Q. Areas of operation in industrial buying?

The initiation stage: This is a phase in which a problem or a need is recognised by the organisation. For instance as a result of the changing environmental trends a manufacturer of pharmaceutical products may perhaps want to introduce certain kinds of medicinal formulations in the form of capsules. This may need specific kinds of raw materials and changes in the production process. Special types of industrial automation or instrumentation may be required.

The recognition of a need is able to be from the environment from the move made by competitors or it may be a move made by a buying organisation to pre-empt competition.

While the purchasing organisation itself may be monitoring its direct competition a supplier can initiate the process of change and create a 'new buy' situation by highlighting the need for a specific product or service. Grill-type of lifts has been banned in the country from the next millennium and therefore a lift manufacturer can create a new buy situation for sophisticated lifts in high-rise buildings. The same lift company can as well create a modified re-buy situation by offering a lift which isn't sophisticated.

By pioneering advice-giving selling a company has an early entry into the buying organisation in spite of the fact that the buying organisation can make use of a consultant in a complex new buy situation. Separately from problem recognition the initiation stage as well deals with the determination and description of the characteristics of the required product and service. There may be a need for an advanced industrial instrumentation system in a power plant and these calls for the firming up of characteristics of several kinds of instruments which are likely to be used in the instrumentation system.