Module Three Understanding Buyers

Understanding Buyers An Expert’s Viewpoint: Nick LaRoche is an account executive for S.K.K.R., a manufacturers’ representative group selling Weber-Stephens Products. Nick makes an effort to understand his buyers and the way they do business. For example, Nick found a way to help one of his customers increase profits simply by changing the way they purchased Weber products. Action

Understanding Buyers An Expert’s Viewpoint: Result The amount Nick sold to this account soon doubled. The relationship between Nick and the buyer has continued to grow since the purchasing change. The buyer has realized increased sales revenue and profits while Nick has enjoyed watching this account grow in total volume.

Non-Profit Organizations Categories of Buyers Consumer Markets 1 Business Markets 2 Firms Institutions Governments Non-Profit Organizations

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 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

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 PxI 4.8 Score Networking Opportunities Exposure of Resume Quality Control 8 4 6 .5 .3 .1 2 2.4 .4 4 1.2 .6 On-line Resume Service 5.8 Score Campus Career Services

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 Functional Attributes 37% Level of Influence On Buyers’ Satisfaction “Must-Haves” Buyers’ Level of Satisfaction Psychological Attributes 63% Level of Influence On Buyers’ Satisfaction “Delighters”

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

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

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

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