Module Three

Understanding Buyers
 Understanding Buyers
An Expert’s 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 profits simply by
changing the way they purchased Weber products.

Action
 Understanding Buyers
An Expert’s Viewpoint:

Result

The amount Nick sold to this account soon doubled.

The relationship between Nick and the buyer has
continued 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.
Categories of Buyers

Consumer Markets

Business Markets
Firms
Institutions
Governments
Non-Profit Organizations
Distinguishing Characteristics of
Business Markets

• Concentrated Demand
• Derived Demand
• Higher Levels of Demand Fluctuation
• Purchasing Professionals
• Multiple Buying Influences
• Close Buyer-Seller Relationships
 Buying Decision Process

Recognition
Recognition of
of Search
Search and
and Qualification
Qualification Selection
Selection of
of an
an
the
the Need
Need of
of Potential
Potential Sources
Sources Order
Order Routine
Routine

Determination
Determination of
of Acquisition
Acquisition && Analysis
Analysis Performance
Performance Feedback
Feedback
Desired
Desired Characteristics
Characteristics of
of Proposals
Proposals and
and Evaluation
Evaluation

Description
Description of
of Evaluation
Evaluation of
of Proposals
Proposals
Desired
Desired Characteristics
Characteristics Selection
Selection of
of Suppliers
Suppliers
Needs Gap – An Example from the
Life of a College Senior
I have a job.

Desired State

Needs
Gap

Actual State
I do not have
a job.
 Multi-Attribute Model

Assessment of
The base score Product or Supplier
Performance (P)

Assessing the Relative

The weight Importance of Each
Characteristic (I)
 Multi-Attribute Model: an Example
P I PxI
Networking
Opportunities 4 .5 2
On-line Resume Exposure
4.8
Service of Resume 8 .3 2.4
Quality
Control 4 .1 .4

P I PxI
Networking
Opportunities 8 .5 4
Campus Career Exposure
5.8
Services of Resume 4 .3 1.2
Quality
Control 6 .1 .6
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
Complex Mix of Business Buyer Needs

37%
Level of Influence
Functional On Buyers’ Satisfaction
Attributes
“Must-Haves”
Buyers’
Level of
Satisfaction
Psychological 63%
Attributes Level of Influence
“Delighters” On Buyers’ Satisfaction
 Characteristics of the
Three Types of Buying Decisions

Straight Modified New

Rebuy Rebuy Task
Newness of Problem or Need Low Medium High
Information Requirements Minimal Moderate Maximum
Information Search Minimal Limited Extensive
Consideration of New Alternatives None Limited Extensive
Multiple Buying Influence Very Small Moderate Large
Financial Risks Low Moderate High
 Communication Styles Matrix
High
Responsiveness

Amiable Expressive
Relationship Oriented

Low High
Slow Paced Fast Paced
Assertiveness Assertiveness

Task Oriented

Analytical Driver

Low
Responsiveness
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
Buying Center Members

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