3the buying process and buyer behavior final

7/29/2019 3The Buying Process and Buyer Behavior fInal

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Concepts and Practices


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Customer Strategy DefinedA customer strategy is a carefully conceived plan thatresults in maximum customer responsiveness. Onemajor dimension of this strategy is to achieve a betterunderstanding of the customers buying needs andmotives.

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trateg c onsu tat veSelling Model

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omp ex ature oCustomer Behavior

Individual customers perceive the product in their ownterms

The customer is a person,not a statistic

Companies that fully acceptthis basic truth are likely to

adopt a one-to-onemarketing strategy

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Consumer versus

Organizational Buyers Consumer buyer behaviorrefers to the buying behavior

of individuals and households who buy goods andservices for personal consumption

Business (organizational) buyer behaviorrefers to theorganizations that buy goods and services for use inthe production of other products and services that aresold, rented, or supplied to others

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Differences Between Consumer and

Organizational Buyers

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Types of Consumer

Buying Situations

Habitual buying situations

Variety-seeking buying situations

Complex buying situations

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Achieving Alignment The buying process is a systematic series of actions, or

a series of defined, repeatable steps, intended toachieve a result

Salespeople need to be clear on how decisions arebeing made

Acquire specific information rather than makegeneralizations about the buyers decision-making

process

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Steps in the Buying Process

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Steps in the Buying Process Need awareness

Salespeople can create value by determining problemsand identifying solutions

Evaluation of solutions

Salespeople can create value by providing usefulinformation

Resolution of problems

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Steps in the Buying Process Purchase

Salespeople create value by arranging financing orsupervising delivery and installation

Implementation

Value creation involves timely delivery, superiorinstallation, accurate invoicing, or follow-up contacts bythe salesperson

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Characteristics of Organizational Buying Behavior


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Characteristic

Demand

Volume

No. of Customers

Location

Distribution

Nature of Buy

Buy InfluenceNegotiations

Reciprocity

Leasing

Promotion

Business Market

Organizational

Larger

Fewer

Concentrated

More Direct

More Professional

MultipleMore Complex

Yes

Greater

Personal Selling

Consumer Market

Individual

Smaller

Many

Dispersed

More Indirect

More Personal

SingleSimpler

No

Lesser

Advertising

Business vs Consumer Markets


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HOW BUSINESSES CHOOSE A VENDOR


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BUYING CENTERS


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Comparing the stages in consumer andorganizational purchases


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How the buying situation affects buyingcenter behavior


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Forces Influencing Organizational Buying

Behavior

EnvironmentalForces

Organizational

Forces

Group

Forces

Individual

Forces

Organizational

Buying

Behavior

Economic Outlook:

Domestic & Global

Pace of TechnologicalChange

Global Trade Relations

Goals, Objectives, and

Strategies

Organizational Positionof Purchasing

Roles, relative

influence, and patterns

of interaction of buying

decision participants

Job function, past

experience, and buying

motives of individual

decision participants

M j El f O i i l B i B h i


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The behavior of organizational

buyers is influenced by

environmental, organizational,

group, and individual factors.

Major Elements of Organizational Buying Behavior


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Types of Organizational Buying Situations

New-task buy:

Straight rebuy

Modified rebuy

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Three Buying Situations1. New Task (slide 2 of 4)

New taskthe problem or need is totally differentfrom previous experiences.

Significant amount of information is required.

Buyers operate in the extensive problem solving stage. Buyers lack well defined criteria.

Lack strong predispositions toward a solution.

Salespeople rely on consultative selling skills


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Three Buying Situations2. Modified Rebuy (slide 3 of 4)

Modified rebuydecision makers feel there arebenefits to be derived by reevaluating alternatives.Or for some important reason the buyer isconsidering different vendor or product changes.

Most likely to occur when displeased with theperformance of current supplier.

Buyers operate in the limited problem solving stage.

Buyers have well defined criteria.

Salespeople can provide service/anticipate changes


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Three Buying Situations3. Straight rebuy (slide 4 of 4)

Straight rebuythe problem or need is a recurringor continuing situation.

Buyers have experience in the area in question.

Require little or no new information. Buyers operate in the routine problem solving stage.

Salespeople constantly monitor satisfaction


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Buyer Resolution TheoryWhy should I buy? (need)

What should I buy? (product)

Where should I buy? (source)

What is a fair price? (price)

When should I buy? (time)

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How buyer and seller participants and pricebehavior differ by type of online auction


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Customer Strategy Model


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Business Marketing

Business marketing- The marketing ofgoods and services to individuals and

organizations for purposes other than

personal consumption.


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Supply Partnership

A supply partnership exists when a

buyer and its supplier adopt mutually

beneficial objectives, policies, and

procedures for the purpose of lowering

the cost or increasing the value of

products and services delivered to theultimate consumer.


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Buying Center

A buying center is the group of people in

an organization who participate in the

buying process and share common goals,

risks, and knowledge important to a

purchase decision.


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E-marketplaces are online trading

communities that bring together buyers

and supplier organizations to make

possible the real time exchange of

information, money, products, and

services.

E-Marketplaces


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Understanding Buying Processes

Transactional buyers

Salespeople can eliminate any unnecessary costs ordelays

Consultative buyers

Salespeople focus attention on needs awareness/helpcustomer evaluate solutions

Strategic alliance buyers

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A traditional auction is an online auction

in which a seller puts an item up for sale

and would-be buyers are invited to bid in

competition with each other.

Traditional Auction


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A reverse auction is an online auction in

which a buyer communicates a need for a

product or service and would-be suppliers

are invited to bid in competition with each

other.

Reverse Auction


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Basic Needs

Maslow Physiological: food, shelter

Security: free from danger

Social: identificationwith social groups,friendship

Esteem: desire to feel worthy

in eyes of others Self-actualization: need for mastery, self-fulfillment

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Group Influences

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Group Influences Role: expectations associated with position

Reference groups: categories of people you see yourselfbelonging to

Social class: group with similar values, interests,lifestyles

Culture: influences of group with common language,environment, also subcultures

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Discussion Question

Overgeneralizing based on demographics can bedangerous. Remember, prospects act as individuals,

not stereotypes.Some predict the demise of demographics inmarketing.

How would this impact customer analysis?

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Perception: Customer

Need Formation

Facts are negotiable. Perception is rock-solid.

Selective attention: We tend to screen outcertain messages . . . information overload

Buyers conditioned by social-culturalbackground and need to use various selectiveprocesses

Salespersons should encourage client to discussperceptions of products

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Buying MotivesA buying motive is an aroused need, drive, or desire

that stimulates behavior to satisfy the aroused need

Its helpful to discover the dominant buying motiveor DBM

Four basic motive typesemotional, rational,patronage, and product

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Emotional and Rational Motives

Emotional

Acts due to passion orsentiment

Emotional appealscommon

If two products areidentical, thesalesperson who

connects has theadvantage

Rational

Acts on reason orjudgment

Relatively free ofemotion

Salespeople gather,interpret, anddisseminate customer-

specific information

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Discussion Questions

What types of purchases would bedominated by emotional buying

motives?What types of purchases would be

dominated by rational buying motives?

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Customers Can Make

Better Decisions Using:

8-42See theWebsite
http://www.consumerreports.org/cro/home.htmhttp://www.consumerreports.org/cro/home.htmhttp://www.consumerreports.org/cro/home.htmhttp://www.consumerreports.org/cro/home.htmhttp://www.consumerreports.org/cro/home.htmhttp://www.consumerreports.org/cro/home.htm


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Discussion Questions

What sort of role would informationprovided by sources like Consumer

Reportsplay in a customers decision?How can a salesperson use this

information to his/her advantage?

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Patronage and Product Motives

Patronage Buy from a particular

firm

Past experience positive

Relevant elements:superior service, productselection, competentsales staff

Product

Buyer believes oneproduct is superior to

others Preferences for: specific

brands, quality, price,design/engineering

3the buying process and buyer behavior final

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