Module 4

UNDERSTANDI
NG BUYERS
P ro f . M a r ia N im f a R . D ia z , D B A

Professional Salesmanship
by Thomas N. Ingram, Raymond W. La Forge, Ramon A. Avila, Charles H. Schwepker and Michael R.
 Types of Buyers
The most common categorization of buyers are:

1. Consumer Market
-A market in which consumers purchase goods and services for the use of
consumption.

2. Business Market
-A market composed of firms, institutions, and governments who acquire
goods and services to use as inputs into their own manufacturing process, for
use in their day to day operations, or for resale to their own customers.
Characteristics of Business Markets
Concentrated Demand
-Business markets typically exhibit high levels of
concentration in which a small number of large buyers
account for most of the purchases.

Derived Demand
-Denotes that demand in business markets that is closely
associated with the demand for consumer goods.
Acceleration Principle
-When demand increases or decreases in the consumer market, the business
market reacts by accelerating the buildup or reduction of inventories and
increasing or decreasing plant capacity

Supply Chain Management

-The strategic coordination and integration of purchasing with other
functions within the buying organization as well as external organizations.
 Phase 1: Recognition of the Problem/ Need
Needs are the result of a gap between buyers' desired states and actual states.
Consequently, need recognition results when individual cognitively and
emotionally processes information relevant to his or her actual state of being
and compares it to the desired state of being.
Desired States
-A state of being based on what the buyer desires
Actual States
-A buyer's actual state of being
The Needs Gap
-A perceived difference between a buyer's desired and actual state of being
Types of Buyer Needs
1. Situational Needs
- The needs that are contingent on, and often a result of, conditions related to the specific environment,
time, and place.
2. Functional Needs
-The need for a specific core task or function to be performed.
3. Social Needs
-The need for acceptance from and association with others.
4. Psychological Needs
-The desire for feelings of assurance and risk of reduction, as well as positive emotions, and feelings
such as success, joy, etc.
5. Knowledge Needs
-The desire for personal development, information, and knowledge to increase thought and
understanding as to how and why things happen.
Complex Mix of Business Buyer Needs
- - - - - - - - - - - - - - -

Social
Social Psychological
Situational Psychological
Situational

d ge
d ge o wle
o wle Functional
Kn
Functional
Kn

- - - - - - - - - - - - - - -

Organizational Needs Individual Needs

Phase 2: Determination of the Characteristics of the Item and
the Quantity Needed

Involves the consideration and study of the overall

situation to understand what is required in the form of a
preferred solution. This begins to establish general
characteristics and quantities necessary to resolve the
problem or need.
Phase 3: Description of the Characteristics of the Item
and the Quantity Needed
Using desired characteristics and quantities developed the previous phase,
buyers translate that general information into detailed specifications- these
serves several purposes:
1. It guides supplier firms in developing their proposals
2. It provides the buyer a framework for evaluating, comparing and
choosing among proposed solutions.
Post purchase specifications serve as a standard for evaluation to ensure the
firm receives required product features and quantities.
Trust-based buyer-seller relationships allow salespeople to work closely
with buyers.
Phase 4: Search for and Qualification of Potential Sources
Buyers must locate and qualify potential suppliers capable of
providing the preferred solution.
Due to the large number of information sources available to
buyers researching potential suppliers, one of the most important
tasks in personal selling is to win the position of one of those
information source and keep buyers informed about the
salesperson's company, new products and solution capabilities.
Phase 5: Acquisiton and Analysis of Proposals
Requests for Proposal (RFP)
-A form developed by firms and distributed to qualified potential suppliers that
helps suppliers develop and submit proposals to provide products as specified
by the firm.

Based on the RFP, qualified suppliers develop and submit proposals to provide
products as specified.

Salespeople play a critical role by developing and presenting the proposed

solution in such a manner that the proposed solution is evaluated as providing
higher levels of benefits and value to the buyer than other competing
proposals.
Phase 6: Evaluation of Proposals and Selection of Suppliers

The buying decision is the outcome of the buyer's

evaluation of the various proposals acquired from potential
suppliers. Further negotiations will be conducted with the
selected supplier for the purpose of establishing the final
terms regarding the product characteristics, pricing and
delivery.
Multiattribute Model
-A procedure for evaluating suppliers and products that incorporates
weighted averages across desired characteristics.

Competitive Positioning
-Providing information to evidence a more accurate picture of a competitor's
attributes or qualities.
Phase 7: Selection of an Order Routine
Once the suppliers has been selected, details associated
with the purchase decision must be settled. These details
include delivery quantities, locations, and times along with
return policies and routine reorders associated with the
purchase.
For cases which purchase requires multiple deliveries, the
routine for placing subsequent orders and making
deliveries must be set out and understood.
 Phase 8: Performance Feedback and Evaluation

This phase is for the purpose of improving future

performance and enhancing buyer-seller
relationships. At this stage, salespeople's customer
interaction become the primary determinants of
customer satisfaction and buyer loyalty.
Two-Factor Model of Evaluation
A postpurchase evaluation process buyers use that evaluates a product purchase
using functional and psychologicl attributes.

Categories:
Functional Attributes - The features and characteristics that are related to what the
product actually does or is expected to do.
Must-have Attributes - Features of the core product that the customer takes for
granted.
Psychological Attributes - A category of product characteristics that refers to how
things are carried out and done between the buyer and seller.
Delighter Attributes - The augmented features included in the total market
offering that go beyond buyer's expectations and have a significant positive
impact on customer satisfaction.
 The Two-Factor Model of Buyer Evaluation
“Must-Haves”
37% Level of Influence
Functional Attributes of Buyers' Satisfaction
• Meeting standards
• Operating trouble free
• Performing as expected Buyers' Level of
• Product uniformity Satisfaction

Psychological Attributes
• Ability to respond to 63% Level of Influence
requests of Buyers' Satisfaction
• Being innovative
• Consideration for the
customer
• Eagerness to satisfy
• Able to do the job right
“Delighters”
Types of Purchasing Decisions
Straight Rebuy Modified Rebuy New Task

Habitual and Routine Extensive Consideration

Decision Making and Decision Making

(Continuum of Types of Buying Decisions)

Types of Purchasing Decisions

1. Straight Rebuy Decision

A purchase decision resulting from an ongoing purchasing relationship with
a supplier
• Electronic Data Interchange
Transfer of data electronically between two computer systems.
2. Modified Rebuy Decision
A purchase decision that occurs when a buyer has
experience in purchasing a product in the past but is
interested in acquiring additional information
regarding alternative products and or suppliers.
3. New Task
A purchase decision that occurs when a buyer is purchasing
a product or service for the first time.
Understanding Communication Styles

• 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.

• Responsiveness - The level of feelings and sociability an individual

openly displays.
Comparison of the Principal Characteristics of Assertiveness
and Responsiveness
Low Assertiveness High Assertiveness
• Slow-paced • Fast paced
• Cooperative • Competitive
• Avoid taking risks • Takes risks
• Supportive • Independent
• Team player • Directive
• Nondirective • Confrontational
• Easygoing • Forcefully expresses opinions
• Reserved in Expressing opinions

Low Responsiveness High Responsiveness

• Task oriented • Relationship oriented
• Guarded and cool • Open and warm
• Rational • Emotional
• Meticulous organizer • Unorganized
• Inflexible regarding time • Flexible regarding time
• Controlled gesturing • Highly animated
• Nondirective • Spontaneous
• Formal • Informal
Communication Styles Matrix High
Responsiveness

Amiables Expressives
• Relationship • Relationship
Oriented Oriented
• Slow paced • Fast paced

Low Assertiveness High Assertiveness

Analyticals Drivers
• Task Oriented • Task Oriented
• Slow paced • Fast paced

Low
Responsiveness
Amiables
-Individuals who are high on responsive, low on assertiveness, prefer to
belong to group, and are interested in others.
Expressives
-Individuals who are high on both responsive and assertiveness, are
animated, communicative and value building close relationships with
others.
Drivers
-Individuals who are low on responsiveness, high on assertiveness and
detached relationship.
Analytical
-Individuals who are low on responsiveness and assertiveness, analytical
and meticulous, and disciplined in everything they do.
 COMMUNICATION STYLE FLEXING

• Salespeople need to adapt to the style of the buyer to enhance

communication
• Positively impacts:
•  Salespeople’s performance
•  Quality of buyer-seller relationships
• Mismatched styles between a seller and buyer can be dysfunctional in
terms of effective collaboration and present significant barriers for
information exchange and relationship building.
COMMUNICATION STYLE FLEXING

• Differences in styles manifest themselves in the form of differences in

preferred priorities (relationships versus task orientation) and favored
pace (fast versus slow) of information exchange, socialization, and
decision making.
• To minimize potential communication difficulties stemming from
mismatched styles, salespeople should flex their personal styles to
better fit the preferred priorities and pace of the buyer.
Buying Teams
Teams of individuals in organizations that incorporate the expertise and multiple buying
influences of people from different departments throughout the organization.
• Initiators - Individuals within an organization who identify a need.
• Influencers - Individuals within an organization who guide the decision process by
making recommendations and expressing preference.
• Users - Individuals within an organization who will actually use the product being
purchased.
• Deciders - Individuals within an organization who have ultimate responsibility of
determining which product/service will be purchased.
• Purchasers - Organizational members who negotiate final terms of the purchase and
execute the actual purchase.
• Gatekeepers - Members of an organization who are in the position to control the flow
of information to and between vendors and other buying center members
The Role of Information Technology

Buyers and sellers alike are using technology to enhance the effectiveness of
the purchasing process.
Information Technology electronically links buyers and sellers for direct
and immediate communication and transmission of information and data.
Customer Relationship Management (CRM) systems integrated with the
Web allow reps to have a more informed conversation with prospects and
customers by helping them better understand customers
Selling in Action: How to Become Invaluable to
Your Customers
Value
-is defined and created by customers.
-Therefore, your approach to value creation must
begin with, and be in partnership with, and end with
the customers.
Selling in Action: How to Become Invaluable to
Your Customers
3 Steps for a Sound Approach to Selling Value:
1. Start with the Customer - Understand where the customer is going.
2. Collaborate with the Customer - Work out how your
product/service can be applied to their processes in order to
address external pressures, internal obstacles and/or emerging
opportunities.
3. Work with your Customer - Ensure customers that you are actually
deriving value from the use of your products/services.
 The Need for Adding Value
The increased interdependence between buyer and seller
organizations hinges on the salesperson's capabilities to serve as a
problem solver in a dynamic and fast changing business
environment.

• Outsourcing
-The processes of giving to a supplier certain activities that
were previously performed by the buying organizations.
END of presentation…. Thank you! !
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1 Timothy 6:10

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10 For the love of money is a root of all kinds of evils. It is

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through this craving that some have wandered away from the
faith and pierced themselves with many pangs.

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Colossians 3:23
23 Whatever you do, work heartily, as for the Lord and not for

God bless you!

men,

Proverbs 23:23
Dr. M
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23 Buy truth, and do not sell it; buy wisdom, instruction, iver
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and understanding. iaz