The activities involved in buying are called buying process. The activities involved in buying process are buying elements and sub-functions. The process of buying starts from buying plan. But it ends with actual buying and experience from the use after buying.
The sub-function of buying involve in buying process can be divided in four types as- making buying plan, making contact with, talking for agreement and contracting.
The sub-function of buying involve in buying process can be divided in four types as- making buying plan, making contact with, talking for agreement and contracting.
1. Planning For Buying
Planning for buying is the primary function of buying process. At first, the buyer realizes need of goods. Then makes plan for buying of goods, finally takes decision to buy the goods. Planning begins is buyer's mind from want or desire for goods. Then the buyer decides when to buy, where to buy from, how to buy the goods. Such decision depends specially on buying situation, buying motive and buying behavior of the buyer.
Hence, need of buying is realized in buying plan. Budget for buying is estimated. Then decision for buying is taken. Finally, buying plan is ready for the combined form of mental and physical activities.
2. Contact Function
After making buying plan, the customers think from where and which source the goods to buy. For this they should search for suppliers and identify, prepare their list and establish contact with them for supplying the goods. This is called contact function. The customers may contact the suppliers through correspondence or visiting to their supply sources. Generally, if a large amount of goods are to be bought, the buyers contact supplier or sellers personally and find out the capacity and possibility of the supplier for supplying the necessary goods.
Before selecting supplier of necessary goods, the buyers think about different matters such as price of the goods, delivery schedule, transportation cost, quality, capacity of the supplier, means and resources, after-sale services, promotional policy, credibility and responsibility of the supplier, terms and conditions of selling, buying plan etc. Only then, proper supplier should be selected and contacted.
3. Negotiation
The another important function of buying process is to reach the decision to buy and sell goods or services through negotiation. After buying plan has been made, perspective supplier has been identified and contact with seller has been established, negotiation is held between buyer and seller. Such negotiation is held on terms and conditions of supply, price of the goods, discount, mode of payment, time, delivery schedule, means of delivery etc. and then selling and buying reaches the conclusion.
After such negotiation, buyer decides to give purchase order and makes agreement with supplier to supply the goods.
4. Contractual Function
Contractual function is the actual buying function. After the agreement has been made with supplier on terms and conditions, buyer gives purchase order. If the goods are to be bought by final consumers, they make agreement with seller on price at the selling place and buy immediately. Buying may be on cash or credit depending upon their agreement. If the goods are purchased on credit, the buyer has to follow and implement necessary terms and conditions mentioned in credit documents.
Also Read:
Industrial consumers, institutional buyers, government offices etc also make agreement with supplier to buy necessary goods. Buyer and seller both parties should follow the contract made for the supply of goods. If any party violets the terms and conditions or does not carry out the responsibility according to the agreement, the other party has the right to get compensation or fine or any loss. The seller should supply the goods as according to the agreement and the buyer should make payment of price according to the terms and conditions.
In this way, the sub-functions such as planning for buying, identifying supplier and establishing contact, holding negotiation, making agreement on supply of goods, etc. include in buying process.
