Question

The organizational buying center varies as a function of size of the company and product
or service being purchased. How does size of the company influence the composition
of the buying center? How might the composition of the buying center differ for
each of the following products?

a. Purchasing a new computer for personal use.
b. Purchasing a new copy machine for the office.
c. Selecting a different public accounting firm.
d. Selecting a new textbook for a sales management course.
e. Choosing a different source for industrial oils and lubricants.
f. Purchasing a new machine.
g. Choosing a marketing research firm.

Answer 1

The size of the firm influences the composition of the buying center i.e. the larger the size of the firm, the varied will be the composition of the buying center. The composition of the buying center will be varying with the size of the organization. In large organizations, the company will have a permanent department to act as the buying center where as, in smaller organizations, the company will employ specific people like purchase managers or procurement managers to act as the buying center.

a) Purchasing a new computer for personal use: In this situation, the buying center will be the person who wants to use the computer only. This is because the purpose of the computer is personal and the company will not have any say in it.

b) Purchasing a new copy machine for the office: The purchase of a new copy machine is for making copies of the official papers. This will be used for official purposes only. Hence, the buying center will be the procurement manager along with the inputs from the clerk who will be handling the machine to make copies of the documents.

c) Selecting a different public accounting firm: The selection of a new public accounting firm is a major decision. It requires the consent and approval of all the top management as well as the board of directors. So, the buying center for this purchase is the procurement manager along with the top management’s approval.

d) Selecting a new textbook for a sales management course: This is a personal decision. If a manager wants to purchase a new sales management textbook then he/she can choose it for himself or can take the suggestion of the teacher who is teaching the sales management course. Final decision will be of the person who will be reading the book.

e) Choosing a different source for industrial oils and lubricants: The decision to purchase a different source of industrial oils and lubricant can be done by the management of the firm. Such a decision needs to be discussed in meetings and only after the manufacturing and the purchase department give their consent to the decision, can the decision be implemented. Thus, the buying center will be the production manager as well as the purchase manager.

f) Purchasing a new machine: Similar to the purchase of different source of industrial oils and lubricants, here also the buying center will be the production manager and the purchase manager.

g) Choosing a marketing research firm: Market research firm’s decision will be the decision of the marketing team represented by the marketing manager after the approval of the top management.