The composition of the buying centre may evolve during purchasing process and it may vary from one

purchasing situation to another. Do you agree or disagree with the statement? You must support your position with reference to an example [company and industry]. Depending on the information requirements of the specific situation, the composition of the buying centre does indeed evolve during purchasing process and it varies from one situation to another. When in the process of purchasing, different individuals are required at different stages of the purchase. The knowledge and skills that is required often differs, therefore individuals with knowledge and skill of a specific stage in the purchasing process is considered necessary to assist. Automotive industries are essential economic sectors by revenue that design, develop, manufacture, market and sell motor vehicles. An Australian owned motor vehicle industry that was created in 1856 by the name of GM Holden Ltd will be used as reference to the examples that will be mentioned. Holden requires a number of different individuals to help in the steps for organisational buying process. During the first step, which is problem recognition, the managers of Holden locate a problem in regards to their product. The production managers then need to address the issues concerning their product and develop a detailed description of the equipment that is required. The following stage is for Holden to search for the right supplier to meet their requirements. The supplier must be able to provide Holden with equipment that will match their product and meet the expectations of Holden and its consumers. After thorough research of different suppliers, Holden will be expected to make a decision about which supplier to purchase from. The managers of Holden need to make sure they choose the right supplier in order to maintain their position in the market. A delivery date is then set for the production equipment, followed by a performance review after the equipment is installed. Another factor that is determines the evolvement of the composition of the buying centre is the purchasing situation. In the new task buying situation, a lot more information will be required; therefore the buying centre will evolve significantly. If Holden was to invest in strategic new as opposed to judgmental new task, different individuals from different skilled backgrounds will be required in assisting in the decision making, each individual will be
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responsible for a different stage in the purchasing process. For example, Holden may want to manufacture a completely new vehicle from what they normally manufacture; a vehicle that is different from their previous designs and requires new technology so as to design and create. Mechanical designers will be necessary to design the vehicle and give the Holden management a clear and detailed illustration of the features of the motor vehicle. A lot of time and money will be spent in order to create the ideal end result for Holden. On the other hand, if Holden was to perform a straight re-buy, there will be little or no new information required. Therefore depending on whether it is a causal approach or a routine low priority, the composition of the buying centre does not evolve as much, especially if it is a causal approach. Holden management will already have experience in the purchase decisions due to previous repeat purchases of the same product and will know what needs to be done to make the right purchase decisions. For example, if Holden wanted to purchase sets of screws and bolts for their motor vehicles, it would be a causal approach thus they would be purchasing from a supplier they have been purchasing in the past and are satisfied with. Furthermore, in a modified re-buy, the management of a company realises that benefits can arise through re-evaluating alternatives. For example, Holden may be purchasing tyres from a specific supplier who they are content with, but later realise they want to search alternatives for reasons such as quality improvements or cost reduction. Reevaluation of alternatives will occur, and if a better deal is found, Holden will stop purchasing from their current supplier and purchase from the new supplier, but if they were not able to find a better deal, they will remain with their current supplier. Modified re-buy requires moderate amount of information therefore the composition of the buying centre does involve, but not drastically.

The buying process may indeed evolve during the purchasing process and it will be dependant on the varying situations and the requirements of the particualr situation. A buying group forms once the need has been identified and due to the fact that organisational buying is a process and not an isolated act, during the different stages of the process, varying indviduals will play their significant roles. For example a design engineer may be required more so , early in the process when product specifications are being formed, other individuals will exert a dominant influence later in the process. To further
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illustrate this view, we will be looking at Toyota Motor Corporation as a reference to this point. The buying process consits of eight different stages, each of which yields a decision. Stage one would be problem recognition. During this stage Managers at Toyota Motor Corporation will identify a problem/need that needs to be addressed or even an oppurtunity that can be captured. For toyota this could mean the problem recognition in the area of packaging for their motor vehicles , or alternatively seizing an oppurtunity for the need of a specific product in a segemented market. There are two different forces which are the catalyst for problem recognition nad these are internal and external forces. Internal forces occur within the organisation and this could be that a managers at Toyota being unhappy with the service or price of an equipment supplier. an external example could be that Toyotas marketing team ifluences marketing behaviour by precipitating the need for the product by demonstrating how a particualr product may solve their problem. Stages 2 and 3 which are , general description of need and product specification, can occur unconsciously. By this we mean if Toyota, mapped out the characterstics needed in a new packaging system and the production manager assisted the purchaisng manager by developing a detailed and precise descritpion of the needed equipments these requirements will limit the number of suppliers as only some can only meet the specifications. This type of behaviour can occur early and dramatically influence and lead to automatic choice of a supplier. For Toyota Motoring Corporation, stages 4 and 5 occur simultaneaously due to the fact that the information needs of the buying organisation are low. During these stages the purchasing manager would only manage a slight change in the pricing or any other small differences in comparison to thier last purchase. Stage 6 and 7 for Toyota , would be select a chosen supplier and agree on the purchasing guidelines. Once the requirements and the rules of the trade have been met, both parties go into trade. Through theri dealing, Toyotas production managers will conduct a performance review (stage 8), where they will evaluate the performance of the equipment and the service support provided by the supplier. the performance review may lead the purchasing manager to continue, modify or cancel the agreement.
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Toyota have been dealing business since 1934, therefore they have significant experience in purchasing a product and how to go about the situation. Toyota mainly will concentrate on the buying situation rather then the products. There are three different buyig situation- new task, modified rebuy and straight rebuy. In new task rebuy, Toyota will require a significant amount of information to explore alternative ways in solving the problem. there are two different buying decision approaches used in this phase: judgemental new task and strategic new task. If toyota was to invest in strategic new task decision as opposed to judgemental new task, they would require a set of differentiated people with different skills and knowledge , all coming in at the different stages of the process. For example , If Toyota identified an oppurtunity into a new segment group during stage 1 of the purchasing process, they ma want to develop a complete new vehicle which they are not accustomed to. This would mean they would require different equipment, tools, machinery and set of different skilled labour force. The engineering depratment would need to educate themanagement group on how the vehicle will operate, inform them of the specification the product and its requirements. Due to the fact that toyota will be in unfamiliar territory alot of time and money will be invested to get this right. As opposed to new task, Straight rebuy requires minimal information in order for an organisation to reach a decission. For example, Toyota have been dealing with their supplier for a long perisod of time and due to the knowledge of Toyota manger knowing what thier supplier offer, there needs to be minimal effort or reseach put into place before a decission is reached. In modified rebuy, organisations decission makers feel they can derive significant benefits by re evaluating alternatives. For example, Toyota would be purchasing the tyres for the vehicles from a supplier that thier content with but later on search for alternatives for reasons such as quality improvement, price or even design. Re-evaluation of alternatives will occur to depict whether toyota have a better option and if there is no better alternative toyota will continue to have business dealings with the supplier that thier currently with. Modified rebuy allows a substantial amount of research and information thus composition of the buying centre does evolve but not significatnly

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In conclusion, through thorough research and the use of refernces , we can safely assume that the compositiong of the buying center does indeed evolve during the purchasing process and the differnt situations will allow for variance. There are certains stages and elements in the purchasing process which will influence which set of individuals that posses a certain skill is needed and how they go about in conducting their task.

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