22-53 Flashcards
Define kickbacks and backdoor selling
Kickbacks?
Payments made to buyers based on amount of orders placed
backdoor selling?
Salesperson ignoring the purchasing agent’s policy and contact people directly involved in the purchase decision
Define and know the difference between puffery and misrepresentation.
Puffery: Opinions, customers can’t rely on statements
Misrep: Statements about inherent capabilities of products or services that can be treated as statements of facts (9 out of 10 times…)
Define business defamation, reciprocity, tying agreements, conspiracy and collusion
Business defamation
Unfair or untrue statements about competition, products, or salespeople
Reciprocity
Two companies agree to buy from each other
Tying
Required to purchase one product in order to get another (illegal unless can show necessity)
Conspiracy
Agreement between competitors before customers are contacted
Collusion
Competition working together while the customer is making a purchase decision
What is the difference between lubrication payments and subordination?
Lubrication: Small money or gifts to low-ranking officials
Sub: Larger payments to higher ranking officials
Define and provide examples of producers, OEM purchasers, end users, resellers, government agencies, institutions, and consumers.
What are producers?
Buy components to manufacture their own products to sell (A grain company purchasing wheat, oats, etc.)
OEM purchasers
Original equipment manufacturers: buy goods to use in making their products
(Already processed by another company - a computer company purchases different parts to go into a whole)
End users
When producers buy goods and services to support their own
-Paper towels, notepad, pens
Resellers
Buy finished products or service with the intention to resell them to business & consumers. Must consider: Profit margin, turnover, and effort to maximize their ROI (Walmart, etc)
Government agencies
Federal, local, state: The lowest bidder wins the contract. Goods and services valued at more than $1 trillion annually.
Consumers
Products and services for use by themselves or by their families (us)
Institutions
Public and private institutions; usually they have intense and well-defined purchasing procedures
-Churches, hospitals, colleges
Why is selling to an organization more complex than selling to a consumer?
Evaluations and negotiations, complexity is increasing, time to close, number of people required to sign off, availability of buyers
What are the eight steps in the organizational buying process?
- Recognition of need
- Definiton of product type needed
- Development of detailed specifications
- Search for qualified suppliers
- Acquisition and analysis of proposals
- Evaluation of proposals + selection of supplier
- Placing and receiving the order
- Evaluation of product performance
What is creeping commitment, and how can it aid the salesperson in the sales process?
Customer becomes increasingly committed to a course of action while going through the steps
Define new task buying, straight rebuys, and modified rebuys.
New Task buying:
When purchasing for the first time (usually equipment)
Straight rebuys
A customer buys the same product from originals source
Modified rebuys
Customer has purchased the product but is looking for new info
What role do the following play in the sales process – initiator, influencers, gatekeepers, users, and deciders?
Initiator: starts the process, can come from each of the other sources
Influencers: Directly/indirectly provide influence during the process
Gatekeepers: Control the flow of info and may limit alternatives considered
Users: Often not make the decision, some influence
Deciders: Makes final choice
What is a ‘lost for good’ customer and why can this be a goal for a salesperson?
Minimizing the chances of a poor decision by converting buying decision into straight rebuys. –> Routine decision
What is the communication process that we discussed in class? What is encoding and decoding?
Encoding (thoughts to words), message,
decoding (interpreting),
feedback (verbal/non)
What are three problems that can arise in a communication process?
- Original message unclear or poorly structured
- Emotional filter distorts the message (anger, bias, attention)
- Message not heard or wrongly interpreted
What are three things that ensure that communication is successful?
- Sender states message clearly
- message properly decoded
- Receiver pays attention and is not distracted
When is it appropriate to use industry terms/jargon?
In good and long standing relationships