INDUSTRIAL
Download
1 / 40

INDUSTRIAL BUYER BEHAVIOUR - PowerPoint PPT Presentation


  • 383 Views
  • Updated On :

INDUSTRIAL BUYER BEHAVIOUR. The purpose for mentioning Bombardier : The success of this company is because it has a good understanding of the buyer behaviour of the business market. INDUSTRIAL BUYER BEHAVIOUR. The Industrial Buying Process

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' INDUSTRIAL BUYER BEHAVIOUR' - Sophia


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Slide1 l.jpg

INDUSTRIAL

BUYER

BEHAVIOUR


Slide2 l.jpg

The purpose for mentioning Bombardier :The success of this company is because it has a good understanding of the buyer behaviour of the business market


Slide3 l.jpg

INDUSTRIAL

BUYER

BEHAVIOUR

  • The Industrial Buying Process

  • 3 types of industrial markets- producers and manufacturers- trade industries (wholesalers and retailers)- governments

  • industrial market demand characteristics

  • industrial product categories

  • government markets

In this chapter we’ll cover


Slide4 l.jpg

Industrial Market

“Individuals and organizations that acquire goods and services to be used, directly or indirectly, in the production of other goods and services or to be resold.” TEXT

“People who buy stuff to make other things.” W.T.G.R.

Page 161


Slide5 l.jpg

- producers and manufacturers- trade industries (wholesalers and retailers)- governments

3 types

of industrial markets

Page 161


Slide6 l.jpg

producers and manufacturersThose who transform goods and services, through production, into other goods and services

manufacturing firms (eg. Auto parts, computers)

farms

mining and forest industries

construction and building companies

service companies (trucking, air, rail)

public utilities, banks, insurance companies

3 types

of industrial markets

Page 161


Slide7 l.jpg

Trade Industries (gong ye maoyi)

Organizations such as wholesalers and retailers that buy things for resale to customers

examples - lumber dealers, fabric wholesalers, building materials

metal and electrical products

3 types

of industrial markets

Page 162


Slide8 l.jpg

Governments (zheng fu)

Federal Ministries and Crown Corporations, Provincial Ministeries and Crown Corporations, Municipal governments and agencies

examples: Dept. of Defense buying trucks from GM, Dept. of Revenue buying computers, Royal Canadian Mint buying paper and

Provincial agencies buy services such as snow clearance, cellular phone service …...

3 types

of industrial markets

Page 162


Slide9 l.jpg

The Increase in value of input material when transformed into semi-finished or finished goods.

input material = parts, raw resources, components etc.

transformed = process, or manufactured, or shaped, or altered etc.

Value Added

Page 162


Slide10 l.jpg

Example into semi-finished or finished goods.

asbestos company makes asbestos material

another company buys it, shapes it, and makes asbestos brake pads

another company buys the pads - puts them together with the other brake parts to form a component

the auto assemble company buys the whole component and puts it on the car as it is going down the assembly line

Value Added


Slide11 l.jpg

Example into semi-finished or finished goods.

sport shoes, with special NIKE logo - makes the shoes more expensive

t-shirt with special design or drawing

animal fur - made into a fur coat

ice cream - ice cream w strawberries on top

watch - watch with diamonds and jewels added

wood - wood made into furniture

blank canvas - “Picasso”

Value Added


Industrial market features l.jpg

Geographic into semi-finished or finished goods.eg. Auto parts companies tend to locate near auto assembly plants

Small number of buyers34,000 mfg companies in Canada30 million population as consumers- however mfg. Companies make bigger purchases than an individual consumer

Industrial Market - Features

Page 162-163


Slide13 l.jpg

Standard Industrial Classifications (SIC) Codes into semi-finished or finished goods.

A series of industrial classifications developed by the federal government for use in collecting detailed statistics for each industry.

SIC out of date - it will be replaced by the NAICS


Naics north american industry classification system l.jpg

It is a new system that replaces the SIC into semi-finished or finished goods.

The purpose is to promote uniformity in collecting statistics about the economy and companies activities

Will be used in U.S.A., Canada and Mexico

see http://www.webplaces.com/naics/back.htm

NAICSNorth American Industry Classification System


Slide15 l.jpg

Industrial Market Demand into semi-finished or finished goods.

1. Derived Demand

2. Joint Demand

3. Inventory Adjustments

4. Demand Variability


Slide16 l.jpg

Industrial Market Demand into semi-finished or finished goods.

1. Derived Demandmeans the demand is derived (or caused by, or linked to) demand for a consumer item- demand for lithium is “derived” from the demand for lithium batteries, which is in turn “derived” from the demand for cell phones

- demand for wood pulp is derived from the demand for paper, which is derived from the increase in people printing on paper

page 165


Slide17 l.jpg

Industrial Market Demand into semi-finished or finished goods.

2. Joint Demandmeans the demand is related to the demand for other industrial thingseg. The demand for printer cartridges is linked to the demand for printer paperfor services, the demand for Netscape 4.05 - is linked to the demand for an ISP account page 165


Slide18 l.jpg

Industrial Market Demand into semi-finished or finished goods.

3. Inventory Adjustmentsmeans the demand is related to how much the buyer needs to have in stockIf the buyer needs a larger inventory, then demand will be higherIf the buyer is trying to cut back on inventory (eg. Using computer controlled materials handling) then they will need less inventory and just buy in time (called JIT) Just In Time page 165


Slide19 l.jpg

Industrial Market Demand into semi-finished or finished goods.

4. Demand Variabilitythe “impact” of derived demand on the demand for interrelated products used in producing consumer goods

page 166


Slide20 l.jpg

Industrial Market Demand into semi-finished or finished goods.

Accelerator PrincipleThe disproportionate impact that changes in consumer demand have on industrial market demandeg. Small changes in consumer demand can have big changes in the requirement for industrial parts, components and materials to make those products page 166

not equal


Slide21 l.jpg

Categories of Industrial Products into semi-finished or finished goods.

1. Capital Items- things that last a long time, and become less and less in value over time2. Expense Items

- things that are used within a short period of time

- some types of raw materials, office supplies, materials in production


Slide22 l.jpg

Categories of Industrial Products into semi-finished or finished goods.

1. Capital Itemsex - car

- office building

- machinery and equipment2. Expense Items

ex - gas for the car

- washing the windows for the building

- parts for the machinery


Slide23 l.jpg

Categories of Industrial Products into semi-finished or finished goods.

  • Depreciation

  • Theaccounting concept for charging a portion of the cost of a capital item as a deduction against the company’s revenue- eg. 486 DX2 Office computer bought in 1995 - deduct $750 in 1995- deduct $750 in 1996etc. page 166


Slide24 l.jpg

Many people involved in the decision making process into semi-finished or finished goods.

Takes a lot of time to “network” and explain aspects of the product

Need to get the approval of many peope to get a final decision

Committees may be involved and this takes time

Many organizations try to use different sources and therefore do not always buy from the same supplier all the time

Industrial Buying

Page 167


Slide25 l.jpg

The Complexity of Industrial Purchases into semi-finished or finished goods.

negotiations can take a long time

Many people involved in the decision making process have different points of view

Many companies selling industrial parts and components spend a lot of time in developing relationships with key people who are buyers

Many companies buying industrial parts and components have a person who specifically deals with buying - the “purchasing manager”

Industrial Buying

Page 167


Slide26 l.jpg

The Purchase of a Capital Item into semi-finished or finished goods.

negotiations can take months to full explain all the- features- advantages- benefitsof the product

sometimes the seller has to convince the buyer they can create a special customized product for their special industrial needs

eg. New type of utility pole

Industrial Buying

Page 168 - 169


Slide27 l.jpg

Straight Rebuy into semi-finished or finished goods.

recurring (buying all the time) the same thing

Modified Rebuy

regular buying, but with some re-evaluation to think about things each time

New Task / First-time Buying

this takes a lot of effort on the part of the buyers to consider many aspects

Classifying Industrial

Purchasing Situations

Page 170


Slide28 l.jpg

Buying Centre Roles into semi-finished or finished goods.

1. Users

2. Gatekeepers

3. Influencers

4. Deciders

5. Buyers

Page 171


Slide29 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

Page 173


Slide30 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

Need Recognition

- simply the understanding that you need something

- can be caused by an emergency, or just the execution of your plans to do something


Slide31 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

Information Search

- make a list of who are the best potential suppliers

- purpose is to know, in detail, what you need, and what you should buy

- have to develop a list of technical specificationseg. Waterproof, or withstand heat of 200 degrees


Slide32 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

Delineation of Suppliers

- collect information on potential suppliers


Slide33 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

Sales Demonstration/Proposal

- potential suppliers are then invited to make a presentation, or come for a meeting to provide a proposal

- includes technical and economic considerations


Slide34 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

Advertisements

- usually done in trade magazines and newsletters


Slide35 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

Technical articles + in the late 1990’s, extensive Internet searches

- the buying group examines this information to determine how it fits their requirements


Slide36 l.jpg

A Model of the Industrial Buying Process into semi-finished or finished goods.

  • Word of Mouth

  • Personal and interpersonal influences

  • Review of Internal Proposals

Page 173


Reciprocity l.jpg

Buying from suppliers who are also customers into semi-finished or finished goods.

eg. Computer manufacturer buys all computer paper from forest products company that uses their computers

eg. Ford executives rent cars from Hertz - cause Hertz uses Ford cars !

Reciprocity


Slide38 l.jpg

Government buying of products and services is 52% of Canada’s GDP

therefore selling to the government is important business

Government Markets

Page 174


Slide39 l.jpg

Bids Canada’s GDP

price quotations from potential suppliers

Specifications

Specific descriptions of the items

in many situations, this information is extremely detailed

Government Markets

Page 174


Slide40 l.jpg

Three Ways of Obtaining Bids Canada’s GDP

An Invitation to Tender (offer)

- for big things that cost a lot of money

Requests for Quotations

- for small purchases less than $5,000

Requests for Proposals

- for noncompetitive purchases more than $5,000

Government Markets

Page 175


ad