Module Three Understanding Buyers

Learning Objectives Categorize primary types of buyers. Discuss the distinguishing characteristics of business markets. List the different steps in the business-to-business buying process.

Learning Objectives Discuss the different types of buyer needs. Describe how buyers evaluate suppliers and alternative sales offerings by using the multiattribute model of evaluation. Explain the two-factor model that buyers use to evaluate the performance of sales offerings and develop satisfaction.

Learning Objectives Explain the different types of purchasing decisions. Describe the four communication styles and how salespeople must adapt and flex their own styles to maximize communication. Explain the concept of buying teams and specify the different member roles.

Key Thoughts Business markets operate differently than consumer markets, and those differences affect the selling process. The role of the salesperson will vary based on where the buyer is in the buying decision process. Buyer’s needs may be a mix of situational, functional, social, and knowledge needs. The role of the salesperson will vary based on the type of buying decision. Salespeople will benefit from being able to identify the buyer’s communication style.

Non-Profit Organizations Categories of Buyers Consumer Markets People (Personal Use) Firms Institutions Governments Non-Profit Organizations Business Markets

Distinguishing Characteristics of Business Markets Concentrated Demand Derived Demand Higher Levels of Demand Fluctuation Purchasing Professionals Multiple Buying Influences Close Buyer-Seller Relationships

Buying Decision Process Initiating the Relationship Selection of an Order Routine Recognition of the Need Evaluation of Proposals & Selection of Suppliers Description of Desired Characteristics Acquisition & Analysis of Proposals Determination of Desired Characteristics Search and Qualification of Potential Sources Performance Feedback and Evaluation Developing the Relationships Enhancing the Relationships

Buying Decision Process Recognition of the Need Search and Qualification of Potential Sources Selection of an Order Routine Determination of Desired Characteristics Acquisition & Analysis of Proposals Performance Feedback and Evaluation Description of Desired Characteristics Evaluation of Proposals Selection of Suppliers

Needs Gap – An Example from the Life of a College Senior I have a job. Desired State Needs Gap I do not have a job. Actual State

The Needs Gap Desired State Actual State Produce 1,250 Units Per Day

Types of Buyer Needs Situational Needs Functional Needs Social Needs I need a copier now because I have a major project I need to complete. I need a copier that sorts and staples. I need a state-of-the-art copier so I will be recognized as of the technology-savvy people in this company. I need an extended warranty with a copier. I need comprehensive training on how to use a copier. Situational Needs Functional Needs Social Needs Psychological Needs Knowledge Needs

Multi-Attribute Model Assessment of Product or Supplier Performance (P) The base score P x I = Attribute Score Assessing the Relative Importance of Each Characteristic (I) The weight

Multi-Attribute Model: an Example Compensation Location Training 8 .4 3.2 3 1.2 7 .2 1.4 P I PxI Offer from Company A Score 5.8 Which Job Should I Take? Compensation Location Training 3 .4 1.2 9 3.6 8 .2 1.6 P I PxI Score 6.4 Offer from Company B

Employing Buyer Evaluation Procedures to Enhance Selling Strategies Modify the Product Offering Being Proposed Alter the Buyer’s Beliefs about the Proposed Offering Alter the Buyer’s Beliefs about the Competitor’s Offering Alter the Importance Weights Call Attention to Neglected Attributes

Complex Mix of Business Buyer Needs 37% Level of Influence On Buyers’ Satisfaction Functional Attributes “Must-Haves” Buyers’ Level of Satisfaction Psychological Attributes 63% Level of Influence On Buyers’ Satisfaction “Delighters”

Types of Purchasing Decisions Straight Rebuy Buying Situation Routinized Response Behavior Modified Rebuy Buying Situation Limited Problem Solving New Task Buying Situation Extensive Problem Solving

Characteristics of the Three Types of Buying Decisions Straight Rebuy Modified Rebuy New Task Newness of Problem or Need Information Requirements Information Search Consideration of New Alternatives Multiple Buying Influence Financial Risks Low Minimal None Very Small Medium Moderate Limited High Maximum Extensive Large

Buying Decision Types - Continuum Straight Rebuy Modified Rebuy New Task Habitual and Routine Decision Making Extensive Consideration and Decision Making

Communication Styles Matrix High Responsiveness Amiable Expressive Relationship Oriented Low Assertiveness High Assertiveness Slow Paced Fast Paced Task Oriented Analytical Driver Low Responsiveness

Communication Style Flexing The process by which the salesperson adjusts his/her communication style to fit that of the customers in order to facilitate effective communication. Ask specific, fact-finding questions in a systematic manner. Ask fact finding questions leading to what the driver values and rewards. Create a cooperative environment with an open exchange of information and feelings. Begin by finding out the Expressive’s perception of the situation and vision of the ideal outcome. Need Discovery

Buying Center Members Initiators Users Gatekeepers Influencers Deciders Purchasers The roles in the buying center work together to affects the outcome of the purchase decision.

Current Developments in Purchasing Target Pricing Supply Chain Management Relationship Emphasis on Cooperation and Collaboration Increasing Use of Information Technology Increased Importance of Knowledge and Creativity