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There is a notable difference between selling to companies and private
individuals. Below is an angle of approaches to the business customer market.
Characteristics
Business customer market characteristics:
- Few buyers in relation to total number of consumers
- Large-scale orders
- A relationship between buyer and seller can be established
- Potential customers are easy to single out/segment
- More persons are involved in a purchase
- Professional purchasing methods based on information and rationality
- Focus is on price and cost-saving
Purchase Methods
Three pervading purchasing principles applied by companies:
- Straight re-buy - you buy the same as usual. Usually office supplies,
coffee, etc.
- Substantial repurchase - before buying, you consider whether the
requirement, design, or technology has changed since last time. This could
be PCs, courses, or technological equipment.
- New purchase - you want to check the market for the most favourable offer
meeting the requirements set out by the company
Example
A new purchase or repurchase in the producer market can be illustrated in terms
of a company wanting to replace their warehouse door.
1) Problem identification
The company identifies its problem: We need a warehouse door, or: Our main
warehouse door is defective. Will the budget allow a purchase?
2) Determination of requirement characteristics
The company defines its requirement: Should the door be manually operated? Or
should it be automatically activated by photocells?
3) Product specifications
The company determines the type of door needed: Size? Metal or another material?
4) Tracking down potential suppliers
The company checks their supplier file: Where did we get the existing door? Or:
Who supplies warehouse doors?
5) Making analysis and obtaining quotations
The company may ask you and other potential suppliers to come and take
measurements for the door. The company requests a quotation for the delivery of
the door, and may also ask you to state references.
6) Evaluation and negotiation of quotation and choice of supplier
The company compares the quotations received: Which one is the cheaper? The
expensive? Will we get value for money? Advantages and disadvantages? Any
guarantee that you or another supplier will be able to carry out the task
proficiently?
7) Placing an order
The company chooses a supplier and rejects those not chosen.
8) Check ups on supplier and delivery
The company follows up on its order: Will you be able to deliver the door on
time? The company tests whether the door functions according to their order.
A similar process would be applied if the company were to commission a large
translation project, a company progress report, or implementation of a new
accounting system.
Of course if the manager is your uncle you might not have to go through all
these steps.
- Go to next
business issue: Realistic Number of Customers
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| Joe Carpenter, USA |
28-11-2009 |
Not all purchasing agents are that structured as explained above. Still they are not as emotional as consumers.
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Copyright © 2009 Dynamic Business Plan 05-02-2012
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