SUPPLY CHAIN MANAGEMENT OF HIGHLY IMPORTANT CUSTOMER

1. Understanding
Buyers
How and why customers buy
Chapter Two

2. Chapter
Objectives
• Categorize primary types of buyers
• Create ideal buyer profile
• Discuss the distinguishing characteristics
of business markets
• List the different steps in the buying
process.
• Discuss the different types of buyer
needs.
• Explain the different types of purchasing
decisions.
• Explain the concept of buying teams and
specify the different member roles.

3. Introduction
▪ Why do salespeople need to understand the buyer?
▪ Salespeople work and interact with many different types
of buyers.
▪ Buyer needs, motivations, and buying behavior differ
from one buyer type to another.
❖ Consider the buying situations of nike running
shoes for retail buyer or athletic equipment buyer
for sport club

4. Categories of Buyers
❖ Consumer Markets:
▪ Purchase goods & services for own use/consumption
▪ Highly influenced by group behavior, aesthetics, and
personal taste.
❖ Business Markets:
▪ Acquire to use as inputs into manufacturing process, day-to-
day operations, or for resale.
▪ Firms, Institutions, Governments, and Non-Profit
Organizations

5. Create Ideal Buyer Profile
A description of an
imaginary company that
would make your perfect
client.
= Industry
= Firmographic (Size, Revenue,
Location, Product, Budget)
= Pain points
= Opportunities for growth

7. Distinguishing Characteristics of Business Markets
❖ Concentrated Demand
❖ Small number of buyers
❖ Derived Demand
❖ Closely associated with consumer market
❖ Higher Levels of Demand Fluctuation
❖ More volatile in B2B
❖ Purchasing Professionals
❖ Multiple Buying Influences
❖ Close Buyer-Seller Relationships
❖ TSMC → Apple

8. Buying Decision Process

9. Phases of the business buyers’ purchase process
Recognition of the
problem or need
Determination of
the characteristics
of the item and the
quantity needed
Description of the
characteristics of
the item and
quantity needed
Search for and
qualification of
potential sources
Acquisition and
analysis of
proposals
Evaluation of
proposals and
selection of
suppliers
Selection of an
order routine
Performance
feedback and
evaluation

10. Need Recognition
state that you want the things to be
the state in which things actually are

11. Types of Buyer Needs

12. Types of Buyer Needs
❖ Based on the buying situation and the benefits
provided by the product or service
❖ Situational needs are needs related to the buyer’s
specific environment, time, and place.
❖ Functional needs are the need for a specific core task
or function to be performed.
❖ Social needs are the need for acceptance from and
association with others.

13. Types of Buyer Needs
Psychological needs - feeling of assurance and risk
reduction, as well as positive emotions and feelings
such as success, joy, excitement, and stimulation.
Knowledge needs - personal development, information,
and knowledge to increase thought and understanding
as to how and why things happen.

14. Example of Buyer Needs for Copier
Situational Needs • I need a copier now because I have a major
project I need to complete.
• I need a copier that sorts and staples.
• I need a state-of-the-art copier so I will be
recognized as of the technology-savvy people
in this company.
• I need an extended warranty with a copier.
•
• I need comprehensive training on how to use
a copier.
Functional Needs
Social Needs
Psychological Needs
Knowledge Needs

15. Phase Two—Determination of the Characteristics of the Item
and the Quantity Needed
◦ Assist the buyer in analyzing and interpreting the problem situation and needs.
Phase Three—Description of the Characteristics of the Item
and the Quantity Needed
◦ Salespeople assist buyers in establishing the detailed specifications
Phase Four—Search for and Qualification of Potential Sources
◦ Keep buyers informed about their company, new products, and capabilities.

16. ❖Phase Five—Acquisition and Analysis of Proposals
❖Procedures for Evaluating Suppliers and Products
❖Multiattribute model incorporating weighted averages across
desired characteristics
❖Multiattribute Model
❖How well the product performs in meeting the
characteristics
❖Relative importance of each specified characteristic.

17. Multi-Attribute Model: an Example
Assessment of Product or Supplier
Performance
Accounting for Relative Importance of Each
Characteristic

18. ❖ Phase Six—Evaluation of Proposals and Selection of
Suppliers
❖ Further negotiations
❖ Phase Seven—Selection of an Order Routine
❖ Delivery quantities, locations, and times
❖ Phase Eight—Performance Feedback and Evaluation

19. Types of Purchasing Decisions
Straight Rebuy Buying Situation
◦ buyer reorders something without any
modifications
Modified Rebuy Buying Situation
◦ Product that haven been purchased
previously but with modification
New Task Buying Situation
◦ Purchasing a product for the first time

20. Characteristics of the
Three Types of Buying Decisions
Straight
Rebuy
Modified
Rebuy
New Task
Newness of Problem or Need
Information Requirements
Information Search
Consideration of New Alternatives
Multiple Buying Influence
Financial Risks
Low
Minimal
Minimal
None
Very Small
Low
Medium
Moderate
Limited
Limited
Moderate
Moderate
High
Maximum
Extensive
Extensive
Large
High

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

22. Individual Factors Affecting the Buying Center

23. Summary