Decision-Making UnitsThe group of individuals responsible for making a buying decision in a B2B context are labelled the decision making unit (DMU). Show
Learning Objectives Describe the roles and functions that comprise decision making units in B2B organizations Key TakeawaysKey Points
Key Terms
Decision Making Units In the business-to-business ( B2B ) context (as opposed to B2C), buying decisions are made in groups. The group responsible for making the buying
decision in companies is referred to as the decision making unit (DMU). Purchases: The decision making unit is responsible for an organization's buying decisions. For example, in the hi-tech sector, the decision making unit generally comprises the following roles:
Buying CentersA buying center is a group of people within an organization who make business purchase decisions. Learning Objectives Describe the different
functions and roles that comprise buying centers within B2B organizations Key TakeawaysKey Points
Key Terms
Buying Centers A buying center is a group of employees, family members, or members of any type of organization
responsible for finalizing major purchase decisions. In a business setting, major purchases typically require input from various parts of the organization, such as finance, accounting, purchasing, information technology management, and senior management. Highly technical purchases, such as information systems or production equipment, also require the expertise of technical specialists. In some cases the buying center is an informal ad hoc group, but in other cases, it is a formally sanctioned
group with specific mandates, criteria, and procedures. The employees that constitute the buying center will vary depending on the item being purchased.
Because of the specialized nature of computer and software purchases, many corporations use buying centers that are specialized for information technology acquisition. These specialized buying centers typically receive information about the technology from commercial sources, peers, publications, and experience. In this process, top management, the IT director, IT professionals, and
other users collaborate to find a solution.
Making Purchasing Decisions: The chairman of the Hong Kong Stock Exchange is an example of a member in an organization responsible for finalizing major purchase decisions. Buying SituationsB2B buying situations are relationship-oriented, pragmatic, and negotiable compared to the average B2C exchange situation. Learning Objectives Recognize the key differences in the buying situation between B2B and B2C sales Key TakeawaysKey Points
Key Terms
B2B v. B2CWhen considering different buying situations as a marketing professional, one of the first questions to ask is whether the goods are being provided to customers ( mass marketing B2C) or to other businesses (focused B2B). Selling to businesses usually requires a significantly different marketing approach, including differences in what the buying situation will be like. B2B Opportunities As a consumer base, businesses are a huge source of business in and of themselves. Selling to other businesses often has significantly higher transaction amounts (large volume), and the scale of the contracts can make marketing endeavors very cost-effective and profitable. Just as in B2C, attracting attention through
advertising, marketing, and direct sales is central to a successful marketing strategy. Buying Situations In order to understand how to market to another business, a simple first step is understanding how these types of clients approach the buying process. Business are quite different than single consumers in regards to buying strategies, often pursuing much larger contracts with much greater care. To understand the buying situations, it is useful to consider the decision-making process (spontaneity vs.
strategy), differences in pricing, payment approaches, repeat purchases, relationships, and the role of a purchaser at an organization. B2B Buyer Decision Map: B2B exchanges are often practically driven. They consider what the business needs, how they can fulfill that need, and why the seller is the optimal fit to do so. Stages of Business BuyingUnderstanding the stages of business buying is important to a marketing firm if it is to market its product properly. Learning Objectives Describe the different stages within the business buying decision process Key TakeawaysKey Points
Key Terms
Stages of the Business Buying Decision Process
Step 2: Develop product specifications to solve the problem
Step 3: Search for and evaluate possible products and suppliers
Step 4: Select product and supplier and order product
Step 5: Evaluate Product and supplier performance
This 5 step process is mainly used with new-task purchases and several stages are used for modified rebuy and straight rebuy. RisksBuying one can of soft drink involves little money, and thus little risk. If the decision for a particular brand of soft drink was not right, there are minimal implications. The worst that could happen is that the consumer does not like the taste and discards the drink immediately. Buying B2B products is much riskier. Usually, the investment sums are much higher. Purchasing the wrong product or service, the wrong quantity, the wrong quality or agreeing to unfavourable payment terms may put an entire business at risk. Additionally, the purchasing office / manager may have to justify a purchasing decision. If the decision proves to be harmful to the organization, disciplinary measures may be taken or the person may even face termination of employment. Risk and Return: Less risky investments yield less returns. The riskier the investment, the higher the yield. Measuring Vendor PerformanceFirms can measure vendor quality, service, availability, and overall reliability to determine future engagement with the vendor. Learning Objectives Describe the different tactics B2B companies use to search for and evaluate products and supplier performance Key TakeawaysKey Points
Key Terms
IntroductionDecision makers complete five steps when making a business buying decision:
Vendor performance measurement plays a role in Steps 3 and 5. Step 3: Search for and Evaluate Possible Products and SuppliersStep 3 requires searching for and evaluating possible products and suppliers. This can be done in several ways:
Step 5: Evaluate Product and Supplier Performance Step 5 of the business buying decision process involves evaluating product and supplier performance. Business Feedback Loop: Firms need to compare products with specifications. The results become feedback for other stages in future business purchasing decisions. Supplier performance evaluation teams are used to monitor activity and performance data, and to rate vendors. But supplier performance evaluation teams are just one of the many teams companies deploy to address tactical issues. Influences on Business BuyingEnvironmental, organizational, and interpersonal factors all impact the business buying decision process. Learning Objectives Give examples of how environmental, organizational, interpersonal, and individual factors influence the business buying decision process Key TakeawaysKey Points
Key Terms
Influences on Business BuyingFour main influences impact the business buying decision process: environmental factors, organizational factors, interpersonal factors, and individual factors. Environmental Factors Competitive conditions may enable a company's
short-term success, where the organization is able to operate irrespective of customer desires, suppliers, or other organizations in their market environment. Early entrants into emerging industries are likely to be internally focused due to few competitors. During these formative years, customer demand for new products will likely outstrips supply, while production problems and resource constraints represent more immediate threats to the survival of new businesses.
Organizations that fall victim to strategic inertia believe that one way is the
best way to satisfy their customers. Such strategic inertia is dangerous since customer needs as well as competitive offerings eventually change over time. IBM Cell Processor: IBM traditionally focused on large organizational customers. It did not put enough effort into small technology start-ups, which grew at a faster pace. Organizational FactorsOrganizational factors such as the company's objectives, purchasing policies, and resources can influence the buying process.The size and composition of the buying center also plays a role in the business buying decision process. Interpersonal FactorsThe interpersonal relationships between people working in the company's buying center can hinder the buying process. Buying center members need to trust each other and operate under full disclosure. Individual Factors The personal characteristics of people in the buying center can influence the
buying decision process. Individual factors including age, education level, personality, job tenure, and position within the company all play a role in how a person influences the buying process. Business Ethics in B2BMarketers need to incorporate good ethics in their marketing campaigns as they are responsible for the image that a product portrays. Learning Objectives List the pitfalls B2B companies face when ignoring ethics in market
research and target marketing, and the advantages to incorporating ethics Key TakeawaysKey Points
Key Terms
Business Ethics in B2BEthics refers to the moral principles that guide decision-making and strategy. Business ethics are, therefore, encompassed in the actions of people and organizations that are considered to be morally correct. Ethical objectives may include increased recycling of waste materials or offering staff sufficient rest breaks during their work shift. Businesses that adopt an ethical stance gain from numerous advantages, including:
In a B2B environment, the client is another business rather than the customer, which means more attention needs to be given to maintaining a two-way relationship between the two entities. Since business clients have more meticulous and specification-driven buying processes, and the company must ensure that needs are met at all times without taking actions that would be considered unethical. Ethics in Market ResearchEthical danger points in market research include invasion of privacy and stereotyping. Stereotyping occurs because any analysis of real populations needs to make approximations and place individuals into groups. However, if conducted irresponsibly, stereotyping can lead to a variety of ethically undesirable results.. Ethics in Market Research: Firms need to be careful not to use irresponsible stereotyping in the market research process. Ethics in Market Audience Ethical danger points in market
audience include (1) excluding potential customers from the market; selective marketing is used to discourage demand from undesirable market sectors or disenfranchise them altogether; (2) targeting the vulnerable, such as children and the elderly. Examples of unethical market exclusion or selective marketing are past industry attitudes to the gay, ethnic minority and obese ("plus-size") markets. Contrary to the popular myth that ethics and profits do not mix, the tapping of these markets has
proved highly profitable. For example, 20% of US clothing sales is now plus-size. Another example is the selective marketing of health care, so that unprofitable sectors, such as the elderly, will not attempt to take benefits to which they are entitled. A further example of market exclusion is the pharmaceutical industry's exclusion of developing countries from AIDS drugs. Customer Service as a Supplement to ProductsCustomer service is provided before, during, and after the purchase of a product, and is meant to supplement and enhance customer experience. Learning Objectives Give examples of how customer service supplement products and services Key TakeawaysKey Points
Key Terms
Customer Service to Supplement Products Customer service is the provision of service to customers before, during and after a purchase. Customer support refers to a range of services including assisting clients to make cost effective product choices and getting the most from their purchases. The process
includes assistance in planning, installation, training, trouble shooting, maintenance, upgrading, and disposal of a product. In the technology industry, where people buy mobile phones, televisions, computers, software products or other electronic or mechanical goods, customer service is called technical support. Customer Service Desk: Retail stores and organizations usually have a customer service desk or counter devoted to dealing with returns, exchanges, and complaints. Customer service may be provided by a person, such as a sales and service representative, or by automated means. An advantage with automated means is an increased ability to provide service 24-hours a day, which can complement in person customer service. Another example of automated customer service is touch-tone phone, which usually involves a main menu and the use of the keypad as options, for example "Press 1 for English, Press 2 for Spanish. " Licenses and AttributionsCC licensed content, Shared previously
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What is the term used for people who can influence a purchase decision and are opposed to the seller's company?influential adversaries: people who can sway a purchase decision and are opposed to the sellers company.
Which of the following is the first step in the planning process for making a sales call?The first step in the sales process is prospecting. In this stage, you find potential customers and determine whether they have a need for your product or service—and whether they can afford what you offer. Evaluating whether the customers need your product or service and can afford it is known as qualifying.
What is the most important part of opening a sales call?When you open your sales call, don't talk about you, your company, or your product. Instead, talk about what's of interest to your prospect. This is such an important part of opening your sales call that in our sales training, we call it the Affinity Rule.
What is the first step a salesperson should take when setting objectives for a sales call?The first step in setting objectives for a sales call is to review what has been learned from the organization's mission statement. All sales objectives should be either specific or measurable. Get better acquainted with the prospect" is a measurable sales objective.
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