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Chapter 3 Understanding Buyers the consumer market known as the

Acceleration Principle • As demand


Understanding Your Buyers is the Key to Sales increases (or decreases) in the consumer
Success market, the business market reacts by
accelerating the buildup (or reduction) of
Types of Buyers
inventories and increasing (or decreasing)
Consumer Markets- • purchase goods and plant capacity
services for their own use or consumption and 5. Purchasing Professionals •
are highly influenced by peer group behavior, Purchasing Agents: tasked in identifying
aesthetics, and personal taste. suppliers and sourcing goods and services •
Results in a more professional and rational
Business Markets- • Business markets are approach to purchasing
composed of firms, institutions, and 6. Multiple Buying Influences -• Buying team
governments. • These members of the business members come from different areas of
market acquire goods and services to use as: expertise and play different roles in the
inputs into their own manufacturing process purchasing process.
(i.e., raw materials, component parts, and 7. Close Buyer–Seller Relationships- • The
capitalequipment) for use in their day-to-day increased interdependence and desire to
operations (i.e., office supplies, professional reduce risk of the unknown has led to an
services, insurance) for resale to their own emphasis on developing longterm buyer-
customers. seller relationships characterized by
increased levels of buyer-seller interaction
Distinguishing Characteristics of Business and higher levels of service expectations by
Markets buyers.
1. Concentrated Demand -• Small number of
large buyers account for most of the Types of Buyer Needs •
purchases Situational needs- are the specific needs
2. Derived Demand- • denotes that the that are contingent on, and often a result of,
demand in business markets is closely conditions related to the specific
associated with the demand for consumer environment, time, and place. • (e.g.,
goods emergency car repair while traveling out of
3. Higher Levels of Demand Fluctuations- • town, a piece of customized production
the demand for goods and services in the equipment to fulfill a customer’s specific
business market is more volatile than that of situational requirements, or providing for
the consumer market known as the quick initial shipment to meet a buyer’s
Acceleration Principle As demand outof-stock status).
increases (or decreases) in the consumer
market, the business market reacts by Functional needs- represent the need for a
accelerating the buildup (or reduction) of specific core task or function to be
inventories and increasing (or decreasing) performed—the functional purpose of a
plant capacity specific product or service. The need for a
4. Higher Levels of Demand Fluctuations- • sales offering to do what it is supposed to
the demand for goods and services in the do • (e.g., alcohol disinfects, switches open
business market is more volatile than that of
and close to control some flow, the flow information into detailed specifications
control valve is accurate and reliable). describing exactly what is expected and
required.
Social needs- comprise the need for acceptance
from and association with others— a desire to Phase Four—Search for and Qualification of
belong to some reference group. • For example, Potential Sources • Next, buyers must locate
a product or service might be associated with and qualify potential suppliers capable of
some specific and desired affinity group or providing the preferred solution.
segment (e.g., Polo clothing is associated with
upper-income, successful people) Phase Five—Acquisition and Analysis of
Proposals • Based on the detailed specifications,
Psychological needs -reflect the desire for requests for proposals (known in the trade as an
feelings of assurance and risk reduction, as well RFP) are developed and distributed to the
as positive emotions and feelings such as qualified potential suppliers
success, joy, excitement, and stimulation
Phase Five—Acquisition and Analysis of
Knowledge needs- represent the desire for Proposals • The salesperson is responsible for
personal development, information, and presenting the proposed features and benefits in
knowledge to increase thought and such a manner that the proposed solution is
understanding as to how and why things happen evaluated as providing higher levels of benefits
• (e.g., product information, newsletters, and value to the buyer than other competing
brochures, along with training and user support proposals.
group meetings/conferences provide current
information on products and topics of interest). Employing Buyer Evaluation Procedures to
Enhance Selling Strategies

• Modify the Product Offering Being


Phase Two—Determination of the Proposed
Characteristics of the Item and the Quantity
Needed • This particular phase of the buying • Alter the Buyer’s Beliefs about the
process involves the consideration and study of Proposed Offering
the overall situation to understand what is
• Alter the Buyer’s Beliefs about the
required in the form of a preferred solution.
Competitor’s Offering
Phase Two—Determination of the • Alter the Importance Weights • Call
Characteristics of the Item and the Quantity
Attention to Neglected Attributes
Needed • Through effective sales conversations,
salespeople use their knowledge and expertise at Phase Six—Evaluation of Proposals and
this point to assist the buyer in analyzing and Selection of Suppliers • The buying decision is
interpreting the problem situation and needs. the outcome of the buyer’s evaluation of the
various proposals acquired from potential
Phase Three—Description of the suppliers.
Characteristics of the Item and the Quantity
Needed • Using the desired characteristics and Phase Seven—Selection of an Order Routine •
quantities developed in the previous phase as a Once the supplier(s) has been selected, details
starting point, buyers translate that general
associated with the purchase decision must be extensive purchase decision and search for
settled. information designed to identify and compare
alternative solutions.

3.Modified Rebuys • The buyer has experience


in purchasing the product in the past but is
interested in acquiring additional information
regarding alternative products and/or suppliers. •
As there is more familiarity with the decision,
there is less uncertainty and perceived risk than
for new task decisions. • Typically occurs as the
result of changing conditions or needs.
TYPES OF PURCHASING DECISIONS UNDERSTANDING COMMUNICATION
1.Straight RebuysOften the result of a long- STYLES
term purchase agreement. Assertiveness • The degree to which a person
• Needs have been predetermined with the holds opinions about issues and attempts to
corresponding specifications, pricing, and dominate or control situations by directing the
shipping requirements already established by a thoughts and actions of others
blanket purchase order or an annual purchase Responsiveness • Points to the level of feelings
agreement. and sociability an individual openly displays.
• Ordering is automatic and often computerized
by using electronic data interchange (EDI) and
e-commerce (Internet, intranet, and extranet) 30
3 TYPES OF PURCHASING DECISIONS
Straight Rebuys

• Often the result of a long-term purchase


agreement.

• Needs have been predetermined with the


corresponding specifications, pricing, and
shipping requirements already established by a
blanket purchase order or an annual purchase
agreement.

• Ordering is automatic and often computerized


by using electronic data interchange (EDI) and
e-commerce (Internet, intranet, and extranet)

2.New Tasks • Occurs when the buyer is


purchasing a product or service for the first time.
• Buyers have no experience or knowledge • on
which to rely. • Consequently, they undertake an
Amiables • Developing and maintaining close Purchasers • Have the responsibility for
personal relationships is important. negotiating final terms of purchase with
suppliers and executing the actual purchase or
• Priority ‘‘must-have’’ is to be liked and their acquisition.
fundamental ‘‘want’’ is for attention.
Expressives • The two keys for expressives that Gatekeepers • Members who are in the position
salespeople must keep in mind are the ‘‘must- to control the flow of information to and
have’’ of never being hurt emotionally and their between vendors and other buying center
underlying ‘‘want’’ is attention 38 3 U members.

Drivers • “must-have’’ is winning and their


fundamental ‘‘want’’ is results.

Analyticals • ‘‘must-have’’ of being right and


the underlying ‘‘want’’ for analytical activities.

MULTIPLE BUYING INFLUENCES

Buying Teams • Also referred to as buying


centers

• Incorporate the expertise and multiple buying


influences of people from different departments
throughout the organization

Initiators • Individuals within the organization


who identify a need or perhaps realize that the
acquisition of a product might solve a need or
problem.

Influencers • Individuals who guide the


decision process by making recommendations
and expressing preferences. They are often
technical or engineering personnel.

Users • Individuals within the organization who


will actually use the product being purchased. •
They evaluate a product on the basis of how it
will affect their own job performance. • Users
often serve as initiators and influencers.

Deciders • They have the ultimate responsibility


for determining which product or service will be
purchased • Although buyers may also be
deciders, it is not unusual for different people to
fill these roles.