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Transcript of CHAPTER 4 ACCOUNT RELATIONSHIP MANAGEMENT. ORGANIZATIONAL PURCHASING PROCESS u Need Recognition u...
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CHAPTER 4CHAPTER 4
ACCOUNT RELATIONSHIP MANAGEMENT
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ORGANIZATIONAL ORGANIZATIONAL PURCHASING PURCHASING PROCESSPROCESS
Need Recognition Specifications Search for Suppliers Proposals Supplier Selection Performance Evaluation Repeat Purchases
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NEED RECOGNITIONNEED RECOGNITION
Problem identification Needs recognized
internally externally derived demand
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SPECIFICATIONSSPECIFICATIONS
Defining characteristics and quantity of items to be purchased
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SUPPLIER SEARCHSUPPLIER SEARCH
Purchasing department responsibility (usually)
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ACQUISITION OF ACQUISITION OF PROPOSALSPROPOSALS
Bid process Systems selling
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SUPPLIER SELECTIONSUPPLIER SELECTION
Buying Centers Marketing Manufacturing Research and Development General Management Purchasing
Buying Criteria
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PERFORMANCE PERFORMANCE EVALUATIONEVALUATION
Value analysis Focus on total costs (invoice,
possession and acquisition costs) Vendor analysis
Focus on vendor’s performance (delivery, reliability, quality, price, service, technical competence)
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REPEAT PURCHASESREPEAT PURCHASES
Straight rebuys Modified rebuys New task
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BUYING CENTERBUYING CENTER
“All people involved in the buying decision”
Includes: Economic Buyer User Buyer Technical Buying Influence Advocate/Coach
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ECONOMIC BUYERECONOMIC BUYER
Role: Gives final approval Characteristics: Has access to
money, can release money, veto power
Focus: Total organization, bottom line
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USER BUYING USER BUYING INFLUENCEINFLUENCE
Role: to decide on how a purchase will affect job performance
Characteristics: Use or supervise use of product or service
Focus: The job to be performed
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TECHNICAL BUYING TECHNICAL BUYING INFLUENCEINFLUENCE
Role: To eliminate alternatives Characteristics: Focuses on
quantifiable aspects of product and service; can only say “no” not “yes”
Focus: Product Specifications
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ADVOCATE/COACH ADVOCATE/COACH INFLUENCEINFLUENCE
Role: Helps guide the sale Characteristics: May be inside
or outside the organization; furnishes and interprets information
Focus: Your success
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BUILDING BUILDING RELATIONSHIPSRELATIONSHIPS
Awareness Exploration Expansion Commitment Dissolution
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AWARENESSAWARENESS
Recognition that a supplier is a viable source
Selling Objectives gain attention demonstrate how needs can be
satisfied
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EXPLORATIONEXPLORATION
Parties feel that a possibility of mutual benefit exists; limited commitment and trial.
Selling Objectives gain initial acceptance build a successful relationship
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EXPANSIONEXPANSION
Parties have experienced benefits of relationship and want expanded interaction
Selling Objectives: Get to know customer better Look for additional ways to help
client
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COMMITMENTCOMMITMENT
Establishing a sole or nearly sole supplier relationship
Selling Objectives early supplier involvement in
need process long term focus to relationship multi level interaction
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DISSOLUTIONDISSOLUTION
Decision to limit or leave relationship
Selling Objectives: look for warning signals attempt to reinitiate the
relationship
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DISSOLUTION--DISSOLUTION--WARNING SIGNSWARNING SIGNS
Missing information Uncertainty about information Uncontacted buying influence New personnel to job Reorganization
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ENHANCING ENHANCING RELATIONSHIPSRELATIONSHIPS
Value Expectations Bargaining Trust
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VALUEVALUE
Perception that rewards exceed costs
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EXPECTATIONSEXPECTATIONS
Standards of conduct and performance are established
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BARGAININGBARGAINING
Willingness to negotiate each party’s obligations.
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TRUSTTRUST
Belief that an individual’s word can be believed and will be fulfilled
Trust based on likeability competence dependability honesty customer orientation
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FROM THE INTERNETFROM THE INTERNET
Relationship Management in Action--The Alleris Group, Inc.
<http://www.alleris.com/> Look at the Relationship
Management Challenge Questionnaire
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FROM YOUR TEXTFROM YOUR TEXT
Read all of Chapter 4, pages 168-184