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Understanding Buyers

Module Three

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Understanding BuyersAn Experts Viewpoint:

Nick LaRoche is an account executive for S.K.K.R., a

manufacturers representative group selling Weber-

Stephens Products. Nick makes an effort to understand his

buyers and the way they do business. For example, Nick

found a way to help one of his customers increase profitssimply by changing the way they purchased Weber

products.

Action

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Understanding BuyersAn Experts Viewpoint:

The amount Nick sold to this account soon doubled.

The relationship between Nick and the buyer hascontinued to grow since the purchasing change. The

buyer has realized increased sales revenue and profits

while Nick has enjoyed watching this account grow in

total volume.

Result

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Categories of Buyers

Firms

Institutions

Governments

Non-Profit Organizations

Consumer Markets

Business Markets

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Distinguishing Characteristics of

Business Markets

Concentrated Demand

Derived Demand

Higher Levels of Demand Fluctuation

Purchasing Professionals

Multiple Buying Influences

Close Buyer-Seller Relationships

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Buying Decision Process

Recognition of

the Need

Determination of

Desired Characteristics

Description of

Desired Characteristics

Search and Qualification

of Potential Sources

Acquisition & Analysis

of Proposals

Evaluation of Proposals

Selection of Suppliers

Selection of an

Order Routine

Performance Feedback

and Evaluation

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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.

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Multi-Attribute Model

Assessment of

Product or Supplier

Performance (P)

Assessing the RelativeImportance of Each

Characteristic (I)

The base score

The weight

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P I PxI

P I PxI

Multi-Attribute Model: an Example

On-line Resume

Service

Campus Career

Services

NetworkingOpportunities

Exposure

of Resume

Quality

Control

Networking

OpportunitiesExposure

of Resume

Quality

Control

.5

.3

.1

.5

.3

.1

8

4

4

4

8

6

2

2.4

.4

4

1.2

.6

4.8

5.8

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Employing Buyer Evaluation Procedures

to Enhance Selling Strategies

Modify the Product Offering Being Proposed

Alter the Buyers Beliefs about the Proposed

Offering

Alter the Buyers Beliefs about the Competitors

Offering

Alter the Importance Weights

Call Attention to Neglected Attributes

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Complex Mix of Business Buyer Needs

BuyersLevel of

Satisfaction

PsychologicalAttributesDelighters

FunctionalAttributesMust-Haves

63%Level of Influence

On Buyers Satisfaction

37%Level of Influence

On Buyers Satisfaction

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Characteristics of the

Three Types of Buying Decisions

StraightRebuy

ModifiedRebuy

NewTask

Newness of Problem or Need

Information Requirements

Information Search

Consideration of New Alternatives

Multiple Buying InfluenceFinancial Risks

Low

Minimal

Minimal

None

Very SmallLow

Medium

Moderate

Limited

Limited

ModerateModerate

High

Maximum

Extensive

Extensive

LargeHigh

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LowAssertiveness

HighAssertiveness

LowResponsiveness

HighResponsiveness

Communication Styles Matrix

Analytical Driver

Amiable Expressive

Slow Paced Fast Paced

Relationship Oriented

Task Oriented

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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

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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