©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Understanding Buyers 3

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 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. Discuss the different types of buyer needs. L 1 L 2 L 3 L 4

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Learning Objectives Describe how buyers evaluate suppliers and alternative sales offerings by using the multi- attribute model of evaluation. Explain the two-factor model that buyers use to evaluate the performance of sales offerings and develop satisfaction. Explain the different types of purchasing decisions. L 6 L 5 L 7

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Learning Objectives 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. Identify current developments in purchasing. L 8 L 9 L 10

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 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.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 1. What are the two types of buyers?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Categories of Buyers Governments Consumer Markets Institutions Firms Business Markets

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 2. What are the various characteristics of business markets?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Consumer Computer Market Computers Suppliers Computer Component Suppliers Manufacturing Equipment Suppliers Office Consumable Suppliers Labor, Financial, Other Resources Peripheral Suppliers Computer Consumable Suppliers Distinguishing Characteristics of Business Markets Concentrated Demand Derived Demand Higher Levels of Demand Fluctuation Purchasing Professionals Multiple Buying Influences Close Buyer-Seller Relationships

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 3. What are the eight steps in the buying process?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Buying Decision Process

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Needs Gap – An Example from the Life of a College Senior Actual State Desired State Needs Gap I have a job. I do not have a job.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 The Needs Gap Actual State Desired State Produce 1,250 Units Per Day Produce 1,000 Units Per Day Needs Gap 250 Units Per Day

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 4. What are the different types of buyer needs?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Types of Buyer Needs Situational 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 technology-savvy in this company. I need an extended warranty with a copier. I need comprehensive training on how to use a copier. Functional Needs Social Needs Psychological Needs Knowledge Needs

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Types of Buyer Needs Situational Needs I need a new cell phone now because mine is broken and I am heading out-of-town. I need a cell phone with a keyboard. I need a state-of-the-art cell phone so I will be recognized as a technology-savvy person. I need a cell phone with an extended warranty. I need comprehensive training on how to use a new cell phone. Functional Needs Social Needs Psychological Needs Knowledge Needs

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Ethical Dilemma

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Buyer Needs and Benefit-Based Solutions

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Organizational vs. Individual Needs

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Request for Proposal RFP: A form developed by firms and distributed to qualified potential suppliers that help suppliers develop and submit solution proposals.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Procedures for Evaluating Suppliers and Products Descriptive Rating

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Procedures for Evaluating Suppliers and Products Performance Score Rating

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Procedures for Evaluating Suppliers and Products Multi-Attribute Model

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Procedures for Evaluating Suppliers and Products Multi-Attribute Model Weighting of the performance characteristics changed the outcome.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Multi-Attribute Model Assessment of Product or Supplier Performance (P) Assessing the Relative Importance of Each Characteristic (I) The base score The weight

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Multi-Attribute Model: an Example Offer from Company A Compensation Location Training PIPxI Score 5.8 Offer from Company B Compensation Location Training PIPxI Score 6.4 Which Job Should I Take?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 5. What are the five fundamental strategies salespersons can use in the buyer evaluation stage?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 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

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 6. Explain the Two-factor model of buyer evaluation.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Postpurchase Evaluation and the Formation of Satisfaction

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 7. What are the various types of purchasing decisions?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 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

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Types of Purchasing Decisions Electronic Data Interchange (EDI): Transfer of data electronically between two computer systems.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Buying Decision Types

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 8. Define Assertiveness and Responsiveness.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Assertiveness The degree to which a person holds opinions about issues and attempts to dominate or control situations by directing the thoughts and actions of others.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Responsiveness It points to the level of feelings and sociability an individual openly displays.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Understanding Communication Styles

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 9. What are the four communication styles?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Communication Styles Matrix

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 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.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 10. What are the different kinds of members in the buyer teams?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Buying Teams Employees from one or more departments fill the roles in the buying center and work together to affect the outcome of the purchase decision.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Q. 11. What are the current trends in purchasing?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 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 Increased Outsourcing Buyers’ Access to and Demand for Relevant Information

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Ethical Dilemma