understanding buyers

Understanding BuyersUnderstanding Buyers

Module ThreeModule Three

Learning ObjectivesLearning Objectives

1.1. Categorize primary types of buyers.Categorize primary types of buyers.

2.2. Discuss the distinguishing characteristics Discuss the distinguishing characteristics of business markets. of business markets.

3.3. List the different steps in the business-to-List the different steps in the business-to-business buying process.business buying process.


4.4. Discuss the different types of buyer needs.Discuss the different types of buyer needs.

5.5. Describe how buyers evaluate suppliers Describe how buyers evaluate suppliers and alternative sales offerings by using the and alternative sales offerings by using the multiattribute model of evaluation.multiattribute model of evaluation.

6.6. Explain the two-factor model that buyers Explain the two-factor model that buyers use to evaluate the performance of sales use to evaluate the performance of sales offerings and develop satisfaction.offerings and develop satisfaction.


7.7. Explain the different types of purchasing Explain the different types of purchasing decisions.decisions.

8.8. Describe the four communication styles and Describe the four communication styles and how salespeople must adapt and flex their how salespeople must adapt and flex their own styles to maximize communication. own styles to maximize communication.

9.9. Explain the concept of buying teams and Explain the concept of buying teams and specify the different member roles.specify the different member roles.

Key ThoughtsKey Thoughts• Business markets operate differently than consumer Business markets operate differently than consumer

markets, and those differences affect the selling markets, and those differences affect the selling process.process.

• The role of the salesperson will vary based on where The role of the salesperson will vary based on where the buyer is in the buying decision process.the buyer is in the buying decision process.

• Buyer’s needs may be a mix of situational, functional, Buyer’s needs may be a mix of situational, functional, social, and knowledge needs.social, and knowledge needs.

• The role of the salesperson will vary basedThe role of the salesperson will vary basedon the type of buying decision. on the type of buying decision.

• Salespeople will benefit from being Salespeople will benefit from being able to identify the buyer’s able to identify the buyer’s communication style.communication style.

Categories of BuyersCategories of Buyers

FirmsFirms

InstitutionsInstitutions

GovernmentsGovernments

Non-Profit OrganizationsNon-Profit Organizations

Business MarketsBusiness Markets

People (Personal Use)People (Personal Use)Consumer MarketsConsumer MarketsConsumer MarketsConsumer Markets

Distinguishing Characteristics Distinguishing Characteristics of Business Marketsof Business 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

Recognition ofRecognition ofthe Needthe Need

Description ofDescription ofDesired CharacteristicsDesired Characteristics

Determination of Determination of Desired CharacteristicsDesired CharacteristicsSearch and QualificationSearch and Qualification

of Potential Sourcesof Potential SourcesAcquisition & AnalysisAcquisition & Analysis

of Proposalsof ProposalsEvaluation of Proposals &Evaluation of Proposals &

Selection of SuppliersSelection of SuppliersSelection of anSelection of anOrder RoutineOrder Routine

Performance Feedback Performance Feedback and Evaluationand Evaluation

Buying Decision ProcessBuying Decision Process

Initiating the RelationshipInitiating the RelationshipInitiating the RelationshipInitiating the Relationship

Developing the RelationshipsDeveloping the RelationshipsDeveloping the RelationshipsDeveloping the Relationships

Enhancing the RelationshipsEnhancing the RelationshipsEnhancing the RelationshipsEnhancing the Relationships

Buying Decision ProcessBuying Decision Process



Determination of Determination of Desired CharacteristicsDesired Characteristics

Determination of Determination of Desired 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



Needs Gap – An Example from theNeeds Gap – An Example from theLife of a College SeniorLife of a College Senior

Actual StateActual StateActual StateActual State

Desired StateDesired StateDesired StateDesired State

NeedsNeedsGapGap

I have a job.I have a job.

I do not haveI do not havea job.a job.

The Needs GapThe Needs Gap

Actual StateActual StateActual StateActual State

Desired StateDesired StateProduce 1,250 Units Per DayProduce 1,250 Units Per Day

Produce 1,000 Units Per DayProduce 1,000 Units Per Day

Needs GapNeeds Gap

250 Units Per Day250 Units Per Day

Types of Buyer NeedsTypes of Buyer Needs

Situational NeedsSituational NeedsI need a copier now because I have a major I need a copier now because I have a major project I need to complete.project I need to complete.

I need a copier that sorts and staples.I need a copier that sorts and staples.

I need a state-of-the-art copier so I will be I need a state-of-the-art copier so I will be recognized as of the technology-savvy people recognized as of the technology-savvy people in this company.in this company.

I need an extended warranty with a copier.I need an extended warranty with a copier.

I need comprehensive training on how to use I need comprehensive training on how to use a copier.a copier.

Functional NeedsFunctional Needs

Social NeedsSocial Needs

Psychological NeedsPsychological Needs

Knowledge NeedsKnowledge Needs

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 scoreThe base scoreThe base score

The weightThe weightThe weightThe weight

Multi-Attribute Model: an ExampleMulti-Attribute Model: an Example

Offer from Offer from Company ACompany A

CompensationCompensation

LocationLocation

TrainingTraining

88 .4.4 3.23.2

33 .4.4 1.21.2

77 .2.2 1.41.4

PP II PxIPxI

ScoreScore5.85.8

Offer from Offer from Company BCompany B

CompensationCompensation

LocationLocation

TrainingTraining

33 .4.4 1.21.2

99 .4.4 3.63.6

88 .2.2 1.61.6

PP II PxIPxI

ScoreScore6.46.4

Which Job Which Job Should I Take?Should I Take?

Which Job Which Job Should I Take?Should I Take?

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 Alter the Buyer’s Beliefs about the Proposed OfferingProposed Offering

• Alter the Buyer’s Beliefs about the Alter the Buyer’s Beliefs about the Competitor’s OfferingCompetitor’s Offering

• Alter the Importance WeightsAlter the Importance Weights

• Call Attention to Neglected AttributesCall Attention to Neglected Attributes

Complex Mix of Complex Mix of Business Buyer NeedsBusiness 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

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

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

Buying Decision Types - ContinuumBuying Decision Types - Continuum

Straight Straight RebuyRebuy

Modified Modified RebuyRebuy

New New TaskTask

Habitual and Routine Habitual and Routine Decision MakingDecision Making

Extensive Consideration Extensive Consideration and Decision Makingand Decision Making

Communication Styles MatrixCommunication Styles Matrix

Low Low AssertivenessAssertiveness

High High AssertivenessAssertiveness

Low Low ResponsivenessResponsiveness

Low Low ResponsivenessResponsiveness

High High ResponsivenessResponsiveness

AnalyticalAnalytical DriverDriver

AmiableAmiable ExpressiveExpressive

Slow PacedSlow Paced Fast PacedFast Paced

Relationship OrientedRelationship Oriented

Task OrientedTask Oriented

Communication Style FlexingCommunication Style Flexing

The process by which the salesperson adjusts The process by which the salesperson adjusts his/her communication style to fit that of the his/her communication style to fit that of the

customers in order to facilitate effective customers in order to facilitate effective communication.communication.

Need Need DiscoveryDiscovery

Ask specific, Ask specific, fact-finding fact-finding

questions in a questions in a systematic systematic manner.manner.

Ask fact Ask fact finding finding

questions questions leading to leading to

what the driver what the driver values and values and rewards.rewards.

Create a Create a cooperative cooperative environment environment with an open with an open exchange of exchange of information information

and feelings.and feelings.

Begin by finding Begin by finding out the out the

Expressive’s Expressive’s perception of the perception of the

situation and situation and vision of the vision of the

ideal outcome.ideal outcome.

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.

Current Developments in PurchasingCurrent Developments in Purchasing

Increasing Use of Information TechnologyIncreasing Use of Information Technology

Relationship Emphasis on Relationship Emphasis on Cooperation and CollaborationCooperation and Collaboration

Supply Chain ManagementSupply Chain Management

Target PricingTarget Pricing

Increased Importance of Knowledge and CreativityIncreased Importance of Knowledge and Creativity

understanding buyers

Documents