalty retains with the organization and also generate a regular major income portion for the organization. Repeat business is a win-win situation for the organization.
Improving customer relationship develops a brand name. It enhances the brand value. Apple is a far-fetched example of customer loyalty. True advocates of the product inspire confidence in others. “If they love it, so will I.” Hence develops sales and business success.
A balance of retaining existing customers and attracting new ones is must. Customer loyalty is all about building relations and engagement. The more you exhibit positive connections the more loyal your customers become (ZikienÄ—, 2010). It’s our responsibility to treat them well as they decide about our business, whether to come back to us or recommend us.
The power of mouth publicity is quite instrumental in spreading the word and making brand ambassadors. A positive experience leads to more referrals. It influences for the repeat business. Also explore new range of products offered by us. Amway products are a live example for it.
Such factors affect the organizational buying as it includes trained professionals in the decision making. They are influenced by numerous environmental and organizational factors. Individual relationship and positive engagement, create long term benefits for both the parties.
Hence Zain Sadiq should consider the above said factors for developing the customer loyalty as the leading motorbike company is an organizational buyer over ten years and retention of the existing customer is far better than acquiring new customers.
An advise to Zain is to develop long-term customer relationships by being honest and best with its quality of the product. The key to success is building engagements beyond one-time projects and then maintain these valuable clients on consistent and on-going basis.There is no such thing as over-communication. So Zian should keep his customers informed on a regular basis about all the goods and services he can provide (Yim et al. 2008). Make the key customers his top priority and add value to their business. Support them in every possible way to entrust their faith in the belief in our organization.
Always being resourceful is an added feather. The more value we provide, more they become dependent on us (Yim et al. 2008). So Zain can share information from time to time and also refrain from unnecessary offers which won’t interest them (Madhurima, 2014). Honesty builds trust and loyalty. So being honest in the dealings would result in long term relationships and hence it would build a reputation of integrity. So being honest in all the business matters is a most important feature to cultivate.
Meeting the deadlines is ground principle for any business to survive. Committing to a deadline means a relief from the worry for clients for its needs and requirements. Therefore, break from worry boosts confidence in clients to rely on us rather than seeing alternatives.
The loyal customers should be kept happy for ensuring on-going relationship. Zain can also offer preferential benefits to its loyal customers and honor them for their trust in him. Rewards such as individual or business exclusive discounts, special varied products only for them, rewards programs, etc can be initiated to maintain the existing customers (Lee et al. 2009). Maintaining quality standards and providing best services is the key to any business to survive. Improving brand image, being eminent amongst competitors, reducing market cost an also benefit Zian to develop long-term engagements and also have a strong relationship.
Providing high quality toner cartridges at a convenient cost would enhance its sales. After sale services of cleaning, re-filling the ink cartridges, benefitting them with the cost of such toner compared to other suppliers, offering special discounts for bulk purchase, rewarding for their loyalty of giving business since last ten years, aiding with innovative products to support the client’s business would definitely help Zian to develop a strong customer base and also retain it.
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