1. Understanding Buyers
Chapter 3

2. Types of Buyers
Consumer market - A market in which consumers purchase goods and services for their use or consumption.
Business market - A market composed of firms, institutions, and governments who acquire goods and services to use as inputs into their own manufacturing process, for use in their day-to-day operations, or for resale to their own customers.
Derived demand - Demand in business markets that is closely associated with the demand for consumer goods.

3. DISTINGUISHING CHARACTERISTICS OF BUSINESS MARKETS
Concentrated demand: Business buyers tend to be larger in size but fewer in numbers.
Derived demand: Demand in business markets is closely associated with the demand for consumer goods.
Higher levels of demand fluctuation: Demand for goods and services in the business market is more volatile than that of the consumer market.
Acceleration principle - As demand increases (or decreases) in the consumer market, the business market reacts by accelerating the buildup (or reduction) of inventories and increasing (or decrease) plant capacity.

4. DISTINGUISHING CHARACTERISTICS OF BUSINESS MARKETS - p.2
Purchasing Professionals: Professional and rational approach to purchasing.
Multiple Buying Influences: Salespeople often work simultaneously with several individuals during a sales call and even different sets of buyers during different sales calls.
Collaborative Buyer-Seller Relationships: Supply chain management - the strategic coordination and integration of purchasing as well as external organizations.

5. THE BUYING PROCESS Phase One - Recognition of the Problem or Need:
The Needs Gap
Desired states - A state of being based on what the buyer desires.
Actual states - A buyer’s actual state of being.
Needs gap - A perceived difference between a buyer’s desired and actual state of being.

6. TYPES OF BUYER NEEDS
Situational needs - The needs that are contingent on, and often a result of, conditions related to the specific environment, time and place.
Functional needs - The need for a specific core task or function to be performed.
Social needs - The need for acceptance from and association with others.
Psychological needs - The desire for feeling of assurance and risk reduction, as well as positive emotions and feelings such as success, joy, excitement, and stimulation.
Knowledge needs - The desire for personal development, information, and knowledge to increase thought and understanding as to how and why things happen.

7. Phase Two
Determination of the Characteristics of the Item and the Quantity Needed
Consideration and study of the overall situation to understand what is required in the form of a preferred solution.

8. Phase Three
Description of the Characteristics of the Item and Quantity Needed.
Using the desired characteristics and quantities developed in the previous phase as a starting point, buyers translate that general information into detailed specification describing exactly what is expected and required.

9. Phase Four Search for and Qualifications of Potential Sources
Buyers must locate and qualify potential suppliers capable of providing the preferred solution.

10. Phase Five Acquisition and Analysis of Proposals
Requests for proposal (RFP) - A form developed by firms and distributed to qualified potential suppliers that helps suppliers develop and submit proposals to provide products as specified by the firm.

11. PROCEDURE FOR EVALUATION SUPPLIERS AND PRODUCTS
Assessment of Product or Supplier Performance
The first step in applying the multiattribute model is to rate objectively how well each characteristic of the competing products or suppliers meets the buyer’s needs.
Multi-attribute model - A procedure for evaluating suppliers and products that incorporates weighted averages across desired characteristics.
Accounting for Relative Importance of Each Characteristic
To compare these performance differences properly, each score must be weighted by the characteristic’s perceived importance.

12. Employing Buyer Evaluation Procedures to Enhance Selling Strategies
Five fundamental strategies that are inherent within the evaluation procedures:
Modify the product offering being proposed.
Alter the buyer’s belief about the proposed offering.
Alter the buyer’s belief about the competitor’s offering.
Alter the importance weights.
Call attention to neglected attributes.
Competitive depositioning - Providing information to evidence a more accurate picture of a competitor’s attributes or qualities.

13. Phase Six Evaluation of Proposals and Selection of Suppliers
The buying decision is the outcome of the buyer’s evaluation of the various proposals acquired from potential suppliers.

14. Phase Seven Phase Seven - Selection of an Order Routine
Once the supplier(s) has been selected, details associated with the purchase decision must be settled. These details include delivery quantities, locations, and times along with return policies and the routine for reorders associated with the purchase.

15. Phase Eight Phase Eight - Performance Feedback and Evaluation
The salesperson’s follow-up activities provide the critical points of contact between the buyer and seller in order to ensure consistent performance, respond to and take care of problems, maximize customer satisfaction, create new value opportunities, and further enhance buyer-seller relationships.

16. UNDERSTANDING POSTPURCHASE EVALUATION AND THE FORMATION OF SATISFACTION
Two-factor model of evaluation - A postpurchase evaluation process buyers use that evaluates a product purchase using functional and psychological attributes.
Functional attributes - The features and characteristics that are related to what the product actually does or is expected to do.
Must-have attributes - Features of the core product that the customer takes for granted.
Psychological attributes - A category of product characteristics that refers to how things are carried out and done between the buyer and seller.
Delighter attributes - The augmented features included in the total market offering that go beyond buyer’s expectations and have a significant positive impact on customer satisfaction.

17. The Growing Importance of Salespeople in Buyers’ Postpurchase Evaluations
Understanding the differential impact of functional (must- haves) and psychological (delighters) attributes is important for salespeople. Functional attributes possess a close correspondence to the technical and more tangible product attributes, whereas the psychological attributes are similar to the interpersonal communication and behaviors of salespeople and other personnel having contact with customers. Numerous research studies across a variety of industries evidence psychological attributes as having up to two times more influence on buyer satisfaction and loyalty than functional attributes.

18. TYPES OF PURCHASING DECISIONS
Straight rebuy decision - A purchase decision resulting from an ongoing purchasing relationship with a supplier.
Electronic data interchange (EDI) - Transfer of data electronically between two computer systems.
New Tasks
A new task decision occurs when the buyer is purchasing a product or service for the first time.
Modified Rebuys
Modified rebuy decision - A purchase decision that occurs when a buyer has experience in purchasing a product in the past but is interested in acquiring additional information regarding alternative products and/or suppliers.

19. UNDERSTANDING COMMUNICATION STYLES
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.
Responsiveness - The level of feelings and sociability an individual openly displays.
Amiables - Individuals who are high on responsiveness, low on assertiveness, prefer to belong to groups, and are interested in others.

20. UNDERSTANDING COMMUNICATION STYLES (p. 2)
Expressives - Individuals who are high on both responsiveness and assertiveness, are animated, communicative and value building close relationships with others.
Drivers - Individuals who are low on responsiveness, high on assertiveness and detached from relationships.
Analyticals - Individuals who are low on responsiveness and assertiveness, analytical and meticulous, and disciplined in everything they do.

21. BUYING TEAMS
Buying teams - Teams of individuals in organizations that incorporate the expertise and multiple buying influences of people from different departments throughout the organization.
Initiators - Individuals within an organization who identify a need.
Influencers - Individuals within an organization who guide the decision process by making recommendations and expressing preferences.
Users - Individuals within an organization who will actually use the product being purchased.

22. BUYING TEAMS - p.2
Deciders - Individuals within an organization who have the ultimate responsibility of determining which product or service will be purchased.
Purchasers - Organizational members who negotiate final terms of the purchase and execute the actual purchase.
Gatekeepers - Members of an organization who are in the position to control the flow of information to and between vendors and other buying center members.

23. ENGAGING CUSTOMERS Focusing on the Customer Experience
Customers expect companies to have a clear understanding of their needs and to proactively address their current and future needs with a personalized customer experience.
The Role of Information Technology
Information technology electronically links buyers and sellers for direct and immediate communication and transmission of information and data.

24. ENGAGING CUSTOMERS - p. 2
Buyers’ Demand for Access to Relevant Information
As buyers increasingly undertake a larger share of the purchase process on their own, they are demanding that sellers make available to them relevant content to help them justify their buying decisions.
The Need for Adding Value
Buyers depend on the salesperson to provide unique and value-added solutions to their changing problems and needs. The salesperson must possess a thorough understanding of product applications and the needs of the customer to work with the buyer in generating innovative solutions.

25. Outsourcing - The process of giving to a supplier certain activities that were previously performed by the buying organization.Outsourcing - The process of giving to a supplier certain activities that were previously performed by the buying organization.