Marketing Management

Chapter 6: Business-to-Business

B2B Marketing

B2B refers to the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, and/or for resale by wholesalers and retailers

Stakeholders:

Manufacturers

Wholesalers

Service Firms

The distinction between B2B and B2C transactions пÑ" ultimate USER of that product or service

Salespeople are an important component in B2C transactions, but they are not crucial for the sales of many consumer goods. For B2B sales, the salesperson is an integral component for the transaction

The demand for the B2B sales comes from the derive demand (link between consumers’ demand for a company’s output and its purchase of necessary inputs to manufacture or assemble particular output)

B2B Markets

Focus on: KEY BUSINESS CUSTOMERS rather than on ULTIMATE CONSUMER

Types of B2B Organizations:

Manufacturers/Producers

Buy raw materials, components, and parts that allow them to manufacture their own good

Must manage supply and demand chains closely

Resellers

Intermediaries that resell manufactures products with out significantly altering their form

Institutions

Hospitals, educational organizations, etc that purchase all kinds of goods and services.

Government

B2B Buying Process

Need Recognition пÑ" recognizing and unfulfilled need

Product Specification пÑ" considers alternative solutions and comes p with potential specifications that supplies might use to develop their proposals to supply the product

RFP Process пÑ" when buying organizations invite alternative suppliers to bid on supplying their required components

Proposal Analysis and Supplier Selection пÑ" gives the buying firm power because they determine which proposals have the best price, quality, delivery, and financing and which company they want to partner with ; keeps suppliers on their toes to uphold their strength of brand, ability to deliver, product quality, and ease of ordering

Order Specification пÑ" includes specific details of the goods, prices, delivery daters, etc. of the order with preferred supplier(s)

Vendor/Performance AssessmentпÑ" firms analyze the vendors performance so they can make decisions about future purchases

B2B vs. B2C

Both start with need recognition

Information search and alternative evaluation steps are more FORMAL and STRUCTURED in the B2B process

B2B buyers specify needs in writing and ask potential suppliers to submit formal proposals

B2C buying decisions are made by individuals or families and can be unplanned or impulsive

Factors Affecting the Buying Process

The Buying Center

Initiator вЂ" the person who suggests buying the particular good/service (e.g. Doctor)

Influencer вЂ" the person whose views influence the final decision of other members of the buying process (e.g. Pharmacy)

Decider вЂ" the person who ultimately determines the buying decision (what to buy, how to buy, where to buy, whether to buy) (e.g. Hospital)

Buyer вЂ" the person who handles the paperwork for the actual purchase

User вЂ" the people who consume or use the product or service

Gatekeeper вЂ" the people who control information or access the decision makers and influencer (e.g. Insurance Company)

Organizational Culture

The culture reflects the set of values, traditions and customs that guide its employees’ behavior пÑ" has an profound influence on purchasing decisions

Types: Autocratic, Democratic, Consultative, Consensus

Type of buying situation: new buys, modified rebuys, and straight rebuys

Chapter 8: Segmentation, Targeting, and Positioning

Segmentation-Targeting-Positioning Process (pg. 211)

Segmentation:

Strategy or Objectives

First, must articulate vision or objectives of the company’s marketing strategy clearly

Must be consistent with and derived from the firm’s mission and objectives, as well as its current situation пÑ" SWOT

Undifferentiated/Mass Marketing:

For products that have the same benefits to everyone or that have no perceived differences (e.g. very basic commodities)

Differentiated:

Help to obtain a bigger share of the market, or expand the market for their products overall вЂ" can be expensive (e.g. offering several shoe lines)

Concentrated:

Providing a product that fit a single, primary target market

Allows firms to employ their limited resources more efficiently

Micromarketing/One-to-One:

When a firm tailors a product/service to suit an individual customer’s wants/needs

Better