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