Hospital Purchasing Case Study: Demand, Rebuy, and Buying Center

This case study analyzes the purchasing strategies of a hospital, focusing on three types of purchases: office supplies, small medical items, and large-scale medical equipment. The assignment requires an examination of demand characteristics (derived, inelastic, fluctuating, and joint), rebuy situations (straight, modified, and new), and the composition of the buying center for each purchase type. The analysis also involves exploring the B2B decision-making process, contrasting it with consumer decision-making, and applying the concepts to the hospital setting. The goal is to understand how different purchasing strategies are applied based on the type of goods and services being acquired, including an understanding of the roles of different stakeholders within the buying process. The case study provides an opportunity to apply academic knowledge to a real-world business scenario and demonstrate an understanding of how purchasing decisions are made in a hospital environment.

Principles of Marketing
Assignments
Assignment 7.1 Case Study
Chris Smith is the Purchasing Director for a large chain of hospitals in the southeast of the
US. Chris’ job responsibilities include everything from purchasing office supplies to high
end medical equipment like MRI machines and surgical equipment. Chris is also active in
her local university and likes to hire new, young graduates to work in the department.
She prides herself on being a tough interviewer. She has found out that many people
pursue a career in purchasing but do not have a good understanding of the basics. In the
last few years she had to fire several new hires because they did not have the specific
knowledge in order to succeed.
Therefore, as part of the interview process Chris discusses the different types of
purchasing that are done by the hospital. She asks the applicants to apply what they have
learned in business school to the hospital’s specific purchasing areas. She tells them that
she knows that they will not have intimate first-hand knowledge yet of what goes on in the
hospital but she does expect them to be able to apply the academic terminology to the
hospital setting and come up with ‘good guesses’ for how things work.
She tells each applicant that the hospital makes three types of purchases:
1. Office supplies and routine purchases
2. Small medical items like bandages, scissors, tape, etc
3. Large scale medical purchases like new XRay and MRI machines
As part of the analysis that each applicant is asked to prepare, Chris asks for the following
sections to be addressed:
1. Demand – speculate on derived, inelastic, fluctuating and joint demand situations
for each of the hospital’s three types of purchases.
2. Rebuy – consider straight, modified, and new for each of the hospital’s three types
of purchases.
3. Buying center – speculate on who is part of the buying center (HINT: Chris looks to
see how the make up of the buying center changes depending on what is being
considered for purchase. Speculate on the members for each of the three types of
purchases).
4. The B2B decision making process. (HINT: Chris looks to see that the applicant
understands the differences between consumers making decisions about what to
buy and businesses making decisions about what to buy so you might want to
compare and contrast the B2B and consumers).
Principles of Marketing Assignment Lesson 07, V2.4 Page 1 of 1 8/21/2024
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