Type: Process Essays
Sample donated: Hope Carpenter
Last updated: August 11, 2019
?The internal and external influences on buying decisions and range planningBuying in the organisation is a multi-channel process.
Decisions in product buying in design are involving different departments and different level of structures. Range planning involves many influences from the internal and external environment. When organisations face decisions taking there is a lengthy process proceeding the actual orders placing including trends monitoring, economic factors budget and more. Decisions are being taken a long time before usually in a span of the year. External factors that influence the decisions are complex. Economy, changes in the stock market, interest rates influence the buying strategy. They concern customer and the business in terms of budget they can spend for products.
It influences the budget of the company as well as the customer buying behaviour. Changes in regulations can also influence shopping by changing laws certain product may be as affordable to sale no longer, for example, e-cigarettes rules go stricter so its whole has to be aware that big bottles and amount of nicotine is strictly regulated so they don’t produce the stuff that can’t be sold. Political factor, changes in government influence economy. For example, Brexit has influenced the rate of GBP, trade prices import and export from Europe, and the whole uncertainty related to businesses future in the UK has been affected. It has influence consumers and their habits especially considerable number of EU citizens living in the UK.
For example, foreign food sections in UK supermarket may not be profitable if they face changes in demography and people will be willing to spend less than usual due to less political future stability.Trends and social habits and culture are evaluating. Trends are changing.
It is a challenge to predict them and fully satisfy future customer needs. However, the number of quantitative and qualitative techniques and mostly interpretation of its data provided allow buyers to make more accurate decisions. This can be activity band, microdermabrasion home kit or recently popular unicorn design on homeware and accessories. Social factors influence customer awareness of safety and ethics of the product so some products after prolong use may reveal either health or safety issues. For example, people nowadays avoid sugar products because of research and evidence proving its harmful effect on health.
Kinder surprise is being banned in America after cases of choking, which has followed the law change for safety reasons.Independent, DATA http://www.independent.co.uk/life-style/food-and-drink/features/why-are-kinder-surprise-eggs-illegal-in-the-usa-10055273.
htmlThis is a huge external influence that is unpredictable at first and affects buyer’s decisions in the future. To remain competitive business must be head to head with competitors. Importance of buying decisions is crucial to the business, as product deemed high demand must be acquired to keep up with customers needs. Monitoring competitors approach and range allows to fully satisfy customers’ needs and ensure their return. Thorough knowledge of different ranges within the chosen sector, this can lead to innovation of ideas and ranges.Competitors can influence the business as its whole culture for example in terms of customer service quality if the competitor does it well and the business wants to remain competitive they need to improve in this field. The external environment is very dynamic and has to always reviewed.
Internal factors influence buyers decisions as well. Companies may look for more exclusive products or find the cheapest suppliers. Relations with suppliers can influence business as it affects the trade sale overtime and regular buyers receive the better price. However, signing the long-term contract for the certain product may not be profitable as sourcing materials have to be paid while the demand may have changed over time. Different suppliers can offer delivery in different time, so the business must consider if they have enough storage space or if the supplier is able to deliver the product just in time while prices of those options may vary. Each company may have different approaches and relations with the supplier as the product quality and quantity may vary depending on business size and needs.
Communication between departments is key to finance, buying and marketing departments are required to work together depending on organisation sizes it can include warehousing and transport and more. Decisions have to be approved as the marketing team is responsible for product promotion and finance establishes budgets all the departments work together to forecast and take joint decisions that contribute to business success. It is defined in procedures that each business applies. Internal issues and conflicts between departments or teams may significantly delay the process of buying and furthermore its sale. It may lead to loss of profit. External economic factors such as inflation, tax burden, unemployment, propensity to save potential clients, demographic changes, trends and trends, audience sensitivity to advertising and promotions, unemployment rates, social expectations in relation to the country’s economic situation and local market competitive position, etc. – internal conditions related to the company – include, among others, company development strategy, planned marketing campaigns, stages of the product lifecycle, price and distribution decisions in the trading unit, etc.
Further analysis of manufactured goods and services, assortment width and depth, assumptions regarding marketing, sales volume and policy should be made in cross-section of all assortment groups produced in the trading unit, taking into account the planned changes in the assortment, competition analysed. The consumer is a factor that contributes to a more accurate determination of the level sales, can predict how consumers will react to marketing campaigns, how sensitive they are to price changes, how they perceive changes in the assortment. Additional expenses: resources for unforeseen expenses that may arise may result, for example, from the need to carry out additional marketing campaigns, the need for changes in distribution channels, changes in scope or structure, etc..? Processes for designing and developing a profitable range of products to meet consumer needs and compete in the marketBuying and planning range requires consideration of the number of factors. First and most important is the receiver – a target customer. Target customer must be defined, his preferences and needs.
Another step will be to defining price product knowing the demand and customer needs, found products for groups have to be priced appropriately.Too low price may increase sales but also may not satisfy quality expectations of the product and not bring the expected amount of profits. Too high price may not be attractive, so the customer may choose a different source of the product, comparing prices on the internet for example.
To make customers feel valued good customer service is provided that can be an advantage over competitors. Each group of customer is characterized by different needs, preferences, and expectations – they have to be divided into segments with similar preferences. It allows the future sale of the product. Furthermore considering new customers is also important to achieve the optimal sales level. Marketing research changing of preferences and collecting customer feedback may allow decisions in terms of introduction of new products that are in niche but their popularity is growing and demand is increasing.
Identifying competition and further analysis of business position on the market contributes to successful buying decisions. Justifying opportunities, planning, negotiating with suppliers. The packaging, functionality, quality, distribution method, and accessibility of the product may be different in competitors offer so knowledge about them helps in designing own products and learning for the future. Analysing of the competitors is the part of the process and the results of their strengths and weaknesses help to create strategic plan to plan the sale.
Another important part of the process is to analyse the budget, so the products and its amount can be purchased with a purpose for bringing expected profit. Buying process should be backed by sales plan. It can determinate stability within the business. Sales generate profits, so they contribute to the profit.
A Plan simply allowed to identify key points and organises tasks and goals for the period which is at least a year. It requires rests and analysis, so its preparations should begin few months before the end of the year. All the external and internal factors despite constant data collection, have to be reviewed and especially preferences of customers and their purchasing power and competitors. Analysis of market potential and possible sale reviewed in the planning process. Some products are seasonal, but trends also vary, but interest in a certain type of Christmas decorations can help to investigate the trends for the next year and customer preferences. ? The impact of technology and innovation on new product developmentTechnology is constantly improving and technological product’s lifecycle can be relatively short. From the invention of the phone to modern smartphones it can be shown how massively the product changed having the same main function – easy communication regarding distance. Technologies development contribute to changes in consumer buyer behaviour as well as marketing techniques that can influence our sense of need.
For example, microwaves were highly promoted as a quick way of making food, and their popularity has significantly grown since then – people wanted to cook fast and efficient as the social habits have changed, a traditional woman was at home, cooking and looking after children. Nowadays people are working so the need created the product that nowadays is highly popular since the 90s. Although, the biggest technology that influenced the whole world is the Internet. Easy access to a modern form of communication revolutionised shopping and approach to customers. Customers now can actively participate in their feedback and monitoring of their action while shopping online or sharing experiences and opinions. The contemporary customer is also regarded as the innovative potential of the organization, which can be a great tool for gaining a competitive advantage if it is used well. This is an critical issue because the tools provided by new technologies enable consumers to design and modify products according to their own approaches, and thus provide inspiration for creating innovative solutions.
giving consumers more and more activities to do, partly losing control over their final product, but also thanks to that they keep consumers and can acquire new ones. The presented considerations may be used by business managers as a source of knowledge about the growing phenomenon of prohibition. Due to the importance and timeliness of previous applications, they can form the basis for the future. ? Processes and techniques for effective and sustainable supplier sourcing and managementThe process of supplier sourcing is important to find best sources of desired goods, working with best suppliers, that allow us to create profit and are reliable and creation and keeping social relation in trade. All above lead to lowering costs of supplying goods, mostly by getting discounts or creating partnerships. Analysis of the supply market is the first and inherent element of making strategic and operational decisions in the process of purchasing management.
In the collection of data on producers and raw materials, it can use catalogues, price lists, and advertisements. Buyers team are inquiring about their products.After receiving feedback from interested companies, we can decide which partners will be most beneficial.Various criteria are used in the selection of a specific supplier while minimizing total costs. purchase and maintenance of inventories, while creating real premises for the uninterrupted course of logistics supply and production processes. It is a responsible decision, which significantly affects the company’s financial results.
The most important cost element of the transaction is the price of the goods, provided that the quality requirements are met. For the location., Reliable delivery, The financial condition of the supplier, the image of the supplier, the potential of the supplier, transport costs.The financial condition of the supplier is a key factor that should be analysed, as the low price it offers may be due to impending bankruptcy. If for instance the supplier is going under this will cause more problems in the future if the supplier isn’t replaced.The supplier’s assessment according to the above-mentioned criteria can be made (if the company did not have any previous experience with a potential supplier) based on a trial purchase or based on information obtained from other recipients or special economic intelligence organizations.
After selecting the supplier, the negotiation process should be started with him to determine the best terms of the transaction.Nowadays, traditional competition between suppliers and recipients gives way to much more favourable partnership and attention to building relationships, assuming that the mutual relationship is as important as the details of a particular transaction. This results from a difficult, highly competitive situation on the market, where the price or quality differences are often not significant.Obtaining the right supplier is connected not only with the appropriate price offer but with the ability to negotiate to reach an agreement guaranteeing benefits on both sides in accordance with the principle of “success is when everyone wins”. This often involves accepting concessions and changes, but remembering your own benefits.The sustainability and stability of the partnership is a guarantee of the success of such a partnership. The essence of relationships in partner marketing is based on the scope of mutual obligations and trust, because only the presence of both commitment and trust brings results in the form of greater efficiency, productivity and relationship effectiveness.
Frequent relations of cooperation and contacts include the process in which the customer and the supplier’s company create, over time, strong, extensive social, economic, service and technical connections. In the partnership understood in this way, the common strategic goal will be to reduce the total costs and increase the value that is involved in the relations of the companies. Seeking the maximum benefits from the partnership, such as higher quality, lower costs, the partnership between the supplier and the recipient should lead to a balanced high interdependence of partners, including the recognition of the partner-supplier as the only source for a given resource. The finale of all preparatory processes is the conclusion of a contract, i.e. a purchase.https://www.
adidas-group.com/en/sustainability/compliance/supply-chain-approach/ ? Quality requirements of for new product development and processes for quality assuranceThe product that is introduced for sale has to meet legal and safety requirements. However, the quality requirements are influenced by other factors such as functionality that determines the degree of meeting expectations of the product purpose. The product has to be practical, for example, a design that allows its users to fully meet the function but also the degree of difficulty of its use depending on product although things are becoming more and more accessible for consumers and their household (for example coffee machine for pads, dishwasher).Product in terms of quality is also expected to last for certain period of time and be available to use until that date, safely – the most important, as faulty products may cause harm, so its sale won’t be continued and the reputation of the seller may be tarnished. Products quality is also determined by its degree of qualification, for example, luxury products have to look exactly as expected with no exceptions.
Some products have certain features, and they indicate quality for example logo and that prestige influences the price. Quality of the product is also measured in customer satisfaction, as they reference purchase it, and they are satisfied, it means their needs and expectations are met. The presentation, customer service, general feeling of customer feeling happy and, sales conditions and delivery are factors that either buying team and customer face taking purchasing decisions