3−1 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Chapter 3 Understanding organisational buyers

3−23−2 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Understanding organisational customers ElementDomestic buyersOrganisational buyers Buying motives Relates to personal gain for the family with subjective involvement Objective measures related to organisational benefits Product / market knowledge Low to medium – unlikely to match salesperson Medium to high because it is their role to know Buying skillNot usually systematic Normally well developed with bargaining skills and experience Buying method and style Informal and verbal, limited process of decision making Usually formal with written proposals discussed by committee Selection criteria Aspects of function, quality, convenience, store, style, salesperson Benefit and risk to organisation are considered.

3−33−3 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Producers Types of organisational buyers cont.  OEM purchasers  end-user purchasers Resellers Service providers  wholesale resellers  retail resellers Government

3−43−4 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Producers Types of organisational buyers cont.  OEM purchasers These manufacturers do not put a brand on their product and often make part of a product or generic home brand item for another large company. Purchase focus for these buyers will be___________  End-user purchasers Producing products with their own brand name, these manufacturers are known for the quality or value associated with the brand name in the market. Purchase focus for these buyers will be ___________

3−53−5 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Resellers Types of organisational buyers cont.  Wholesale resellers Purchase in bulk and sell commodities to retail stores in smaller assortment volumes. Purchase focus for these buyers will be___________  Retail resellers These companies typically purchase directly from manufacturers or wholesalers and sell to the domestic consumer market at retail stores. Their success depends on the ability to provide convenient place utility and point of sale support for the product. Purchase focus for these buyers will be ___________

3−63−6 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Types of organisational buyers cont. Service providers Service providers need to purchase from other businesses in order to deliver their services. Purchases can include equipment, plant and materials as well as supplies and support/ maintenance services. Government For purchases in the public sector, products and services are purchased by local, state and federal government departments for use in the operation of government and the provision of public infrastructure projects.

3−73−7 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent The nature of organisational demand Demand is derived – Business to business sales are not accurate in describing organisational market demand because of the effects of:  inventory  speculative buying  supply chain variables Demand fluctuation – Organisational demand tends to fluctuate more than domestic market demand due to economic and industry cycles. This is mainly because industrial purchases are more likely to include large fixed asset purchases rather than necessity grocery items as is the case with the majority of domestic consumer purchases.

3−83−8 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent The nature of organisational demand cont. Purchase decision making – B2B sales tend to be larger, less frequent and take longer to negotiate. Organisational buyers are well informed. Organisational buyers purchase very cautiously. B2B buyer motives are largely rational. – Purchases are largely based on clear justifications and reasons. These are often documented for future reference and explanations for audit purposes. Business purchases are often group purchases.

3−93−9 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent The nature of organisational demand cont. Buying centre  user  influencer  decider  gatekeeper Roles of each one Integrity of the buying centre Dynamics of power in the group Personalities within the group Sales infiltration of target buying centre

3−10 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Organisational buying criteria and motives

3−11 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Organisational buying criteria and motives cont.

3−12 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Organisational buying criteria and motives cont.

3−13 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Organisational buy grid

3−14 Copyright  2006 McGraw-Hill Australia Pty Ltd PPTs t/a Selling: Managing Customer Relationships 3e by Peter Rix Slides prepared by Mark Vincent Trends in organisational purchasing