What does the proposal solicitation stage of the business buying process involve?

The business buying process is quite different from the consumer buying process. Because in this case the business market is involved in a different set of characteristics and demands. The companies doing business in business markets adopt separate marketing strategies.

There are a few basic concepts that should be discussed. Before going into detail about the business buying process.

Business Market

All the businesses that purchase goods or services. Particularly to modify them for the purpose of reselling are collectively called the business market. Business markets have derived demand that basically originates from consumer demand.

Buying Situation in Business Markets

The following are the three types of business buying situations:

• Straight Re-buy

In this situation, the previous routine order is made by one business without any modifications.

• Modified Re-buy

In this case, a certain business wants to modify its order in respect of specification of the product. Along with its price or terms, etc. Hence this requires more participants in the decision-making process.

• New Task

When a business buys a specific product or service for the first time. Then this case is called new task buying.

Participants of Business Buying Process

The following are the five participants that may be involved in the Business Buying Process:

• Gatekeepers
• Deciders
• Buyers
• Influencers
• Users

Steps of Business Buying Process

The business buying process is split into eight stages. So the new task buying contains all of these steps. Whereas the straight or modified re-buy may skip some of them. These stages are as follows:

• Problem Recognition
• Description of General Need
• Specification of Product
• Search of Supplier
• Proposal Solicitation
• Selection of Supplier
• Order-Routine Specification
• Performance Review

Problem Recognition

In the first stage of the business buying process. A certain problem is recognized by someone in the organization. So that it can be solved through the purchase of any new product or service. Therefore the external or internal stimuli result in the creation of such a recognized problem.

In the case of internal stimuli. The management of the organization may determine to manufacture a new product. Nor any production machine becomes damaged that needs certain new parts. Another internal reason may be that the supplier is not providing effective goods at a fair price.

On the other hand, the external elements may be in the form of any new idea of a product. Even at a trade show or seeing new advertisements. Nor any favorable offering by a salesperson, etc.

Description of General Need

This stage starts when a clear need has been identified by the organization. In this step description about the general need has been prepared. That shows general characteristics and the quantity of the required product.

In the case of simple items, this process is linear. Whereas in the case of complex items in the process involves. A team of buyers, engineers, and other professionals. Basically who work together to agree on the desired product. The significance of reliability, price, durability, and other features are ranked. In fact for the desired product or service by the team.

Specification of the Product

In this stage, the organization that is involved in the business buying process. Actually prepares a detailed list of the technical specifications of the desired product. Through value analysis conducted by the engineering team.

In value analysis, careful studies are made to determine the cost reduction production process. Particularly for the redesigning or standardization of the desired product or service. So the professional team covers the best features and characteristics required in purchasing the product. Therefore the selling organizations can also use this step to increase their sales.

Search of Supplier

In this step of the business buying process, the buying organization searches the suppliers. In order to make a purchase with the best one. For this purpose, a list of competitive vendors is prepared by the buying organization through the use of supplier directories. Also the aid of a computer (internet), or contacting other organizations for obtaining recommended names.

The internet is increasingly becoming a platform for such searching. Nowadays as most of the organizations are entering into this virtual world. In the case of buying new and expensive products. So the more time is consumed in searching for suitable suppliers. That can best meet the specifications of the required product.

The suppliers should keep themselves enrolled in the relative directories. Just to make their good reputation in the market. Moreover, the salesperson should also target the supplier searching organizations in the business market.

Proposal Solicitation

In this stage, the suppliers are asked to submit their proposals. In some cases, some suppliers send only their salespersons or simple catalogs. However, when the desired product is more expensive and complex. Than proper formal presentations and detailed written proposals are required from the qualified suppliers. So the marketers of business organizations should also be skillful in writing. As well as in presentation of business proposals to the buying organizations.

Selection of Supplier

At this stage, the final supplier is selected from the list of potential suppliers. Who have submitted their proposals to the buying organization. So the selection team of the buying organization reviews the proposals of all suppliers. Also lists the offered attributes on the basis of the rank of importance. So following are some of the main attributes that serve as the basis for the selection of potential suppliers.

• Quality of product
• Delivery time
• Ethical corporate behaviour
• Reasonable price
• Honest communication
• Past performance and reputation
• Repair and maintenance services etc.

Order-Routine Specification

The order-routine specifications are prepared in this step. Actually which contains the order having a final list of the specifications, the selected supplier. Also delivery time, quantity required, price and repair and maintenance services, etc.

Performance Review

This is the last stage of the business buying process in which the performance of the supplier is reviewed by the buying organization. For this purpose the buying organization contacts the customers. As well as users of the purchased product and asks them to provide their experience of using that product.

Mainly the Consumer Behavior or the satisfaction level of users serves as the basis of the performance reviewing factor. Particularly for the product purchased from business suppliers. So the performance review helps in the future decisions of the business buying process. Specifically in the form of straight re-buy, modified re-buy, or new task buying. Therefore the selling organization also takes into account the same factors. That would affect the performance review by the buying organization.

Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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