1. ACCOUNT RELATIONSHIP MANAGEMENT
CHAPTER 4
ACCOUNT RELATIONSHIP MANAGEMENT

2. ORGANIZATIONAL PURCHASING PROCESS
Need Recognition
Specifications
Search for Suppliers
Proposals
Supplier Selection
Performance Evaluation
Repeat Purchases

3. NEED RECOGNITION Problem identification Needs recognized internally
externally
derived demand

4. SPECIFICATIONS
Defining characteristics and quantity of items to be purchased

5. SUPPLIER SEARCH
Purchasing department responsibility (usually)

6. ACQUISITION OF PROPOSALS
Bid process
Systems selling

7. SUPPLIER SELECTION Buying Centers Buying Criteria Marketing
Manufacturing
Research and Development
General Management
Purchasing
Buying Criteria

8. PERFORMANCE EVALUATION
Value analysis
Focus on total costs (invoice, possession and acquisition costs)
Vendor analysis
Focus on vendor’s performance (delivery, reliability, quality, price, service, technical competence)

9. REPEAT PURCHASES
Straight rebuys
Modified rebuys
New task

10. BUYING CENTER “All people involved in the buying decision” Includes:
Economic Buyer
User Buyer
Technical Buying Influence
Advocate/Coach

11. ECONOMIC BUYER Role: Gives final approval
Characteristics: Has access to money, can release money, veto power
Focus: Total organization, bottom line

12. USER BUYING INFLUENCE
Role: to decide on how a purchase will affect job performance
Characteristics: Use or supervise use of product or service
Focus: The job to be performed

13. TECHNICAL BUYING INFLUENCE
Role: To eliminate alternatives
Characteristics: Focuses on quantifiable aspects of product and service; can only say “no” not “yes”
Focus: Product Specifications

14. ADVOCATE/COACH INFLUENCE
Role: Helps guide the sale
Characteristics: May be inside or outside the organization; furnishes and interprets information
Focus: Your success

15. BUILDING RELATIONSHIPS
Awareness
Exploration
Expansion
Commitment
Dissolution

16. AWARENESS Recognition that a supplier is a viable source
Selling Objectives
gain attention
demonstrate how needs can be satisfied

17. EXPLORATION
Parties feel that a possibility of mutual benefit exists; limited commitment and trial.
Selling Objectives
gain initial acceptance
build a successful relationship

18. EXPANSION
Parties have experienced benefits of relationship and want expanded interaction
Selling Objectives:
Get to know customer better
Look for additional ways to help client

19. COMMITMENT Establishing a sole or nearly sole supplier relationship
Selling Objectives
early supplier involvement in need process
long term focus to relationship
multi level interaction

20. DISSOLUTION Decision to limit or leave relationship
Selling Objectives:
look for warning signals
attempt to reinitiate the relationship

21. DISSOLUTION--WARNING SIGNS
Missing information
Uncertainty about information
Uncontacted buying influence
New personnel to job
Reorganization

22. ENHANCING RELATIONSHIPS
Value
Expectations
Bargaining
Trust

23. VALUE
Perception that rewards exceed costs

24. EXPECTATIONS
Standards of conduct and performance are established

25. BARGAINING
Willingness to negotiate each party’s obligations.

26. TRUST
Belief that an individual’s word can be believed and will be fulfilled
Trust based on
likeability
competence
dependability
honesty
customer orientation

27. FROM THE INTERNET
Relationship Management in Action--The Alleris Group, Inc.
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Look at the Relationship Management Challenge Questionnaire

28. FROM YOUR TEXT
Read all of Chapter 4, pages