Module 3

What are buying centers?

The group responsible for making the buying decision in companies is referred to as the decision-making unit (DMU) or the buying center

Identify all the stakeholders in the buying process. Identify each of them with their unique characteristics- 1

Initiators- These are the people within the organization who first see the need

for the product. But they do not stop there; whether they can make the final

decision of what to buy or not, they start the process. Sometimes they initiate

the purchase by simply notifying purchasing agents of what is needed; other

times, they must lobby executives to consider making a change.

Identify all the stakeholders in the buying process. Identify each of them with their unique characteristics- 2

Users- These are the people and groups within the organization who actually

use the product. Frequently, one or more users serve as an initiator in an

effort to improve what they produce or how they produce it, and they

certainly have the responsibility for implementing what is purchased. Users

often have certain specifications in mind for products and how they want

them to perform

Identify all the stakeholders in the buying process. Identify each of them with their unique characteristics- 3

Influencers- People who may or may not use the product but have experience

or expertise that can help improve the buying decision

Identify all the stakeholders in the buying process. Identify each of them with their unique characteristics- 4

Gatekeepers- You will first have to get past several gatekeepers, or people

who will decide if and when you get access to members of the buying center.

These are people such as buying assistants, personal assistants, and other

individuals who have some say about which sellers are able to get a foot in

the door. Gatekeepers often need to be courted as hard as prospective

buyers do and generally have a lot of information about what is going on

behind the scenes and a certain amount of informal power.

Identify all the stakeholders in the buying process. Identify each of them with their unique characteristics- 5

Decision Makers- The decision maker is the person who makes the final

purchasing decision. The decider might or might not be the purchasing

manager. Purchasing managers are generally solely responsible for deciding

upon routine purchases and small purchases. However, the decision to

purchase a large, expensive product that will have a major impact on a company is likely to be made by or with the help of other people in the

organization, perhaps even the CEO.

Identify all the stakeholders in the buying process. Identify each of them with their unique characteristics- 6

Buyers- Buyers are the people who sign the contract. They differ from the

decision maker in that they are focused on the financial aspects of the

purchase and how the purchase can positively impact organizational metrics.

The buyer makes the selling transaction with the seller

B2B

a. Markets to individuals acting on behalf of an organization.

b. More task oriented

c. Spend more money

d. More complex and lengthy

B2C

a. Targets individuals

b. Emotional factors play a role

c. Less task oriented

d. Look at cost, use, productivity and quality.

What is the first stage in the organizational buying decision process?

Organization realized the need for a good or service users often initiate this stage.

What is the second stage in the organizational buying decision process?

Stage 2 define the Need- stake holders define the product with detailed specifications. usually involves users and initiators.

What is the third stage in the organizational buying decision process?

stage 3 search for suppliers- search for info about vendors and products. Usually involves purchasing agents.

What is the fourth stage in the organizational buying decision process?

Stage 4 Bid Analysis- the buyer sends out an RFP to multiple vendors. Each vendor provides a detailed proposal for review by the buyer.

What is the fifth stage in the organizational buying decision process?

Stage 5 supplier Selection- RFPS are reviewed and the vendors is chosen. Negotiations for price and other aspects of the deal take place.

What is the sixth stage in the organizational buying decision process?

Stage 6- Order Placement. order is typically placed electronically. Orders ca be one transaction or continuous.

What is the seventh stage in the organizational buying decision process?

Stage 7- Performance Review. Buyer surveys quality an satisfaction levels. Not all poor performance is the fault of the vendor.

What are the factors that influence B2B buying behavior? 1

Individual Factors—B2B decisions are influenced by the characteristics of the

individuals involved in the selection process. A person's job position, tenure,

and level in the organization may all play a role in influencing a purchasing

decision. Additionally, decision makers' relationships with peers and

managers could lead them to exert more—or less—influence over the final

selection.

What are the factors that influence B2B buying behavior? 2

Organizational Factors—Purchasing decisions, especially big-ticket

expenditures, may be influenced by the organization's strategies, priorities,

and performance. Generally, the decision makers and the providers

competing for the business must present a compelling explanation for how

the new purchase will help the organization become more effective at

achieving its mission and goals.

What are the factors that influence B2B buying behavior? 3

Business Environment—B2B purchasing is also influenced by factors in the

external business environment. The health of the economy and the

company's industry may determine whether an organization chooses to move

ahead with a significant purchase or hold off until economic indicators

improve. Competitive pressures can create a strong sense of urgency around

organizational decision-making and purchasing.

Transactional relationship

each sale is a separate exchange and the two parties have

little or no interest in maintaining a relationship.

Functional relationship

limited, ongoing relationships that develop when a

buyer continues to purchase a product from a seller out of habit, as long as

its needs are met.

Affiliative selling relationship

likely to occur when the buyer needs a

significant amount of expertise from the seller and needs to trust that the

seller will use his or her best judgment when providing information so the

business can make right decisions

strategic partnerships

those in which both the buyer and seller commit time

and money to expand "the pie" for both parties. This level of commitment is

often likened to a marriage

Identify the form of relationship that will form between two companies based

on the product sold: Printing paper

Functional relationship

Suppliers selling parts to Boeing for the Dreamliner

Strategic partnership

A company selling fraud detection software to a mid-sized Bank.

Affiliative selling relationship