SELLING BUSINESS TO BUSINESS SUCCESSFULLY. UNDERSTANDING WHAT MAKES BUYERS BUY
THE THEORIES OF BUYER MOTIVATION
BUYING DETERMINATES THEORY
THINK: WHAT FACTORS AFFECT THE BUYER?
ROLE THEORY
THINK: WHAT ROLE IS A BUYER PLAYING?
BEHAVIOR CHOICE THEORY
THINK: WHAT STEPS WILL A BUYER TAKE?
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4-*Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display4-*Chapter 4OrganizationalBuyer BehaviorMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*SELLING BUSINESS TO BUSINESS SUCCESSFULLY. UNDERSTANDING WHAT MAKES BUYERS BUYTHE THEORIES OF BUYER MOTIVATIONBUYING DETERMINATES THEORYTHINK: WHAT FACTORS AFFECT THE BUYER?ROLE THEORYTHINK: WHAT ROLE IS A BUYER PLAYING?BEHAVIOR CHOICE THEORYTHINK: WHAT STEPS WILL A BUYER TAKE?McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*BUYING DETERMINANTS THEORYIndividualfactorsOrganizationalfactorsMarket factorsEnvironmental factorsExhibit 4-1McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*BUYING CENTER ROLES PERSONSecretaryVice PresidentOffice ManagerSecretary & Office ManagerOffice ManagerVice President of Operations ROLEInitiator-reports that fax keeps breaking downController-sets budget for purchase of new faxGatekeeper-gathers review from vendors.Influencers-view demonstrations narrow choicesRecommender-recommends a particular product to decision makerDecision Maker – Selects fax to purchaseMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*DIMENSIONS OF BUYING CENTERSTIME DIMENSIONSTIME IS HIGHLY FRAGMENTED: Many participants for short time participationTIME IS NOT FRAGMENTED: Same people stay through entire processVERTICAL DIMENSIONSHow many layers of management are involved in decision-makingHORIZONTAL DIMENSIONSHow many departments are involved in decision-makingFORMALIZATION DIMENSIONPurchasing tasks and roles are guided and enforced by written procedures and policiesMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*TIME FRAGMENTATION INFLUENCES SELLER’S MARKETING EFFORTSINVOLVEMENT INFLUENCENUMBER OF DECISION MAKERSHIGHLYMANY FEWMINIMALLYFRAGMENTEDA LITTLE A LOTFRAGMENTEDDECISION CYCLE TIME INFLUENCESIZE OF BUYING CENTERLONGER LARGE SMALL SHORTERDECISION CYCLE A LITTLE A LOT DECISION CYCLE EXPERIENCE OF DECISION MAKERSTIME SPENT ON DECISION STAGESSales objective is to move to the right on the continuumMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*RECOGNIZING THEBUYER’S DILEMMA: RISKTHERE ARE THREE KINDS OF RISK TO OVERCOMEFINANCIAL RISK POTENTIAL FOR LOST REVENUE WITH FAULTY PRODUCTPERFORMANCE RISKPRODUCT WON’T PERFORM AS INTENDEDSOCIAL RISKTHE PURCHASE WILL NOT MEET APPROVAL OF A REFERENCE GROUPMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*OVERCOMING RISKTHREE OPTIONS BUYERS USE TO REDUCE RISKGATHER MORE INFORMATION FROM MORE SOURCESUSING LOYALTY TO PRESENT SUPPLIERS—BUILD TRUSTSPREAD THE RISK BY USING MORE DECISION MAKERS OR GETTING MORE SUPPLIERSMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*USING INFORMATION TO REDUCE RISKSOURCES OF INFORMATIONImpersonalPersonalTrade publicationsWord of mouth from colleagues, consultants, and coworkersNoncommercialSales literatureAdvertisingWebsitesDirect mailPersonal sellingTrade showsTelemarketingE-mailCommercialEXHIBIT 4-54-*BEHAVIOR CHOICE MODELIDENTIFY SITUATION Company and self-orientationEVALUATE PERSONAL RELEVANCE Determine RewardsASSESS ACTION ALTERNATIVES AN REQUREMENTSCHOOSE A BEHAVIOR STRATEGY Defensive or OffensiveEXHIBIT 4-6McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved4-*EXPANDED BUYING DETERMINANTS THEORYMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reservedOrganizational FactorsExtrinsic reward systemsRole expectationsCorporate culture andintrinsic rewardsCross-functionalpurchasing teamsPolicies supportingvertical and horizontaldimensionsIndividual factorsExperience: new buy straight rebuyChoice of reward-Role orientationValence of rewardProbability perceptionsEnvironmental factorsMarket factorsOrganizational FactorsIndividual factors