Deck 4: Buying Behavior and the Buying Process

Question 1

Sally Brown, a purchasing agent, views her decision to buy chemicals used to clean the plant floors as a routine purchase decision. Assume you are a salesperson working for a chemical distributor from which Brown does not currently order. How would you try to make a sale to Brown

Answer 1

Selling is a process of making the customers to buy the products and services using several mediums like making salespeople to personally sell the products to the customers; using internet; using TV ads, radio ads etc. The firm explores all the possible mediums and retains the ones giving profitable results.
Ms. SB is a purchasing agent whose task is to routinely purchase chemicals for the plant floors. If it is assumed that Mr. is a salesperson who is not currently the seller of chemicals to SB but wishes to make a sale to the firm, then he could try to make a sale to SB by taking an appointment from her discussing products that could be sold to SB.
In this meeting, Mr. Y has to make Ms. SB informed about all the chemical products that the firm offers, its price, and its availability by comparing it with the competing products in the market. To make sale happen, Y has to mention all the possible benefits that SB's plant could avail by buying chemicals from Y so that this sale could take place positively.

Question 2

Under what conditions might loyalty to a supplier be economically efficient When might it be inefficient or wasteful

Answer 2

Vendor loyalty stand for the honesty and integrity that a vendor makes use of while selling the products to the sellers and making the entire selling and buying experience fair and reasonable for the buyer.
Vendor loyalty is important because unless the buyer will find large amount of genuinity and honesty in the seller and the products that he is selling, the customer will not remain loyal and stick to the seller for future purchases and this will create a loss for the vendor in terms of loss of customer and the related revenue from him. This calls for the high importance of vendor loyalty.
Example- A ski enthusiast went to the seller of ski equipments to buy products like a ski board, headgear, wrist and knee wear, goggle, ski-dress etc. In making a purchase, the seller gave genuine suggestions to the buyer related to the best product and brand that would be capable of serving the needs of the buyer. This made the entire buying experience of the buyer wonderful making him get loyal for the seller.
This example serves the importance of being loyal to the customers which makes the vendor to get good reputation and repeated buying from the same customer. If in case, the vendor has not shown loyalty and sold unreasonable products to the buyer, then this could had been resulted quite fatal for the buyer and a legal obligation for the seller.
To increase vendor loyalty, the vendor could motivate himself by reading the importance of being a good and fair vendor and apply the given principles into his selling techniques so that the vendor loyalty could be improved.
Vendor loyalty would be insufficient or wasteful when the buyer making the purchase is strong-headed and highly determined to buy a particular product even though if the vendor is suggesting a better product that is capable of serving the buyer's needs. In this situation, the vendor loyalty would be insufficient or wasteful.

Question 3

In Building Partnerships 4.1, Clorox's "employee analogy" is described. What are the benefits of the employee analogy to describe relationships with suppliers as compared to a marriage analogy or a partner analogy What are the drawbacks Why would an analogy be useful when talking to suppliers or others in your own firm

Answer 3

Analogy stand for the comparison that is undertaken between two things that are quite different from each other as it compares a complex subject with one that is quite simple and familiar.
Ms. C has suggested that to make suppliers and purchasing agents of the firm to perform excellently, both of these individuals have to support each other efficiently to achieve results and increase firm's productivity.
In this, the benefits the firm could obtain when employee analogy describing relations with suppliers is compared with a marriage analogy or a partners analogy is that in employee analogy, the firm could motivate employees to efficiently manage relations with the suppliers and buyer to derive more out of them; but when it comes to marriage analogy or partner analogy, the partners cannot pressurize each other to give their best for the relationship as it is all about emotional attachment that produces results in this analogy.
The drawbacks of employee analogy could be that when employee of a firm and the supplier of the firm gets connected very well with each other, then there could be chances of them duping the firm or having a fraudulent misrepresentation. The firm could be made to suffer loss if these people get along with each other having ill intentions.
An analogy would be useful when talking to suppliers or to others in the firm in a way that by having an exposure or comparison with different type of people having different approaches, an employee could learn great deal about having efficient communication and networking which could make the employee more productive and result-oriented.

Question 4

Mitchell's Metal Shop is considering the purchase of a new press, a machine that bends sheet metal. The cost is $10,000, which is about 25 percent of the firm's profit for the quarter. Ford Motor Company is also considering buying about 30 new presses. Discuss how risk is different for Frank Mitchell, owner of Mitchell's Metal Shop, and Ford.

Question 5

Y ou are selling a health care plan to a company. You attend a meeting of people in the company who will participate in the buying decision. Based on the following conversation , which type of buying center person do you think each individual is
"We need a health plan for our employees. The plan must have doctors who are close to where our employees work, not close to the plant." say Fred, the plant manager.
"I'll work with you to develop the specifications for the plan." offers Mark, the human resource director.
"I want to make sure that my doctor is covered under the plan," notes Rachael, a production supervisor.
"I will review the plan and let you know what my final decision is," says Shirley , the CEO.

Question 6

What would you do Do you lower your price or walk away Why Write out specifically what you would say next.

Question 7

Do buyers have to follow the same ethics principles as sellers For example, sellers have to fully disclose all information. Do buyers Why or why not What ethical principle violation occurred here

Question 8

What is the likely make-up of the buying center

Question 9

List the roles in the buying center, based on material in the chapter. What are they likely to want in extrusion equipment

Question 10

You know that the American Airlines has goals for purchasing from women-owned and minority-owned businesses (see From the Buyer's Seat in this chapter). You have a product that is innovative and patented, and will save the airlines like American upwards of 30% in fuel costs. But your business does not qualify as woman-owned or minority-owned because you are a white male, so you are thinking of bringing a partner into the business- your sister. Is this appropriate Or would it be better to license the product to an already certified minority-owned business

Question 11

What type of purchase situation is this What implications will that have if you are a salesperson selling extrusion equipment

Question 12

Will salespeople be necessary in the future Or will the i nternet take over Why or why not If you see limited application of the Internet, what conditions make purchasing (or selling) over the Internet worthwhile Does this vary for consumers compared to business buyers

Question 13

You are talking about this class to someone who isn't very familiar with business. When you mention you are studying how people make buying decisions and that this information will help you be a better salesperson, your friend says that you are just trying to learn how to manipulate people more effectively. How do you respond

Question 14

You sell equipment that bends metal pipes or tubes. List all of the products you can think of with bent metal pipes or tubes. Then list the markets from which your demand is derived. What factors are going to influence your business

Question 15

Assume you work for a division of 3M that makes medical monitoring systems. How would the purchasing decision process differ in the following situations Which situation is a new task A modified rebuy A straight rebuy How likely is the buyer to get other people in the organization involved Which types of people are likely to get involved in each decision Which situation is likely to produce the slowest decision

Question 16

Review each of the purchases in Question 3. What information would you need to conduct a value analysis for each Note, you will need some different and some similar information in each situation.

Question 17

A retail chain wants to buy new electronic cash registers. Which criteria for evaluating supplier proposals might be used by (a) the purchasing agent, (b) the engineering department, (c) the store manager, and (d) the head of the legal department How would this purchase differ from a purchase of cash registers by a company that sells store fixtures and equipment to small retailers