What is buyer relationship


what is buyer relationship

This article investigates the impact of personality traits and types and trust on sales outcomes between business-to-business buyers and sellers. A model is. Buyer supplier relationship. 1. Buyer Supplier Relationship; 2. Introduction Purchase supplier relationship –Purchase supplier satisfaction. The relationship between a supplier and buyer can be complex, says Sara Ireton, assistant vice president with JPMorgan, because "each party wants to.

The goods and services they source do not solely affect the procurement-realms, but the entire cooperation according to Easton, et al. Therefore, they must be selective, when deciding with whom to collude. Consequently, both sides need to endeavour to attract the best strategic partners. This hierarchical model is a six step instruction to reach the maximum potential in Buyer Supplier Relationship.

Accordingly, depending on categorisations, each supplier base has its own challenges, problems and risks, with regard technical, demand considerable, administrational terms, etc. As reported by Harland, et al.

Regardless the degree of power-resources, the parties are independent, nevertheless by having high power-resources, a strategic alliance and competitiveness can be built. In the same context, Gadde, et al.

In contrast, high-involvement-relationship is costly but gives higher revenues at the same time. Here, this alliance requires both parties to decide and converge to strengthen the Buyer Supplier Relationship. Bearing in mind, that high-involvement-relationship is related to resource-intensity, the buyers can only pay attention to limited contractors.

This relationship-positioning method oversimplifies the relationship, by separating the suppliers into certain categories and focus on the relevant ones.

what is buyer relationship

In Summary It is fundamental to have reliable, appropriate and cooperative partners, who are paying attention to opposite concerns and opinions, mutually trust and involve each other in business-processes.

Here, even if the purchasers have the greater leverage within the Buyer Supplier Relationship, they should be amenable for new ideas and innovation, suggested by their vendors who may offer Value Added Servicessince they are the party who have expertise and resources. While it is obvious that any incompatibility with respect to what the buyer wants and what the seller offers in a product or service will be detrimental to consummating a sale, it is more interesting and useful to identify dimensions and sources of content incompatibility.

Based on a recent model of individual choice behavior it is proposed that underlying buyer- seller expectations about a product or service, there lies a five dimensional utility space. The five dimensions represent different types of product-related utilities which the buyer desires and the seller offers to each other.

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Each type of utility is briefly described below: It represents products utility which is strictly limited to its performance and which defines the purpose of its existence and classification as a type of good or service. For example — the functional utility associated with an instant breakfast can be described in terms of taste, convenience, nutrition and calories. Similarly, the functional utility associated with a passenger car tire can be defined in terms of mileage, blow out protection, traction, handling and ride.

It is presumed to be a complex function of positive and negative expectations on multi-attribute profiles. We treat functional utility as one dimension of product utility and ignore for a moment the question of its own dimensionality. Sometimes a product or service acquires social-organizational connotations or imageries independent of its performance or functional utility. This is due to its consistent identification with a selective set of socioeconomic, demographic or organizational types.

Such identification with a selective cross-section of household or organizational buyers tends to impute certain utilities or disutility in the product or service producing imagery or a stereotype. For example, cigarettes are often consumed due to their social imagery even though they may be functionally harmful. Certain products are, therefore, used for their prestige and not so much their performance.

The existence of social-organizational utility in a product or service is also prevalent in organizational buyer behavior especially with respect to those products and services which are directly associated with the organization man. This is not surprising in view of the fact that there exists an organizational stratification of people working in organizations comparable to social stratification of households based on organization structure, hierarchy and power distribution.

The product or service has no intrinsic or independent utility and will not be offered or bought without the presence of circumstances which create its need. The situational, utility is often strong among those products or services which are consumed on an ad hoc basis rather than on a continuous basis.

For example — the utilization of the services of the priest for marriage ceremony or the lawyer for divorce proceedings tends to be non-repetitive by and large.

Similarly, a housewife may buy a product or service as a gift item due to a very specific situation or occasion such as graduation or marriage. Organizations often tend to use the services of professionals on an ad hoc basis because of a specific project.

Many of the capital expenditure items and highly specialized professional skills have greater degree of situational utility in them. It is extremely important to identify situations and activities which add to the utility of the product or service. Sometimes a product or service evokes strong emotive feelings such as respect, anger, fear, love, hate or aesthetics due to its association with some other objects, events, individuals or organizations.

The strong emotive feelings are therefore generalized to the product or service resulting in a different type of utility or disutility. For example — some Jewish buyers tend to refrain from buying German products because of strong emotional feelings they arouse as reminders of the German Nazi movement.

Similarly, many Hindus refrain from eating beef due to strong emotive feelings anchored in religious tenets. While one would expect less prevalence of emotive utility in organizational products or services than in household products or services, this is not borne out by empirical research.

Organizations also tend to manifest emotive behavior as is evidenced in international trade and cross-national negotiations. The fifth type of utility often present in both household and organizational products and services is related to novelty, curiosity and exploratory needs among individuals.

Introduction to Sales - Changes in the Buyer Seller Relationship

Based on the assumption man constantly seeks out new, different things due to either satiation with existing behavior or due to boredom inherent in highly repetitive tasks, certain new products or services acquire additional utilities which are not intrinsic to their performance. They have a very short life cycle and often degenerate as fads or fashions.

Style of Interpersonal Relationships: The vast literature on group dynamics and interpersonal relationships in small groups provides an excellent source to discuss the concept of style of interaction. It refers to the format, ritual and mannerism involved in buyer-seller interaction. While we will rely heavily on research in group dynamics, it is important to keep in mind that the dimensionalities of style of interaction discussed here are common to non-personal interactions such as via telecommunication or postal systems.

The style of interaction is presumed to be three dimensional. The specific dimensions are described below: This style of interaction is highly goal oriented and purposeful. The individual is most interested in the efficiency with which the task at hand can be performed so as to minimize cost effort and time.

Any activity during the interaction process which is either not task-oriented or inefficient is less tolerated by the individual who prefers the task-oriented style. The buyer or the seller who prefers this style of interaction often tends to be mechanistic in his approach to other people. The buyer or the seller who prefers this style of interaction believes in personalizing and socializing as an essential part of the interaction process.

In fact, preference for this style of interaction is often manifested at the loss or ignoring of the task at hand.

The buyer or the seller motivated by the interaction-oriented style is often compulsive in first establishing a personal relationship with the other person and then only getting involved in the specific content of interaction. He is more concerned about his own welfare and tends to have less empathy for the other person. The concepts of self-preservation, self-survival and self-emulation tend to dominate this style of interaction.

what is buyer relationship

Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement. This customer relationship management approach focuses more on customer retention than customer acquisition. Relationship marketing is designed to develop strong connections with customers by providing them with information directly suited to their needs and interests and by promoting open communication. Relationship marketing contrasts with transactional marketing, an approach that focuses on increasing the number of individual sales.

Most organizations combine elements of both relationship and transaction marketing strategies. Relationship Marketing is emerging as a new phenomenon however; relationship oriented marketing practices date back to the pre-Industrial era. We trace the history of marketing practices and illustrate how the advent of mass production, the emergence of middlemen, and the separation of the producer from the consumer in the Industrial era led to a transactional focus of marketing.

Now, due to technological advances, direct marketing is staging a comeback, leading to a relationship orientation. With the evolution of Relationship Marketing, the hitherto prominent exchange paradigm of marketing will be insufficient to explain the growing marketing phenomena of collaborative involvement of customers in the production process.

An alternate paradigm of marketing needs to be developed that is more process rather than outcome oriented, and emphasizes value creation rather than value distribution.

Sales Presentation in Business Marketing: It will often include a demonstration of the product. Sales Presentation Tips and Techniques: Presentations have a way of leaving a legacy long after your presentation has ended. This might mean referral business later; also the quality of your presentation will impact how your boss and any other colleagues view you and your abilities.

This may affect future assignments of your choice and even your promotion prospects. Make the Presentation Relevant to your Prospect: One of the most common mistakes people make when discussing their product or service is to use a generic presentation. They say the same thing in every presentation and hope that something in their presentation will appeal to the prospective customer.

The discussion of your product or service must be adapted to each person; modify it to include specific points that are unique to that particular customer. Show exactly how your product or service solves their specific problem.

This means that it is critical to ask your prospect probing questions before you start talking about your company. In a presentation to a prospective client, try to prepare a sample of the product they would eventually use.

After a preliminary discussion, hand your prospect the item they will be using — instead of telling them about the item, place it in their hands to see exactly what the finished product looks like and so they are able to examine it in detail. They are then able to ask questions to see how their organisation would use it in their environment. Also, remember to discuss the benefits of your products, not the features.

Tell your customer what they will get by using your product versus your competitors. Get to the Point: Know what your key points are and learn how to make them quickly. Make sure you know what key points you want to discuss and practice verbalizing them before you meet with your prospect. The majority of sales presentations are boring and unimaginative. If you really want to stand out from the crowd make sure you demonstrate enthusiasm and energy. Use your voice more effectively and vary your intonation.

A common mistake made when people talk about a product with which they are very familiar is to speak in a monotone voice. This causes the other person to quickly lose interest in your presentation. This will allow you to hear exactly what you sound like as you discuss your product.

Use a Physical Demonstration: This unusual approach never fails to create impact with the customer but ensure that your writing is clear and legible and that you draw pictures and illustrations that can impress the client with their level of proficiency. Just as writers develop an outline for an article, or story book, it is critical for you to develop a framework. This framework relates to the sections that you will be presenting to your prospect. The following framework works well if you have about 45 minutes to present.

You can reduce or increase the amount of time around each section, but spend most of the total time talking and asking questions about them and getting them to tell you what is important to their organization. Negotiation is a strategic discussion that resolves an issue in a way that both parties find acceptable. In a negotiation, each party tries to persuade the other to agree with his or her point of view. Many offers that people assume to be firm and final are actually flexible. For example, negotiation can be used to reduce debts, to lower the sale price of a house, to get a better deal on a car or to improve the conditions of a contract.

Negotiation is an important skill when accepting a new job. Negotiating a job offer is particularly important because all future increases in compensation will be based on the initial offer. Sales negotiation is a process that involves the deliberation of all details necessary to successfully complete a sale.

As part of this type of negotiation, a salesperson engages directly with a customer, assessing the needs of the client, pointing to the advantages the customer stands to gain, and helping the customer see how purchase of the goods or services offered would be a wise decision. The ultimate goal of any sales negotiation is to earn the business of the customer, satisfying the expectations of the customer to the point that he or she will be willing to consider making future purchases of the goods or services offered, and complete the sale with terms and conditions that are considered beneficial to all parties involved.

It is important to note that a sales negotiation can be a very formal process that is carefully crafted, or it can occur in a situation that takes place unexpectedly.

Some negotiations are very informal, whiles others are highly structured. In many cases, the negotiation phase of the sales process will rely on the use of a few carefully employed strategies, although the exact expression of those strategies are often adapted to fit the circumstances surrounding the negotiation.

For example — a sales negotiation may follow after a formal presentation to the potential customer. The presentation may include any number of visual aids, including video streamed over an Internet connection.

Once the salesperson has a sense that the customer has received enough knowledge to see the value and at least some applications for the product, the negotiation can begin. This will often involve exploring more possible applications, identifying the costs associated with the use of the product, taking care to call attention to savings of time and money that the customer can reasonably anticipate by using the product.


From there, the negotiation moves on to settling on the pricing for the product, and the mutual agreement on the terms of the contract that will govern the newly established relationship between the buyer and the supplier.

Most sales training programs will spend a significant amount of time helping new salespeople hone their ability to engage in effective sales negotiation. While the training varies from one program to another, most will include tips on how to efficiently evaluate the potential customer, identify his or her most pressing needs and use the data in a manner that convinces the customer to make a commitment and purchase the product or service offered.

While some forms of sales negotiation focus a great deal on price, other factors such as quality, customer support, and timely delivery of the goods or services are also often employed as part of the tools in the negotiation process.

How to Negotiate a Sale? Before the negotiation begins, prepare yourself; aim to appear keen to do the deal but not desperate.

Buyer-Seller Relationships - Industrial Marketing | Textbooks | Chapters

Clarify your objectives e. Find out what the customer wants. What features or extras do they value and what are their priorities — price, service or delivery? Assess the value of your offering to the customer: Identify the strengths and weaknesses in your proposal and plan your strategy; aim to reach a deal which will suit the customer as well.

what is buyer relationship

Decide what could be negotiable; try to identify concessions which would cost you little but which the customer would value. Consider the potential impact on other deals and other customers of any concessions you make.