Systems Buying and Selling

Many business buyers prefer to buy a packaged solution to a problem from a single seller. Called systems buying, this practice began with government buying of powerful weapons and communication systems. Instead of buying and putting all the components together, the government asked for bids from suppliers that would supply the components and assemble the paekage or system.

Hellers have increasingly recognized that buyers like this method and have adopted systems selling as a marketing tool,"Systems selling is a two-step process. First, the supplier sells a group of interlocking products: for example, the supplier sells not only glue, but also applicators and dryers. Second, the supplier sells a system of production, inventory control, distribution and other services to meet the buyer's need for a smooth-running operation.

Systems selling is a key business marketing strategy for winning and holding accounts. The contract often goes to the firm that provides the most complete system meeting the customer's needs. Consider the following:

The Indonesian government requested bids to build a cement factory" near Jakarta. An American firm's proposal included choosing the site, designing the cement factory, hiring the construction crews, assembling the materials and equipment and turning the finished factory over to the Indonesian government. A Japanese firm's proposal included all of these services, plus hiring and training workers to run the factory, exporting the cement through their trading companies and using the cement to build some needed roads and new office buildings in Jakarta. Although the Japanese firm's proposal cost more, it won the contract. Clearly the Japanese viewed the problem not as one of just building a cement factory (the narrow view of systems selling) but of running it in a way that would contribute to the country's economy. They took the broadest view of the customers' needs. This is true systems selling.

Continue reading here: How Do Government Buyers Make their Buying Decisions

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