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Understanding Buyers

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  1. 3 Understanding Buyers

  2. Learning Objectives Categorize primary types of buyers. Discuss the distinguishing characteristics of business markets. List the different steps in the business-to-business buying process. Discuss the different types of buyer needs. L 4 L L L 1 2 3

  3. Learning Objectives Describe how buyers evaluate suppliers and alternative sales offerings by using the multi-attribute model of evaluation. Explain the two-factor model that buyers use to evaluate the performance of sales offerings and develop satisfaction. Explain the different types of purchasing decisions. L L L 6 5 7

  4. Learning Objectives Describe the four communication styles and how salespeople must adapt and flex their own styles to maximize communication. Explain the concept of buying teams and specify the different member roles. Identify current developments in purchasing. L L L 8 9 10

  5. Key Thoughts • Business markets operate differently than consumer markets, and those differences affect the selling process. • The role of the salesperson will vary based on where the buyer is in the buying decision process. • Buyer’s needs may be a mix of situational, functional, social, and knowledge needs. • The role of the salesperson will vary basedon the type of buying decision. • Salespeople will benefit from being able to identify the buyer’s communication style.

  6. Q. 1. What are the two types of buyers?

  7. Categories of Buyers Consumer Markets Business Markets Firms Governments Institutions

  8. Q. 2. What are the various characteristics of business markets?

  9. Distinguishing Characteristics of Business Markets • Concentrated Demand • Derived Demand • Higher Levels of Demand Fluctuation • Purchasing Professionals • Multiple Buying Influences • Close Buyer-SellerRelationships

  10. Q. 3. What are the eight steps in the buying process?

  11. Buying Decision Process

  12. Desired State NeedsGap Actual State I do not havea job. Needs Gap – An Example from theLife of a College Senior I have a job.

  13. Desired State Needs Gap250 Units Per Day Actual State The Needs Gap Produce 1,250 Units Per Day Produce 1,000 Units Per Day

  14. Q. 4. What are the different types of buyer needs?

  15. Situational Needs Types of Buyer Needs I need a copier now because I have a major project I need to complete. I need a copier that sorts and staples. I need a state-of-the-art copier so I will be recognized as technology-savvy in this company. I need an extended warranty with a copier. I need comprehensive training on how to use a copier. Functional Needs Social Needs Psychological Needs Knowledge Needs

  16. Situational Needs Types of Buyer Needs I need a new cell phone now because mine is broken and I am heading out-of-town. I need a cell phone with a keyboard. I need a state-of-the-art cell phone so I will be recognized as a technology-savvy person. I need a cell phone with an extended warranty. I need comprehensive training on how to use a new cell phone. Functional Needs Social Needs Psychological Needs Knowledge Needs

  17. Ethical Dilemma

  18. Buyer Needs and Benefit-Based Solutions

  19. Organizational vs. Individual Needs

  20. Request for Proposal RFP: A form developed by firms and distributed to qualified potential suppliers that help suppliers develop and submit solution proposals.

  21. Procedures for EvaluatingSuppliers and Products Descriptive Rating

  22. Procedures for EvaluatingSuppliers and Products Performance Score Rating

  23. Procedures for EvaluatingSuppliers and Products Multi-Attribute Model

  24. Procedures for EvaluatingSuppliers and Products Multi-Attribute Model Weighting of the performance characteristics changed the outcome.

  25. Multi-Attribute Model Assessment of Product or Supplier Performance (P) The base score P x I = Attribute Score • Assessing the Relative Importance of Each Characteristic (I) The weight

  26. P P I I PxI PxI 8 .4 3.2 Compensation 3 .4 1.2 Location 7 .2 1.4 Training 3 .4 1.2 Compensation 9 .4 3.6 Location 8 .2 1.6 Training Multi-Attribute Model: an Example Offer from Company A Score5.8 Which Job Should I Take? Score6.4 Offer from Company B

  27. Q. 5. What are the five fundamental strategies salespersons can use in the buyer evaluation stage?

  28. Employing Buyer Evaluation Procedures to Enhance Selling Strategies • Modify the Product Offering Being Proposed • Alter the Buyer’s Beliefs about the Proposed Offering • Alter the Buyer’s Beliefs about the Competitor’s Offering • Alter the ImportanceWeights • Call Attention to Neglected Attributes

  29. Q. 6. Explain the Two-factor model of buyer evaluation.

  30. Postpurchase Evaluation and the Formation of Satisfaction

  31. Q. 7. What are the various types of purchasing decisions?

  32. 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

  33. Types of Purchasing Decisions Electronic Data Interchange (EDI): Transfer of data electronically between two computer systems.

  34. Buying Decision Types

  35. Q. 8. Define Assertiveness and Responsiveness.

  36. Assertiveness The degree to which a person holds opinions about issues and attempts to dominate or control situations by directing the thoughts and actions of others.

  37. Responsiveness It points to the level of feelings and sociability an individual openly displays.

  38. Understanding Communication Styles

  39. Q. 9. What are the four communication styles?

  40. Communication Styles Matrix

  41. Communication Style Flexing The process by which the salesperson adjusts his/her communication style to fit that of the customers in order tofacilitate effectivecommunication.

  42. Q. 10. What are the different kinds of members in the buyer teams?

  43. Buying Teams Employees from one or more departments fill the roles in the buying center and work together to affect the outcome of the purchase decision.

  44. Q. 11. What are the current trends in purchasing?

  45. Current Developments in Purchasing Target Pricing Increased Outsourcing Supply Chain Management Increasing Use of Information Technology Increased Importance of Knowledge and Creativity Buyers’ Access to and Demand for Relevant Information Relationship Emphasis on Cooperation and Collaboration

  46. Ethical Dilemma