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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.htm7/29/2019 3The Buying Process and Buyer Behavior fInal
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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