3−1 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Chapter 3

Understanding organisational buyers

3−2 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Understanding organisational customers

Element Domestic buyers Organisational buyers

Buying motivesRelates to personal gain for the family with subjective involvement

Objective measures related to organisational benefits

Product / market knowledge

Low to medium – unlikely to match salesperson

Medium to high because it is their role to know

Buying skill Not usually systematicNormally well developed with bargaining skills and experience

Buying method and style

Informal and verbal, limited process of decision making

Usually formal with written proposals discussed by committee

Selection criteria

Aspects of function, quality, convenience, store, style, salesperson

Benefit and risk to organisation are considered.

3−3 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Producers

Types of organisational buyers cont.

OEM purchasers

end-user purchasers

Resellers

Service providers

wholesale resellers

retail resellers

Government

3−4 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Producers

Types of organisational buyers cont.

OEM purchasers

These manufacturers do not put a brand on their product and often make part of a product or generic home brand item for another large company.

Purchase focus for these buyers will be___________

End-user purchasers

Producing products with their own brand name, these manufacturers are known for the quality or value associated with the brand name in the market.

Purchase focus for these buyers will be ___________

3−5 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Resellers

Types of organisational buyers cont.

Wholesale resellers

Purchase in bulk and sell commodities to retail stores in smaller assortment volumes.

Purchase focus for these buyers will be___________

Retail resellers

These companies typically purchase directly from manufacturers or wholesalers and sell to the domestic consumer market at retail stores. Their success depends on the ability to provide convenient place utility and point of sale support for the product.

Purchase focus for these buyers will be ___________

3−6 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Types of organisational buyers cont.

Service providersService providers need to purchase from other businesses in order to deliver their services. Purchases can include equipment, plant and materials as well as supplies and support/ maintenance services.

Government

For purchases in the public sector, products and services are purchased by local, state and federal government departments for use in the operation of government and the provision of public infrastructure projects.

3−7 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

The nature of organisational demand

Demand is derived– Business to business sales are not accurate in describing

organisational market demand because of the effects of: inventory speculative buying supply chain variables

Demand fluctuation– Organisational demand tends to fluctuate more than

domestic market demand due to economic and industry cycles. This is mainly because industrial purchases are more likely to include large fixed asset purchases rather than necessity grocery items as is the case with the majority of domestic consumer purchases.

3−8 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

The nature of organisational demand cont.

Purchase decision making– B2B sales tend to be larger, less frequent and take longer

to negotiate.

Organisational buyers are well informed.

Organisational buyers purchase very cautiously.

B2B buyer motives are largely rational.– Purchases are largely based on clear justifications and

reasons. These are often documented for future reference and explanations for audit purposes.

Business purchases are often group purchases.

3−9 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

The nature of organisational demand cont.

Buying centre user influencer decider gatekeeper

Roles of each oneIntegrity of the buying centreDynamics of power in the groupPersonalities within the groupSales infiltration of target buying centre

3−10 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Organisational buying criteria and motives

3−11 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Organisational buying criteria and motives cont.

3−12 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Organisational buying criteria and motives cont.

3−13 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Organisational buy grid

3−14 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter RixSlides prepared by Mark Vincent

Trends in organisational purchasing