Stages in the Buying Process

Stages in the Buying Process

Problem Recognition

The buying process begins when someone in the company recognizes a problem or need that can

be met by acquiring a good or service. The recognition can be triggered by internal or external

stimuli. The internal stimulus might be a decision to develop a new product that requires new

equipment and materials, or a machine that breaks down and requires new parts. Or purchased

material turns out to be unsatisfactory and the company searches for another supplier, or lower

prices or better quality. Externally, the buyer may get new ideas at a trade show, see an ad, or receive

a call from a sales representative who offers a better product or a lower price. Business marketers

can stimulate problem recognition by direct mail, telemarketing, and calling on prospects.

General Need Description and Product Specification

Next, the buyer determines the needed item’s general characteristics and required quantity. For

standard items, this is simple. For complex items, the buyer will work with others—engineers,

users—to define characteristics such as reliability, durability, or price. Business marketers can help

by describing how their products meet or even exceed the buyer’s needs.

The buying organization now develops the item’s technical specifications. Often, the company

will assign a product-value-analysis engineering team to the project. Product value analysis (PVA) is

an approach to cost reduction that studies whether components can be redesigned or standardized

or made by cheaper methods of production without adversely impacting product performance. The

PVA team will identify overdesigned components, for instance, that last longer than the product

itself. Tightly written specifications allow the buyer to refuse components that are too expensive or

that fail to meet specified standards. When HP won ISRI’s first Design for Recycling Award through

an application of PVA methods, it received this accolade:

HP has worked for many years to design products that are easier to recycle. The firm

operates several recycling facilities, which allows it to determine the most effective design

features to facilitate product recycling. HP has developed standards that integrate clear

design guidelines and checklists into every product’s design process to assess and improve

recyclability. Hewlett-Packard’s design process includes: Using modular design to allow

components to be removed, upgraded, or replaced; eliminating glues and adhesives by us-

ing, for example, snap-in features; marking plastic parts weighing more than 25g according

to ISO 11469 international standards, to speed up materials identification during recycling;

reducing the number and types of materials used; using single plastic polymers; using recy-

cled plastic; using moulded-in colours and finishes instead of paint, coatings, or plating.34

Suppliers can use product value analysis as a tool for positioning themselves to win an account.

Regardless, it is important to eliminate excessive costs. Mexican cement giant Cemex is famed for

“The Cemex Way,” which uses high-tech methods to squeeze out inefficiencies.35