Podcast
Questions and Answers
Which type of need reflects the desire for acceptance and social connections?
Which type of need reflects the desire for acceptance and social connections?
What best describes the psychological needs of buyers?
What best describes the psychological needs of buyers?
Which strategy is NOT considered a form of content marketing?
Which strategy is NOT considered a form of content marketing?
What does the multiattribute model primarily evaluate?
What does the multiattribute model primarily evaluate?
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During which phase do firms request proposals from potential suppliers?
During which phase do firms request proposals from potential suppliers?
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What are must-have attributes in a product?
What are must-have attributes in a product?
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In which type of purchasing decision is the newness of the problem or need considered high?
In which type of purchasing decision is the newness of the problem or need considered high?
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What characterizes the purchasing decision type known as Modified Rebuy?
What characterizes the purchasing decision type known as Modified Rebuy?
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Which attribute primarily describes the expectation of what a product does?
Which attribute primarily describes the expectation of what a product does?
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Which communication style is characterized by high assertiveness and low responsiveness?
Which communication style is characterized by high assertiveness and low responsiveness?
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Salespeople should adapt their communication style primarily to enhance what?
Salespeople should adapt their communication style primarily to enhance what?
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How is the sociability of an individual with an amiable communication style best described?
How is the sociability of an individual with an amiable communication style best described?
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What is the primary information search requirement in a Straight Rebuy purchasing decision?
What is the primary information search requirement in a Straight Rebuy purchasing decision?
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Which product has the longest durability based on the information provided?
Which product has the longest durability based on the information provided?
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What is the primary benefit of using a multiattribute model for evaluating suppliers and products?
What is the primary benefit of using a multiattribute model for evaluating suppliers and products?
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How does Holdstrong #99 rank in 'Ease of application' based on the evaluation?
How does Holdstrong #99 rank in 'Ease of application' based on the evaluation?
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Which factor received the highest score for QuickAd #55 in the overall evaluation?
Which factor received the highest score for QuickAd #55 in the overall evaluation?
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What is a common strategy to enhance selling strategies when evaluating buyers?
What is a common strategy to enhance selling strategies when evaluating buyers?
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Which product has the best reliability score according to the evaluation?
Which product has the best reliability score according to the evaluation?
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What is the quoted price of ConnectFast #317?
What is the quoted price of ConnectFast #317?
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What is the significance of shelf-life in storage for these products?
What is the significance of shelf-life in storage for these products?
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Study Notes
Go to Market Strategies - Chapter 3: Understanding Your Buyer
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Types of Buyers:
- Consumer market: A market where customers buy goods and services for their own use or consumption.
- Business market: Firms, institutions, and governments acquiring goods and services. Used as inputs in manufacturing, daily operations, or for resale.
Characteristics of Business Markets
- Concentrated Demand: Demand within business markets is often focused or concentrated.
- Derived Demand: The demand in business markets is directly linked to the demand for consumer goods.
- Higher Levels of Demand Fluctuation: Business market demand tends to fluctuate more significantly than consumer demand. Increases or decreases in consumer market demand lead to corresponding changes (acceleration) in business market inventory/plant capacity.
- Purchasing Professionals: Companies employ professionals with specialized knowledge in procurement.
- Multiple Buying Influences: Decisions are often made by multiple people within a company.
- Collaborative Buyer-Seller Relationships: Strong relationships exist between buyers and sellers.
- Supply Chain Management: This involves strategically coordinating purchase activities, and integrating internally and externally to manage the product/service flow throughout the supply chain. Raw components to end users.
The Buying Process
- Recognition of the problem or need: The process starts with identifying a need or problem.
- Determination and description of product/service characteristics: Specifying the needed characteristics of the product or service is part of this step. Including the quantity required.
- Search for and qualification of potential sources: Finding and evaluating potential suppliers are essential.
- Acquisition and analysis of proposals: Gathering and analyzing bids/proposals from suppliers is common.
- Evaluation of proposals and selection of suppliers: Comparing different proposals/suppliers is essential.
- Selection of an order routine: Selecting how the order will be placed (a routine).
- Performance feedback and evaluation: Evaluating the outcome of the purchase (process) is vital.
The Needs Gap
- Desired State: Ideally desired product output, like 1250 units per day.
- Actual State: Current product output level, like 1000 units per day.
- Gap/Need: The difference between the desired and actual state, in this example 250 units per day.
- Desired states: A state of being based on what the buyer desires
- Actual states: A buyer's actual state of being
- Needs gap: A perceived difference between a buyer's desired and actual state of being.
Buyer Needs (Phase 1)
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Five basic needs:
- Situational: Needs affected by time, place, and environment
- Functional: Needs concerning core tasks or functions performed by the product
- Social: Needs associated with acceptance and relationships with others
- Psychological: Needs like assurance, risk reduction, and emotions such as fun/excitement
- Knowledge: Needs concerning personal development, information, why and how.
Buyer Needs (Phase 2 and 3)
- Phase 2: Determination of product/service characteristics (quality) required
- Phase 3: Describing the characteristics and quantity of the product/service
Buyer Needs (Phase 4 and 5)
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Phase 4: Searching for and qualifying potential sources
- Content marketing is a crucial aspect where relevant and valuable information is created and shared to attract and retain customers. Different communication channels include salespeople, trade associations, trade shows, product sources directories, and the Internet.
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Phase 5: Acquisition and Analysis of Proposals
- Request for Proposal (RFP): A form that firms distribute to qualified potential suppliers to develop and submit proposals
Evaluating Suppliers and Products
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Multiattribute model: A procedure for evaluating suppliers and products that weighs different characteristics.
- Weighting takes into account the importance (to the buyer) of each characteristic.
- Assesses how well the product or supplier meets the specified characteristics.
Important Product Information (Exhibit 3.4)
- Specific data for different brands (products) regarding ease of application, bonding time, durability, reliability, nontoxicity, price, Shelf life...etc.
Performance Evaluation (Exhibit 3.6)
- Presents the Weighted Average performance scores across all characteristics considered for different products.
Enhancing Selling Strategies
- Adapting the selling approach to align with the buyer's evaluation procedures.
- Modifying product offerings, altering beliefs about the offered product.
- Altering beliefs about competitor offers.
- Adjusting/altering importance weights.
- Highlighting neglected attributes and features.
Phases of Evaluation (Phase 6-8)
- Phase 6: Evaluating proposals and selecting suppliers
- Phase 7: Selecting an order routine
- Phase 8: Feedback and evaluation of performance
Discussion Activity
- Discusses advantages of using the multiattribute model for supplier evaluation.
- Analyzing the importance of factors when no single product/supplier stands out.
Two-Factor Evaluation Model of Purchase
- Functional attributes: Basic function or performance of the product. (e.g, how much product the machine can produce per day).
- Psychological attributes: Factors beyond basic performance such as customer relations or responsiveness.
- Must-have attributes: Essential features of a product or service.
- Delighter attributes: Additional features that exceed expectations. (e.g., a quick satisfaction response or guarantee).
Buying Decision Types
- Straight Rebuy: A routine repurchase decision with minimal effort.
- Modified Rebuy: A slightly less routine purchase decision, with moderate effort
- New Task: A new or complex purchase decision, which is an extensively researched decision.
Engaging Customers (Phase 9 & 10)
- Insight selling: Anticipate customer needs to better meet future demands. Improve technology adoption to enhance effectiveness and efficiency of the buying process.
- Technology utilization: Employing technology for automated transactions, CRM systems...etc.
- Buyer expectations: Buyers expect value-added solutions from salespeople.
- Comprehensive knowledge: Comprehensive understanding of product details, competitive products and customer needs.
- Problem resolution: Handling product-related problems after the sale.
Buying Teams
- Buying Teams: Groups from various departments throughout a company working toward a common purchase goal including several roles like initiators, gatekeepers, influencers, deciders, purchasers, users, and their respective tasks.
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Description
Explore Chapter 3 of 'Go to Market Strategies', delving into the diverse types of buyers and the distinct characteristics of business markets. Understand how consumer demand influences business purchasing and the role of procurement professionals in different market structures.
