This assignment shows the influence of internet on organizational buyer behavior.
Introduction start with general definition about marketing, and then a will talk about the difference between consumer buyer behavior and organizational buyer behavior by comparing six points which are: meaning, buying decision-making, steps in the decision process, product knowledge, purchasing goals and buyers-suppliers contact. And then this paper will talk about organizational buyer behavior and the factors which are influence organizational buyer behavior, external factors and internal factors External (environmental) factors: Regulatory and laws Changes, – Economic circumstances and interest rate, Social Environment, Political and Competition. Internal factors (organizational) factors: Policies and Procedures in the organization, Organization’s Goals and Objectives, Technology, Manpower influence and Organizational Structure. Secondly the literature reviews:
In this part of assignment this paper will discuss how technology which is internal factor (organizational) effect organizational buyer behavior and we will talk especially about internet and the effect of the internet on organizational buyer behavior. In the literature review there are the following topics:
1- The relationship between internet and business: how the technological revolution improve business and organizations and how it’s influence positively in business world 2- internet: in this part we will talk theoretically about the internet and the internet’s history. The real begging of the internet was in 1992 with the famous (WWW) which is referred to World Wide Web. And it was created at European Laboratory for practical physics (CERN). And we will show the opinions of researches in internet and its effect (the space of internet was too large although there are a lot of people reject the internet in the begging. But the commercial activities invest the internet at the end and internet enters to the business world finally (John R. Hewitt, 1998) and other opinion from researches.
Thirdly Case study about (Liberduplex S.A) Company:
1- Overview about (Liberduplex S.A) Company: Liberduplex is a Spanish company specializes in Graphic Arts. Basic functions for this company are: Library Binding & Edition Binding (hard and soft cover) and Offset printing (newspapers and books). This company still working from fifteen years, and its activities cover all Catalonia and around Catalonia and its provide her customer with high quality products within keep in touch with customers. This company proud in its high technology which can serve their old tradesman quality, the basic goal of this company is to supply many choices of print management and printed materials. With using high efficiently means and economically, in the same time keep providing market with high quality. 2- Information about purchasing area: The total purchases of this company for last year were 733, 205, 65 €. This result had been achieved with just three persons was working in the buying center, dividing the purchasing type as: New task purchases 9%
Straight re-buy purchases 58%
Modified re-buy purchases 33%
3- Internet use in liberduplex S.A.: The real using of internet in this company started in 1996 with primary objectives which were: e-banking e-mail
And its show the use of internet in the company
4-product studied: comparing between Produce a product+ low using of internet and Produce a product+ high using of internet
5-buying process: tables show the steps of buying process
6-Buying center: In the buying center we can take information about people involved in buying process with their grade of involvement: 7- Factors affecting buying process: tables shows the most factors affecting buying process Fourth conclusion
How technology has direct affect in the organizational buyer behavior (B2B), and it can help organization in many purposes.
Table of Contents
S. No.| Name of the Topic| Page No.|
1| Introduction| 6|
2| Literature Review| 10|
| internet| 11|
3| Case study| 13|
| overview about the company| 13|
| Information about purchasing area| 14|
| Internet use in the company| 15|
| Product studied| 16|
| Buying process| 16|
| buying center| 18|
| factors affecting buying process| 19|
4| Conclusion | 20|
5| recommendations| 22|
6| references | 22|
“Marketing is human activity directed a satisfying needs and wants through exchange processes” (Kotler, 2000) The interested of understanding the organizational buying process have been increasing recently because the high competition between the big companies in the market and between the businessmen. Since 1980’s many things have been changed on this competition such as: Increase in outsourcing, importance given to developing partnerships with suppliers and growth of power which is Characterized purchase departments. The way of take decision on the organizations used to be similar to the consumer’s way, but in practical life there is a big difference between the consumer behavior and organization behavior.
Organizational buyer behavior:
The actions of employee by an organization to buy products or services for the business, And the more objectives and rationale is Buying behavior.
And who do Organizational buying are people work for organizations with a formal chain of command and assigned responsibilities for their employers. 3-Steps in the decision process:
Identifying the need, identifying suppliers, deciding product characteristics, do researches about suppliers, negotiating with suppliers and evaluating performance of suppliers.
Organizational buyers have more knowledge about the product because of their job experience and training.
Industrial buyers work and buy for the organizations, the personal and organizational goals have balanced role in organizational buying, from the time where People are doing the buying in organizations.
The less number of organizational buyers help the industrial seller to keep in touch with them, and the Direct selling to these buyers it will be possible. (http://www.scribd.com/)
Consumer Buying Behavior:
The interested in marketing have did many studies about consumer behavior including the impact of everything in the consumer behavior like how people consume product and how they behave. The main constructs accepted nowadays in the study of consumer buyer behavior.
The feedback of individual consumers when they are purchasing goods and services or their satisfaction When we talk about buying behavior we talk about emotions more than rational.
Most of households include more than one person and each person has an opinion in many consumer buying decisions.
3-Steps in the decision process:
Identify need, deciding participation level, identifying available
alternatives, take the buying decision and after purchase behavior.
The individual consumer has a little product knowledge.
The personal goals are very important to consumers when they are taking a decision what to buy, because consumers buy for their own use. 6-Buyers-suppliers contact:
Individual consumers are not close to suppliers and they are not contact directly with them. It is also possible the direct selling. (http://www.scribd.com/)
If we are talking about B to B organizations, and if we want to know how to develop the marketing plans and sales strategies for these organizations, we should identify the factors which can influence organizational buyer decision.
External factors (environmental):
1-Regulatory and laws Changes:
The changes which can happened in the corporate laws, rules and regulatory will affect in the organizational decision making.
2- Economic circumstances and interest rate:
The changes in the interest rates and money markets have a basic impact on the buying strategies. Because there is an inverse relation between the interest rates and organizational buying, usually an increase in the interest rates could lead a drop in the buying.
Cultures and societies are always development and change, and all business will change in his procedures and practices to meet up with this development and change.
Governmental changes and political will effect in the economic, and that could make some organization buying changing in the behavior of this organization.
Nowadays the most important thing in the business is being competition and staying ahead. Because of that when the competitors of the organization produce a new product or service; this organization will change its trends and its policy and procedures. (http://www.brighthub.com/)
Internal Factors (organizational):
In fact the internal factors also influence in the organizational buyer behavior and that factors are: 1-Policies and Procedures in the organization:
The way of purchase order depends on the organization’s policies and procedures and also how this procedures begin and where its end. The policies and procedures identify the people who they have the power to decide in the organization. For example some organization does the public bids, where other organization works with limit supplier. And others take their decision depending on their budgetary. 2-Organization’s Goals and Objectives:
Goals and objectives of an organization are specific the way of purchasing in the organization .the organization which wants to be always in the market and sell high quantity with low price, it will look on supplier who can provide this organization every time. In another hand the company whose goals to supply high quality in the market will have very contrasting buying pattern.
When producing a new product, organizations take care of current technology. Some purchases influence in the level of technology at the time of producing the new product so some of them aim to replace current technology with a newer version, and most organizations always try to purchase the recent technological material from the supplier. And that is the only way to affect in future business.
The organization should have a skilled manpower who they know how to use the equipment and machinery. This also influences the organizational buyer behavior.
The Hierarchical and management structures different from one organization to another, some organizations have a high performance purchase department; others assign this job to the human resources or Administration department. There are also some organizations where the purchase decisions must be taken from more than one department it even can from all departments. The organizations also have clear guidelines to which purchase decisions can be made by which management level. The internal roles and how decision maker and responsibility flow through it, play an important role in the organizational purchasing. (http://www.brighthub.com/)
In this paper we will discuss how technology which is internal factor (organizational) effect organizational buyer behavior and we will talk especially about internet and the effect of the internet on organizational buyer behavior. The relationship between internet and business:
As what all people say about this time, the technology transfers the world into small village. Nowadays, the most Beneficiary of the technological revolution is in the businesses and the organizations, because its basic reason for organizations to improve their business and the strategy of their work. The internet can be the most suited service for technology to effect organizational buyer behavior because internet direct effect on the company work , first we will see the important of internet, and then we will take an example of a company and how internet improve the performance of this company.
The real begging of the internet was in 1992 with the famous (WWW) which is referred to World Wide Web. And it was created at European Laboratory for practical physics (CERN) The space of internet was too large although there are a lot of people reject the internet in the begging. But the commercial activities invest the internet at the end and internet enters to the business world finally (John R. Hewitt, 1998), and first time people can use the website completely was in 1993. And the most type to use the internet is World Wide Web What attractive people in WWW that WWW can show you the data in a multimedia type. Thus, Internet becomes a creative talent (Hoven/Weckert, 2008) also; the user can use the hypertext links that can help him move to data that can be useful for him, It’s also include most internet services like e-mail, shift Files and show you a lists of your electronic messages because of that web attract a lot people more than non-web functions (James C. Gonyea, 1996).
For give a fair evaluate about the influence of e-commerce on b2b, it is very important to understand the literature of buyer behavior, which become important with end of 1960’s (Judy Strauss, 1999). (Patrick J. Robinson, 1967), the interested about organizational buyer behavior analyze and explain everything about it. The people who studied this in this field tried to explain the influence of data on buying process. (Thomas R. Duncan, 1997) Put the principles of this influence by studying the relation between understanding the technology, exchange and communication. Previous work from (David D. Chrislip, 1994) shows the high relation between business performance and information.
When this job done Compatible with e-commerce. People will ask about the influence of WWW on communications, and the relation between improving performance and increasing communications sparks, and how developing communications lead to improving performance. But others speak about the counter arguments to WWW influence on performance. ( (Stefan H.K. Wuyts, 2010)) describe that the performance will be influenced just in situation where there are a lot of information for many organizations.
That’s mean WWW could be a game with 0 result. On the other hand, others (Gerrit Harm van Bruggen, 2010)) say: displaying information (especially useful information) lead to positive result by gives overall efficiency, making all helping in growth of world we can note that there are many opinion about how information influence business. The nature of industrial purchase will also reduce informational impact with (Thomas R. Duncan, Driving brand value: using integrated marketing to manage profitable stakeholder relationships, 1997)suggesting that mostly transactional purchases will affected positively by technology established from information improvements.
Especially, the system of interchange electronic information has triple direct influence on the performance: 1- greater truth of data interchanges 2- give complete information about the transaction 3- faster transferring. If the companies want to maintain a presence in the market with this electronic business world, they should work with suppliers. Mix new systems with participate in public and private exchanges also. many researches discuss the effect of Web and how it can make competitive advantage of level economies in many industries and it will be easier for small marketers to participate in the worldwide with same level as their larger organizations (Syed M. Rahman, 2000) day by day Internet become basic part of the organizations network computing environment, a basic way to distribute of goods and services.
However companies still have some mission such as meet wages, produce parts and carry on the parking lot clean. A company still faces these cases with product quality cases. However automation it will get inside it.CRM is a traditional instance, High level managers were ready to invest a large amount in these systems, whereas shortage of financing training and retention for customer gets in touch with the person. There is always a try to turn the tellers into salespeople by banks, for instance by give CRM extra job to do, and not give them motivations and useful training. The internet can be the most suited service for technology because it’s has direct effect on the company.
Case study about (Liberduplex S.A) Company.
Overview about (Liberduplex S.A) Company:
Liberduplex is a Spanish company specializes in Graphic Arts. Basic functions for this company are: Library Binding & Edition Binding (hard and soft cover) and Offset printing (newspapers and books). This company still working from fifteen years, and its activities cover all Catalonia and around Catalonia and its provide her customer with high quality products within keep in touch with customers.
This company proud in its high technology which can serve their old tradesman quality, the basic goal of this company is to supply many choices of print management and printed materials. With using high efficiently means and economically, in the same time keep providing market with high quality. they always try to use in their work water miscible chemicals, but all unhealthy materials like unhealthy chemicals and paper, etc…. collected and get rid of it by give it to contractors specialized in collect materials like that, more than ninety percent of these papers are healthy and friendly for environment.
And that is why environment is a very important factor of operating a modern print house. 3 single color presses and two 2 color presses set in the core press room Oce, Oliver and Heidelberg. There are also other small finishing facilities like guillotines folders and booklet makers useful for the purpose in the other two warehouses and Copy Shops. 64 employees work in this company with 3,161,323 € turnover in 2002. Liberduples S.A.’s short-term objectives are increasing in sales and market shares, Liberduples S.A.’s long-term objective is to own off-set printing guidance in their country. The primary products in production process are according to the importance and percent of sales per year:
Books off-set Printing 53%
Newspaper off-set Printing 22%
Soft-cover binding 14%
Hard-cover binding 9%
Information about purchasing area:
The total purchases of this company for last year were 733, 205, 65 €. This result had been achieved with just three persons was working in the buying center, dividing the purchasing type as: New task purchases 9%
Straight re-buy purchases 58%
Modified re-buy purchases 33%
Internet use in liberduplex S.A.: now we will see the using of internet in liberduplex S.A.
The real using of internet in this company started in 1996 with primary objectives which were: e-banking e-mail low level employee were not allow to use internet, just the high level employee such as administration department, and that is not more than 2% of the employees. Purchasing Manager is the responsible for using the Internet in the purchasing process. How the internet used in the company
Produce a product+ low using of internet:
(Off –set paper)
There is a big value for this product in the operation of the company This product has a high importance in the operations of the company because it is concerned in a many processes. 22 days between order inventory and deliver the order, it has low- medium switching cost. The contact with the supplier is divided as follows:
-Phone 40% – Internet 20%
– Post-mail 10% -Fax 30%
Produce a product+ high using of internet:
This product has a high importance in the operations of the company because it is concerned in a many processes, it is purchased monthly. The contact with the supplier is divided as follows:
-Phone 40% – Internet 40%
– Post-mail 10% -Fax 10%
According to the type of product the steps in buying process
In the buying center we can take information about people involved in buying process with their grade of involvement:
This table show comparing between two products one with low internet use and other with high internet use
Factors affecting buying process:
This table show many factors which can affect buying process
We can note that most affective factors is price, after price we can see that the technical capability and quality also important. In this case the internet is not a selection factor. But from the time of using the internet in this company many suppliers have been changed, because web seeking for other suppliers around Europe, by using e-mail links.
The technology has direct affect in the organizational buyer behavior (B2B), and it can help organization in many purposes. Especially, the internet which some people look for it as most beneficiary result from the technological revolution, internet can be high effective factor inside the organization. And from previous case study I will discuss following points 1-How we will explain the buying process with internet’s affect? In previous case we can see how internet change the way of finding suppliers for the company, and how can internet show all useful information about all other companies and the company can classify the suppliers into groups and give each one a grade and comparing between these suppliers, in fact internet is a basic sources for information.
However, some researcher suggest that internet not changing the steps of buying process, but it’s make the finding information about other companies easier, faster and more flexible with reducing cost because the number of employee will lower. The explain of why step of buying process not change is that internet is not a tool to complete the purchasing process, and internet can help by finding information, but not to do all procedures and complete all process.
2-what is the most important factors influence in buying process after using the internet? Internet can do the first step of finding new supplier, and then the company should do the other traditional steps such as calling supplier, visit him or invite him to come to the company and complete all other procedures. So can see how internet will give the first step which we can call it (selecting). By internet the firm go too far seeking into other companies not just local, but also foreign suppliers, in all around the world, in different area, and her will by the real saving money and reducing cost because the company can take the basic information from Web then travel and meet the supplier, not like past. 3- What is the real influence of internet on b2b market?
Generally technology has direct effect on business to business and especially internet because internet helps businesses to meet. Actually it’s a real exhibition display for you in a small device. It’s all technological levels which is affecting internal (organizational) factor in the organizational buyer behavior. Nowadays, with rapidly developing in the business world internet not just a technological tool, but it’s also a competitive tool. Internet not affecting just in the internal (organizational) but also its effect in the external (environmental) Its play internal role in the company by improving the performance of the company and play external role by increasing the competition between company because it’s also an advertisement tool.
1) Give more interesting to internet and invest this technological tool to business easier and faster. 2) Always keep trying to find new suppliers by seeking in trusty information sources. 3) Motivate employees to use internet and increase their searching skill to find the best offers and invest all opportunities. 4) Hiring experience people in IT who they know how to use the internet better than who normal people do. 5) Always update the information about the company in the company’s website, could also be helpful to meet other business. 6) Keep in-touch with technology and know any development in this failed
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