A purchaser buy a product or service for the first time. The greater cost or risk, the larger the number of participants and the greater their information gathering. New task buying is the marketer greatest opportunity and challenge. The process passes through several stages. They are: 1. Awareness
Systems Buying and Selling
Many business buyers prefer to buy a total solution to a problem from one seller. System buying – The practice that originated with government purchases of major weapons and communication systems. The contractor who has awarded the contract would be responsible for bidding out and assembling the system subcomponents from second tier contractor.
This is the prime contractor provides a turnkey solution. System Contracting – A single supplier provides the buyer with all required MRO supplies (maintenance, repair, and operating supplies). During the contract period, the suppliers managed the customer inventory. System selling is a key industrial marketing strategy in bidding to build large scale industrial project, such as dams, steel factories, irrigation systems, pipelines utilities, and even new towns. Participants in the Business Buying Process
Purchasing agents are influential in straight rebuy and modified rebuy situations whereas other department personel are more influential in new-buy situations. The Buying Center
Users or others in the organization who request that something be purchased
Those who will use the product or service. In many cases, the users initiate the buying proposal and help define the product requirement. 3. Influencers People who influence the buying decisions, often by helping define specifications and providing information for evaluating alternatives. Technical personel are particularly important influencers. 4. Deciders
People who decide on product requirement or on suppliers
People who authorize the proposed actions of deciders or buyers 6. Buyers
People who have formal authority to select the suppliers and arrange the purchase terms. Buyers may help shape product specifications, but they play their major role in selecting vendors and negotiating. In more complex purchases, buyers may include high-level managers 7. Gatekeepers
People who have the power to prevent seller or informations from reaching members of the buying center. For example, purchasing agents, receptionist, and telephone operators may prevent salespersons from contacting user or deciders. Buying Center Targeting
To target their efforts properly, business marketers need to figure out: Who are the major decision participant?
What decisions do they influence?
What is their level of influence?
What evaluation criteria do they use?
The business marketers is not likely to know exactly what kind of group dynamic take place during the decision process, although whatever information he can obtain about personalities and interpersonal factors are useful.
Stages in the Buying Process
1. Problem Recognation
The buying process begins when someone in the company recognizes a problems or need that can be met by acquiring a good or service. The recognation can be triggered by internal and external stimuli. Internal stimuli might be that the company decides to develop a new product and needs new equipment and materials or a machine breaks down and requires new parts. Externally, the buyer may get new ideas at a trade show, see and ad, or receive a call from a sales representative who offers a better product or a lower price.
2. General Need Description and Product Specification
The buyer determines the needed item’s general characteristics and required quantity. The buyer will work with others engineers, users, to define characteristics such as reliability, durability, or price. Business marketers can help by describing how their products meet or even exceed the buyer needs. The buying organization now develops the item’s technical specification.
Often, the company will assign a product value analysis engineering team to the project. Product value Analysis (PVA) is an approach to cost reduction that studies component to determine whether they can be redesigned or standardized or made by the cheaper methods of production. The PVA team will identify overdesigned components, for instance that last longer for the product itself.