Marketing 1 – Unit 7: Distribution
Name:
Chapter 23.1: Purchasing
 The terms used to describe organizational buyers
 How planning purchases differs between an industrial market and a reseller's market
 The six-month merchandise plan and its calculations
 The concept of chain store buying
Key Terms
organizational buyers
six-month merchandise plan
centralized buying
I.
wholesale and retail buyers
open-to-buy
decentralized buying
Planning Purchases
Businesses, like consumers, must plan:
1.
2.
3.
Organizational buyers –
A. Industrial Marketing -(other names)
bill of materials
Materials requirement planning (MRP)
B. Resellers
six-month merchandise plan—
beginning-of-the-month (BOM) inventory (formula) –
planned retail reductions –
Open-To-Buy (OTB) –
centralized buying –
Decentralized buying –
C. Government Markets –
Government units –
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Marketing 1 – Unit 7: Distribution
Name:
D. Institutions --
Section 23.2 The Purchasing Function
 The three types of purchase situations
 The criteria for selecting suppliers
 The factors involved in negotiating terms of a sale
 The various Internet purchasing methods
Key Terms
want slips
consignment buying
reverse auction
I.
resident buying offices
memorandum buying
The Buying Process
Types of Purchase Situations
 new-task purchase –
want slip –
 modified rebuy –
 straight rebuy -A. Selecting Suppliers
 production capabilities
sweatshop –
 past experience
 product and buying arrangements
consignment buying
Memorandum buying
 special services
B. Negotiating Terms
C. Internet Purchasing
reverse auction --
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Marketing 1 – Unit 7: Distribution
Name:
Reviewing Key Terms and Concepts
1. What are the differences between organizational buyers and consumers?
2. What products might an industrial buyer purchase?
3. What do wholesale and retail buyers purchase?
4. In a retail buying situation, what does a buyer prepare in advance of the selling situation?
5. Why do chain stores use centralized buying?
1. List the three types of purchase situations.
2. What four things can buyers do to stay abreast of industry trends?
3. Name four criteria buyers use in selecting supply sources.
4. What is the difference between consignment and memorandum buying?
5. What are electronic exchanges and in what types of industries are they found?
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