Consumer Purchasing Process Introduction Business undertaking involve buying and selling of products and services. Both buying and selling involves activities performed by a buyer to acquire materials. According to Monczka et al (2010), these activities vary with the organizations involved, size of the purchase, importance of the purchase, time available, quality demands, and nature of the purchase…
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The activities involved in the process include identifying and evaluating vendors, selecting specific products, placing orders, and resolving arising issues (Schneider, 2010). All these activities facilitate the acquisition process from either the supplier or producer. The purchasing process takes six steps which are need recognition; supplier identification and selection; contract negotiation; purchase order placement; purchase order follow-up; and order receipt and fulfillment (Li, 2007). Each of these steps involves several purchasing activities. In the first step of the purchasing process, a company identifies a need for a certain material. The step involves purchasing activities like identification of materials and their delivery time. It also involves quality, quantity, and attributes identification. The second step goes on to identify specific sellers or distributers for the materials identified in the first step. This step involves purchasing activities like price trend analysis, supplier availability analysis, and market conditions analysis (Li, 2007). The third step involves negotiation of the terms and conditions of the purchase process thus opening sale. Upon agreement on the terms and conditions, a purchase order is placed. ...
In the six steps, the purchaser receives the order and verifies both quality and quantity supplied. It is in this step where the sale is closed and the company gets ownership of the purchased materials. In most situations, purchasing process involves interaction between the purchasing personnel of a company and key account managers of the supplying company. The account managers should have skills like planning and marketing, relationship building, problem solving, negotiating, opportunity creating, organization, communication, and presenting skills (Cheverton, 1999). In some situations, the suppliers use global accounts management instead of key accounts management. These situations require the vendor company to be global and coordinated. Competences required for personnel in global accounts management is identical to the ones required in key account management. The reason for this is the similarity in the activities undertaken in each of the cases. Analysis Purchasing process involves the purchasing company and the selling company. These companies have conflicting interests. Each of them tries to maximize benefits derived from a purchase while minimizing both risks and costs. Negotiations are always required in order to achieve these objectives. This indicates that the persons selected to represent a company in a purchasing process should have good negotiation skills. Negotiation skills are in line with communication skills and therefore, these persons need to have good communication skills as well. If persons representing a company lack negotiation skills, the other company may take advantage of the weakness in the purchasing process. Due to this, the weaker company may make loses while the other company
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