Understanding Buyers

1. Understanding Buyers Module Three

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.

3. Learning Objectives • Discuss the different types of buyer needs. • Describe how buyers evaluate suppliers and alternative sales offerings by using the multiattribute model of evaluation. • Explain the two-factor model that buyers use to evaluate the performance of sales offerings and develop satisfaction.

4. Learning Objectives • Explain the different types of purchasing decisions. • 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.

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. Consumer Markets People (Personal Use) Firms Business Markets Institutions Governments Non-Profit Organizations Categories of Buyers

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

8. Buying Decision Process Initiating the Relationship Recognition ofthe Need Description ofDesired Characteristics Determination of Desired Characteristics Search and Qualificationof Potential Sources Acquisition & Analysisof Proposals Evaluation of Proposals &Selection of Suppliers Selection of anOrder Routine Performance Feedback and Evaluation Developing the Relationships Enhancing the Relationships

9. Buying Decision Process Recognition ofthe Need Search and Qualificationof Potential Sources Selection of anOrder Routine Determination of Desired Characteristics Acquisition & Analysisof Proposals Performance Feedback and Evaluation Description ofDesired Characteristics Evaluation of ProposalsSelection of Suppliers

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

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

12. 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 of the technology-savvy people 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

13. 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

14. 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

15. 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 Importance Weights • Call Attention to Neglected Attributes

16. Complex Mix of Business Buyer Needs 37% Level of Influence On Buyers’ Satisfaction Functional Attributes “Must-Haves” Buyers’ Level of Satisfaction Psychological Attributes 63% Level of Influence On Buyers’ Satisfaction “Delighters”

17. 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

18. Low Medium High Minimal Moderate Maximum Newness of Problem or Need Minimal Limited Extensive Information Requirements None Limited Extensive Information Search Very Small Moderate Large Consideration of New Alternatives Low Moderate High Multiple Buying Influence Financial Risks Characteristics of theThree Types of Buying Decisions Straight Rebuy Modified Rebuy New Task

19. Straight Rebuy Modified Rebuy New Task Habitual and Routine Decision Making Extensive Consideration and Decision Making Buying Decision Types - Continuum

20. Communication Styles Matrix High Responsiveness Expressive Amiable Relationship Oriented High Assertiveness Low Assertiveness Slow Paced Fast Paced Task Oriented Analytical Driver Low Responsiveness

21. Communication Style Flexing The process by which the salesperson adjusts his/her communication style to fit that of the customers in order to facilitate effective communication. Ask specific, fact-finding questions in a systematic manner. Ask fact finding questions leading to what the driver values and rewards. Create a cooperative environment with an open exchange of information and feelings. Begin by finding out the Expressive’s perception of the situation and vision of the ideal outcome. Need Discovery

22. The roles in the buying center work together to affects the outcome of the purchase decision. Buying Center Members • Initiators • Users • Gatekeepers • Influencers • Deciders • Purchasers

23. Current Developments in Purchasing Target Pricing Supply Chain Management Relationship Emphasis on Cooperation and Collaboration Increasing Use of Information Technology Increased Importance of Knowledge and Creativity