understanding buyers module three. understanding buyers an expert’s viewpoint: nick laroche is an...
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Understanding BuyersUnderstanding Buyers
Module ThreeModule Three
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Understanding BuyersUnderstanding BuyersAn Expert’s Viewpoint:An Expert’s Viewpoint:
Nick LaRoche is an account executive for S.K.K.R., a Nick LaRoche is an account executive for S.K.K.R., a manufacturers’ representative group selling Weber-manufacturers’ representative group selling Weber-Stephens Products. Nick makes an effort to understand his Stephens Products. Nick makes an effort to understand his buyers and the way they do business. For example, Nick buyers and the way they do business. For example, Nick found a way to help one of his customers increase profits found a way to help one of his customers increase profits simply by changing the way they purchased Weber simply by changing the way they purchased Weber products.products.
ActionAction
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Understanding BuyersUnderstanding BuyersAn Expert’s Viewpoint:An Expert’s Viewpoint:
The amount Nick sold to this account soon doubled. The amount Nick sold to this account soon doubled. The relationship between Nick and the buyer has The relationship between Nick and the buyer has continued to grow since the purchasing change. The continued to grow since the purchasing change. The buyer has realized increased sales revenue and profits buyer has realized increased sales revenue and profits while Nick has enjoyed watching this account grow in while Nick has enjoyed watching this account grow in total volume.total volume.
ResultResult
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Categories of BuyersCategories of Buyers
FirmsFirms
InstitutionsInstitutions
GovernmentsGovernments
Non-Profit OrganizationsNon-Profit Organizations
Consumer MarketsConsumer Markets
Business MarketsBusiness Markets
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Distinguishing Characteristics of Distinguishing Characteristics of Business MarketsBusiness Markets
• Concentrated DemandConcentrated Demand• Derived DemandDerived Demand• Higher Levels of Demand FluctuationHigher Levels of Demand Fluctuation• Purchasing ProfessionalsPurchasing Professionals• Multiple Buying InfluencesMultiple Buying Influences• Close Buyer-Seller RelationshipsClose Buyer-Seller Relationships
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Buying Decision ProcessBuying Decision Process
Recognition ofRecognition ofthe Needthe Need
Recognition ofRecognition ofthe Needthe Need
Determination of Determination of Desired CharacteristicsDesired Characteristics
Determination of Determination of Desired CharacteristicsDesired Characteristics
Description ofDescription ofDesired CharacteristicsDesired Characteristics
Description ofDescription ofDesired CharacteristicsDesired Characteristics
Search and QualificationSearch and Qualificationof Potential Sourcesof Potential Sources
Search and QualificationSearch and Qualificationof Potential Sourcesof Potential Sources
Acquisition & AnalysisAcquisition & Analysisof Proposalsof Proposals
Acquisition & AnalysisAcquisition & Analysisof Proposalsof Proposals
Evaluation of ProposalsEvaluation of ProposalsSelection of SuppliersSelection of Suppliers
Evaluation of ProposalsEvaluation of ProposalsSelection of SuppliersSelection of Suppliers
Selection of anSelection of anOrder RoutineOrder Routine
Selection of anSelection of anOrder RoutineOrder Routine
Performance Feedback Performance Feedback and Evaluationand Evaluation
Performance Feedback Performance Feedback and Evaluationand Evaluation
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Needs Gap – An Example from theNeeds Gap – An Example from theLife of a College SeniorLife of a College Senior
Actual StateActual State
Desired StateDesired State
NeedsNeedsGapGap
I have a job.I have a job.
I do not haveI do not havea job.a job.
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Multi-Attribute ModelMulti-Attribute Model
Assessment of Assessment of Product or Supplier Product or Supplier
Performance (P)Performance (P)
Assessing the Relative Assessing the Relative Importance of Each Importance of Each
Characteristic (I)Characteristic (I)
The base scoreThe base score
The weightThe weight
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PP II PxIPxI
PP II PxIPxI
Multi-Attribute Model: an ExampleMulti-Attribute Model: an Example
On-line Resume On-line Resume ServiceService
Campus Career Campus Career ServicesServices
NetworkingNetworkingOpportunitiesOpportunitiesExposureExposureof Resumeof ResumeQuality Quality ControlControl
NetworkingNetworkingOpportunitiesOpportunitiesExposureExposureof Resumeof ResumeQuality Quality ControlControl
.5.5
.3.3
.1.1
.5.5
.3.3
.1.1
88
44
44
44
88
66
22
2.42.4
.4.4
44
1.21.2
.6.6
4.84.8
5.85.8
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Employing Buyer Evaluation Procedures Employing Buyer Evaluation Procedures to Enhance Selling Strategiesto Enhance Selling Strategies
• Modify the Product Offering Being ProposedModify the Product Offering Being Proposed
• Alter the Buyer’s Beliefs about the Proposed Alter the Buyer’s Beliefs about the Proposed OfferingOffering
• Alter the Buyer’s Beliefs about the Competitor’s Alter the Buyer’s Beliefs about the Competitor’s OfferingOffering
• Alter the Importance WeightsAlter the Importance Weights
• Call Attention to Neglected AttributesCall Attention to Neglected Attributes
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Complex Mix of Business Buyer NeedsComplex Mix of Business Buyer Needs
Buyers’Buyers’Level of Level of
SatisfactionSatisfaction
Psychological Psychological AttributesAttributes““Delighters”Delighters”
Functional Functional AttributesAttributes
““Must-Haves”Must-Haves”
63%63%Level of InfluenceLevel of Influence
On Buyers’ SatisfactionOn Buyers’ Satisfaction
37%37%Level of InfluenceLevel of Influence
On Buyers’ SatisfactionOn Buyers’ Satisfaction
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Characteristics of theCharacteristics of theThree Types of Buying DecisionsThree Types of Buying Decisions
Straight Straight RebuyRebuy
Modified Modified RebuyRebuy
New New TaskTask
Newness of Problem or NeedNewness of Problem or Need
Information RequirementsInformation Requirements
Information SearchInformation Search
Consideration of New AlternativesConsideration of New Alternatives
Multiple Buying InfluenceMultiple Buying Influence
Financial RisksFinancial Risks
LowLow
MinimalMinimal
MinimalMinimal
NoneNone
Very SmallVery Small
LowLow
MediumMedium
ModerateModerate
LimitedLimited
LimitedLimited
ModerateModerate
ModerateModerate
HighHigh
MaximumMaximum
ExtensiveExtensive
ExtensiveExtensive
LargeLarge
HighHigh
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Low Low AssertivenessAssertiveness
High High AssertivenessAssertiveness
Low Low ResponsivenessResponsiveness
High High ResponsivenessResponsiveness
Communication Styles MatrixCommunication Styles Matrix
AnalyticalAnalytical DriverDriver
AmiableAmiable ExpressiveExpressive
Slow PacedSlow Paced Fast PacedFast Paced
Relationship OrientedRelationship Oriented
Task OrientedTask Oriented
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Types of Purchasing DecisionsTypes of Purchasing Decisions
• Straight Rebuy Buying SituationStraight Rebuy Buying Situation– Routinized Response BehaviorRoutinized Response Behavior
• Modified Rebuy Buying SituationModified Rebuy Buying Situation– Limited Problem SolvingLimited Problem Solving
• New Task Buying SituationNew Task Buying Situation– Extensive Problem SolvingExtensive Problem Solving
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Buying Center MembersBuying Center Members
• InitiatorsInitiators
• UsersUsers
• GatekeepersGatekeepers
• InfluencersInfluencers
• DecidersDeciders
• PurchasersPurchasers
The roles in the The roles in the buying center work buying center work together to affects together to affects the outcome of the the outcome of the purchase decision.purchase decision.
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Current Developments in PurchasingCurrent Developments in Purchasing
Increasing Use of Information TechnologyIncreasing Use of Information Technology
Relationship Emphasis on Cooperation Relationship Emphasis on Cooperation and Collaborationand Collaboration
Supply Chain ManagementSupply Chain Management
Target PricingTarget Pricing
Increased Importance of Knowledge and CreativityIncreased Importance of Knowledge and Creativity