B2B MARKETING1

8/7/2019 B2B MARKETING1

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B2B MARKETING

PRESENTED BY:

BIPLABBISWADEEP

NILANJANA

MOUMITA

PRASHANT

ANUPAM

AMIT


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CONCEPT OF B2B MARKETING

Business-to-business (B2B) marketing

Organizational sales and purchases of goods

and services to support production of otherproducts, to facilitate daily company

operations, or for resale.

Actually one business organization sales its

product to other organization, so it is little

different from Business to customer(B2C)

marketing.


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COMPARISONBASIS B2B B2C

PRODUCT Relatively technical innature, exact form often

variable, accompany

services very important

Standardized form, serviceimportant but less than for

business products

PROMOTION Emphasis on personal

selling

Emphasis on advertising

DISTRIBUTION Relatively short,direct

channels to market

Product passes through a

no of intermediate links

enroute to consumer

CUSTOMER

RELATION

Relatively enduring and

complex

Comparatively infrequent

contact,relationship of

relatively short durationDECISION MAKING

PROCESS

Diverse group of

organization,member

makes decision

Individual or household

unit makes decision

PRICE Competitive bidding for

unique items,list prices of

standard items

List prices


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NATURE OF THE BUSINESS MARKET

Companies also buy services, such as legal, accounting, office-

cleaning, and other services.

Some firms focus entirely on business markets.

Example: Caterpillar, which makes construction and mining

equipment.

Diverse market, everything from a box of paper clips to

thousands of parts for an automobile manufacturer.


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COMPONENTS OF THE BUSINESS

MARKET Four main components:

Commercial market Individuals and firms that acquire products to support,

directly or indirectly, production of other goods and services.

Largest segment of the business market.

Trade industries Retailers or wholesalers that purchase products for resale to

others.

Also called resellers, marketing intermediaries that operate in the trade

sector.

Governmentall domestic levels (federal, state, local) and foreign governments;

also act as sellerse.g., confiscated goods.

Public and private institutions, such as hospitals, churches, colleges and

universities, and museums.


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B2B MARKETS: THE INTERNET CONNECTION

More than 94 percent of all Internet sales are B2B transactions.

Opens up foreign markets to sellers.

Largest segment of the business market.

DIFFERENCES IN FOREIGN BUSINESSMARKETS

May differ due to variations in regulations and cultural

practices.

Businesses must be willing to adapt to local customs

and business practices and research cultural

preferences.


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SEGMENTATION BY END-USE APPLICATION

End-use application segmentation Segmenting a business-to-business

market based on how industrial purchasers will use the product.

Example:A supplier of industrial gases that sells hydrogen to some

companies and carbon dioxide to others.

SEGMENTATION BY PURCHASE CATEGORIES

Segmenting according to organizational buyer characteristics.

Example: Whether a company has a designated central purchasing

department or each unit within the company handles its own purchasing.

Businesses increasingly segment customers according to the stage in their

relationship.

Example: Whether a customer is new or a long-term partner.


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THE PURCHASE DECISION PROCESS

Sellers must navigate organizational buying processes that often involve

multiple decision makers.

Purchasing process usually more formal than in consumer market.

Purchases may require bidding and negotiations.

BUYER-SELLER RELATIONSHIPS

Often more complex than in consumer market.

Greater reliance on relationship marketing.

EVALUATING INTERNATIONAL BUSINESS MARKETS

Business purchasing patterns differ from country to country. Global sourcing Purchasing goods and services from suppliers worldwide.

Can bring significant cost savings but requires adjustments.


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BUSINESS MARKET DEMAND

Demand characteristics vary from market to market


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DERIVED DEMAND The linkage between demand for a companys output and its purchases of

resources such as machinery, components, supplies, and raw materials.

Example: Demand for computer microprocessor chips is derived

from demand for personal computers.

Organizational buyers purchase two types of items:

Capital itemslong-lived business aspects that depreciate.

Expense itemsitems consumed within short time periods.

VOLATILE DEMAND

Derived demand creates volatility. Example: Demand for gasoline pumps may be reduced if demand for

gasoline slows.


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JOINT DEMAND

Results when the demand for one business product is related to

the demand for another business product used in combination

with the first item.

Example: If lumber supply falls, then decrease in construction

will affect concrete market.

INELASTIC DEMAND

Demand throughout an industry will not change significantly

due to a price change.

Example: Construction firms will not necessarily buy morelumber if prices fall unless overall housing demand also

increases.


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INVENTORY ADJUSTMENTS

Just-in-time (JIT) inventory policies boost efficiency by cutting

inventory and requiring vendors to deliver inputs as they are

needed.

Often use sole sourcing, buying a firms entire stock of a

product from just one supplier.

Latest inventory trend: JIT II, suppliers to place representatives

at the customers facility to work as part of an integrated, on-

site customersupplier team.

I

nventory adjustments are also vital to wholesalers and retailers.


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Firms acquiring needed products can get them in one of threeways:

Make the good or provide the service in-house.

Purchase it from another organization.

Lease it from another organization.

Producing the item may be cheapest route, but most firms

cannot make all of the products they need.

Many companies purchase many of the goods they need.

Companies can spread out costs through leasing

THE MAKE, BUY, OR LEASE DECISION


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THE RISE OF OFFSHORING AND OUTSOURCING

Offshoring Movement of high-wage jobs from one country to lower-cost

overseas locations.

Example: China makes two-thirds of the worlds copiers, microwaves,

DVD players, and shoes, and virtually all of the worlds toys.

Allows firms to concentrate their resources on their core business and

access specialized talent or expertise.

Nearshoring Moving jobs to vendors in countries close to the businesss

home country.

U.S. firms often nearshore in Canada or Mexico.

Outshoring Using outside vendors to provide goods and services formerly

produced in-house.

Commonly outshore for three reasons: cost reduction, quality and

speed of software maintenance and development, and greater value.


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THE BUSINESS BUYING PROCESS

More complex than the consumer decision process.

Takes place within formal organizations budget, cost, and profit

considerations.

INFLUENCES ON PURCHASE DECISIONS

Environmental Factors

Economic, political, regulatory, competitive, and technological

considerations influence business buying decisions.

Example: Law freezing cable rates or introduction of new

product by a competitor will affect demand.

Natural disasters, such as Hurricane Katrina.


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Organizational Factors

Successful marketers understand their customers organizational structures,

policies, and purchasing systems.

Some firms have centralized procurement, others delegate it throughout the

units.

Many companies use multiple sourcing to avoid depending too heavily on a

sole supplier.

Interpersonal Influences

Many different people influence B2B buying decisions, sometimes as

individuals and sometimes as part of a committee.

Marketers must know who the influencers are and understand their priorities.

Sales personnel must be flexible and have a good technical understanding of

their products.


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MODEL OF THE ORGANIZATIONAL BUYING

PROCESS


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Stage 1: Anticipate a Problem/Need/Opportunity and a General

Solution

Example: Need to provide employees with a good cup of coffee toenhance productivity.

Stage 2: Determine the Characteristics and Quantity of a Needed

Good or Service

Example: Offering a coffee system that brews one cup of coffee at a time

according to each employees preference.

Stage 3: Describe Characteristics and the Quantity of a Needed

Good or Service

Example: Firms need a simple system for

brewing a good cup of coffee; quantityrequirements are easily correlated to the

number of coffee drinkers.


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Stage 4: Search for and Qualify Potential Sources

Choice of supplier may be fairly straightforward or very

complex.

Stage 5: Acquire and Analyze Proposals

May involve competitive bidding, especially if the buyer is

the government or a public agency.

Stage 6: Evaluate Proposals and Select Suppliers

Buyers choose proposal best suited to their needs.

Final choice may involve trade-offs between feature

such as price, reliability, quality, and order accuracy.


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Stage 7: Select an Order Routine

Buyer and vendor work out best way to process future purchases.

Stage 8: Obtain Feedback and Evaluate Performance

Buyers measure vendors performance.

Larger firms are more likely to use formal evaluation procedures.

Some firms rely on outside organizations to gather quality feedback and

summarize results.

Example: J. D. Power and Associates


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CLASSIFYING BUSINESS BUYING SITUATIONS

Business buying behavior involves degree of effort involved in the

decision and the levels within the organization in which these decisions aremade.

Straight Rebuying

A recurring purchase decision in which a customer reorders a product that

has satisfied needs in the past.

Purchaser see little reason to assess competing options.

Marketers who maintain good relationships with customers can go a long

way toward ensuring straight rebuys.

High-quality products.

Superior service.

Prompt delivery.


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Modified Rebuying

Purchaser willing to reevaluate available options.

May occur if supplier has let a rebuy circumstance deteriorate because ofpoor service or delivery performance.

New-Task Buying

First-time or unique purchase situations that require considerable effort by

the decision makers. Most complex category of business buying.

Often requires purchaser to consider alternative offerings and vendors.


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Reciprocity

Practice of buying from suppliers that are also customers.

In U.S., Department of Justice and the Federal Trade

Commission view reciprocity as an attempt to reduce

competition.

ANALYSIS TOOLS

Value analysisexamines each component of a purchase in

an attempt to either delete the item or replace it with a more

cost-effective substitute.

Vendor analysisan ongoing evaluation of a suppliersperformance in categories such as price, EDI capability, back

orders, delivery times, liability insurance, and attention to

special requests.


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THE BUYING CENTER CONCEPT

Buying center Participants in an organizational buying action.

BUYING CENTER ROLES


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Documents

B2B MARKETING1