Applying the Buying Center Concept- Selecting New Laptops for Hewlett Packard (HP) 

Applying the Buying Center Concept- Selecting New Laptops for Hewlett Packard (HP) 

Company Description          

Hewlett Packard (HP) is a multinational information technology corporation headquartered in Palo Alto, California, United States. The corporation provides technologies, products, software, solutions, and services. It also serves individual consumers, government institutions, the health sector, and education institutions. HP led PC manufacturing until 2012, when the China-based Lenovo overtook them. The company’s product line includes personal computing devices, networking devices, storage devices, imaging machinery such as printers, and industry-standard servers, among other products and services. HP sells its products directly to households and small to medium-sized enterprises through retailer suppliers, technology vendors, and software business partners. The company provides reliable after-sale services, such as consulting services for its products and those belonging to partner businesses. Although the company makes computers, it needs a stable supplier base of personal computers to be used by its employees.

The Roles in a Buying Centre

The buying center is the purchasing unit of any organization. It comprises all the people and teams that participate in the entire buying process (Karunarathne, 2019). The people who make the purchasing decision in an organization are employees from different departments that play a role in the process, regardless of its significance. They include the users of the products or services, those who decide purchases, those who influence a purchasing decision, those who implement the buying decision, and controllers of purchasing information. The mentioned members share common objectives and the risks that may arise from the buying decision. The people who make the buying decision-making unit of the organization perform different functions besides interacting among themselves. Members can act as salespeople and suppliers simultaneously, depending on their role in the organization.

The initiator of the buying process is the individual or unit that suggests a product or service that the firm requires. Under normal circumstances, the need for the use of a product or service begins with users. However, in some cases, the top-level management or the engineering department feels the need for a given product or service (Kotler& Keller, 2016). If these individuals initiate the purchasing process, then they are referred to as the initiators.

Secondly, users also play a crucial role in the purchasing process. This group of organizational members plays a vital role in the purchasing process, especially in the research and development (R & R&D) or engineering teams (Kotler& Keller, 2016). As stated earlier, users can also be initiators of the buying decision. The work done by users is directly affected by the purchasing decision, and they can range from top executives down to trainees. Users’ needs depend on what they can use to perform their duties. They are less concerned about the cost and are keen on the required products’ functionality, reliability, and portability.

There are also influencers who shape the buying decision. Influencers aid the process by providing helpful information to those who make the buying decision (Kotler& Keller, 2016). Good examples of influencers include legal minds and technical people who provide helpful expertise consultancy about a product. Influencers advise the firm on what is good but have no direct impact on the purchasing decision. Influencers also develop specifications of the available offers and analyze them against alternate offers to choose the best option (Harvard Business Review, 1982). Influencers can be beneficial when products include a new technology with which most of the firm’s employees are familiar.

On the other hand, deciders decide on product requirements or the suppliers the firm will engage. In some cases, buyers are also the deciders, but the two parties exist separately in most cases. Deciders make the conclusive decision on the purchasing process (Kotler& Keller, 2016). For instance, an engineer’s technical expertise gives them an upper hand as the final decision maker on who can supply raw materials for a project. Purchase executives act as deciders for general merchandise, but high-level managers work as the deciders when it comes to high-value products.

Furthermore, buyers also play a role in a buying center. Their functions include selecting suitable suppliers and negotiating the terms of a purchasing process (Karunarathne, 2019). Buyers may also shape the specifications of products to be bought by engaging suppliers in a negotiation process. They also receive quotes, evaluate them, issue purchase orders, and track orders. Although most of these functions are now automated to save time and purchase costs, buyers still play a crucial role in a firm’s buying center.

Approvers, on the other hand, authorize the decisions of buyers and deciders. Approvers may include top-level managers, the finance department, or users. Once a proposed purchase is approved, then the buying process is as good as concluded.

Finally, gatekeepers act as an information link between the firm and suppliers. They can be salespersons or purchasing agents (Karunarathne, 2019). By contacting suppliers directly to ask for quotes, they effectively control information that comes into the firm.

At HP Company, employees work either in the office or remotely; hence, almost every member is a user, and they need a laptop for their day-to-day activities. On the other hand, influencers who aid the buying process can be the company’s top-level performers in all departments. Besides, low-level managers from IT and product design departments can also be part of influencers. Further, buyers in the firm are the finance and procurement teams since they approve the budget and the transactions for laptop purchases. Executives and senior-level managers at HP Company play the role of deciders. Finally, gatekeepers may include receptionists and salespeople. They are the most visible employees of the company, and they form a perfect link with users, deciders, and managers; hence suppliers can use them to solicit orders.

Differences between Organizational and Consumer Markets

Individuals and organizations buy products and services to satisfy their day-to-day needs, but they differ on how they purchase. One of the differences is that individuals purchase the goods for personal use, while organizations buy to produce final goods, which they later resell. Therefore, organizations’ purchasing decisions are driven by demand for their products, while a need/want drive individual buying decisions. The two also differ in quantity purchased, as organizations buy in bulk while individuals buy in small amounts.

Conclusion

In summary, every buying enterprise has a buying center. The buying center consists of the people who give their input before the final buying decision occurs. The buying center has a set of organizational members with shared goals. They are also vulnerable to consequences that may result from a buying decision. One of the critical objectives of the buying center includes ensuring the organization buys the right quality products. The unit also seeks to ensure that goods are purchased at the best market price, with an underlying objective to cut costs.

References

Harvard Business Review. (1982, May 1). Who Really Does the Buying? Harvard Business Review. https://hbr.org/1982/05/who-really-does-the-buying

Karunarathne, H. L. P. (2019). Buying Centre Members’ Information Control in Complex             Organisational Buying.

Kotler, P., & Keller, K. L. (2016). A framework for marketing management (p. 352). Boston,       MA: Pearson.

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Apply the buying center concept to a firm, a nonprofit organization, or a government agency you work for or are familiar with for the purchase of new laptop computers for their employees.

Begin by briefly summarizing your selected organization. What is it? What does it do?

Applying the Buying Center Concept- Selecting New Laptops for Hewlett Packard (HP)

List the different roles in a buying center and analyze who (from your selected firm, nonprofit organization, or government agency) would occupy the different roles of the buying center.

Justify the reason for selecting these job titles or departments for the various roles in the buying center. Which members of the buying center should the salesperson focus on when selling to your firm? Why? Explain how the buying process differs between organizations and consumers as it would be applied to the organization you have selected.