7-1: Stage 3: RFP Process Request for
Proposal
RFPs enable the buyer to solicit pricing and other
information from a variety of suppliers and they
also allow suppliers to learn about the buyer and
its specific needs.
The web link on this page brings you to Fed
BizOps site exists for any firm that wishes to bid
on government contracts.
Potential suppliers can view the products/services
being sought.
7-2: Step 4: Proposal Analysis, Vendor
Negotiation, and Selection
Firms apply different strategies for vendor
selection:
Some always choose the lowest price, whereas
others apply more complicated selection criteria.
The government uses preferred contractor
programs, designed to offer small and
minority-owned firms greater opportunity.
7-3: Step 5: Order Specification After a vendor is chosen, terms of the contract
still need to be negotiated.
When these terms have been agreed upon, the
contract can be signed.
7-4: Step 6: Vendor Performance
Assessment Using Metrics
After the vendor has performed the service or
delivered the order, the buyer conducts a vendor
analysis to judge whether the vendor should
provide future purchases.
7-5: Check Yourself 1. Need recognition, Product specification,
RFP process, Proposal analysis and supplier
selection, Orders specification, Vendor
performance assessment using metrics
2. Vendor Analysis
The buying team develops a list of issues that
it believes are important to consider in the
evaluation of the vendor.
To determine how important each of these
issues (in column 1) is, the buying team
assigns an importance score to each (column
2). The more important the issue, the higher a
score it will receive, but the importance
scores must add up to 1.
In the third column, the buying team assigns
numbers that reflect its judgments about how
well the vendor performs.
To get the overall performance of the vendor,
in the fourth column, the team combines the
importance of each issue and the vendor’s
performance scores by multiplying them
together.
7-6: The Buying Center Group activity: Have the students diagram a
purchase situation that involves all of these roles.
The book uses the example of a doctor/patient
relationship, but many similar examples also
exist.
7-7: Wine Entrepreneur Ask students: How would you sell your product
for distribution in Costco?
Who might be in the buying center at Costco?
Note: Please make sure that the video file is
located in the same folder as the PowerPoint
slides.
7-8: Organizational Culture Different firms assign different ultimate
responsibility for purchase decisions.
Even within a firm, different buying groups have
unique buying styles.
Marketers must understand the dynamics of the
buying center to succeed.
Ask students to assume their family or the
household in which they live is a buying center.
Is it autocratic, consultative, or consensus when
making group buying decisions such as planning
a vacation or shopping for groceries?
7-9: Buying Situations As in B2C, different B2B buying situations
require different levels of effort and the
involvement of various parties.
The effort required by each situation varies.
Ask Students: Suppose you represented a private
label manufacturer of women’s apparel that was
selling to Target.
Think about the differences in the three buying
situations.
Which would be the easiest option for the apparel
salesperson to accomplish?
Which would be the hardest? Why?
7-10: New Buy In a new buy situation, a customer purchases a
good or service for the first time, which means
the buying decision is likely to be quite involved
because the buyer or the buying organization
does not have any experience with the item.
7-11: Modified Rebuy In a modified rebuy, the buyer has purchased a
similar product in the past but has decided to
change some specifications, such as the desired
price, quality level, customer service level,
options, or so forth.
7-12: Straight Rebuys Straight rebuys occur when the buyer or buying
organization simply buys additional units of
products that had previously been purchased.
7-13: Identify the Buying Situations Ask students to match the example to its type of
buying situation.
7-14: Check Yourself 1. The buying center, the buying
organization’s philosophy or corporate
culture, and the buying situation.
2. Buying roles include:
a. initiator, the person who first suggests
buying the particular product or service;
b. influencer, person whose views influence
other members of the buying center in
making the final decision;
c. decider, the person who ultimately
determines any part of or the entire
buying decision—whether to buy, what to
buy, how to buy, or where to buy;
d. buyer, the person who handles the
paperwork of the actual purchase;
e. user, the person who consumes or uses the
product or service; and
f. gatekeeper, the person who controls
information or access, or both, to decision
makers and influencers.
3. In a new buy situation, a customer
purchases a good or service for the first time,
the buying decision is likely to be quite
involved, and the buying center is likely to
proceed through all six steps in the buying
process and involve many people in the
buying decision. In a modified rebuy, the
buyer has purchased a similar product in the
past but has decided to change some
specifications, such as the desired price,
quality level, customer service level, options,
or so forth. Straight rebuys occur when the
buyer or buying organization simply buys
additional units of products that had
previously been purchased.
Additional Teaching Tips
This chapter exposes students to business-to-business markets, the buying process for b-to-b, and
factors affecting the buying process unique to B2B transactions. Students also learn the various
buying center roles.
While students are quite familiar with business-to-consumer markets, most are unfamiliar with
business-to-business markets. Students find it difficult to understand the buying process.
Students may have not heard the term “RFP” and also may not know how detailed order
specifications are and how they serve as a benchmark for RFP award. Instructors should spend
some time fully reviewing the segmentation categories.
An in-class exercise is to divide the class into groups and assign them to be a business (pet shop,
a fast food franchise, computer manufacturer, DVD store).
Have each group outline what would be included in each step of the business-to-business buying
process. Students can outline a few product specifications and write a brief RFP.
They can also list what they would seek in obtaining a supplier and use critical thinking skills to
develop two or three vendor/performance assessment points. Each group then could present their
business-to-business buying process to the class for discussion.
Online Tip: Use this exercise in a team setting where teams are assigned a business and have
them post their business-to-business buying process to the class on a public forum (post or
docShare). Have the other teams comment.
Instructors may want to go online to: http://www.census.gov/eos/www/naics/ and demonstrate
how this classification system is used as benchmarks when evaluating other businesses as
potential buying clients.
An in-class activity that students would find fun would be to divide the class into groups and
have them prepare a skit that demonstrates the various Buying Center roles. Students should
include all six roles in the skit that is presented to the class. Ask the “audience” to keep track on
a piece of paper who played the various roles. Have students jot down some marketing strategies
that may work in influencing the people in these various roles. This will provide active learning
as the students learn to recognize the various roles as their fellow students present their
respective group skit.