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Chapter 12

BUSINESS-TO-BUSINESS BUSINESS-TO-BUSINESS MARKETINGMARKETING

12-1 Business-to-Business Exchanges12-2 Making Business Purchase

Decisions12-3 Business Purchasing Procedures12-4 Retail Purchasing

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Focus Questions:After reviewing the

advertisement, what types of products do you believe Norilsk Nickel sells?

Who might be some of its customers?

Why would a company that sells to other businesses benefit from advertising?

If you were a business customer, would the ad interest you in Norilsk Nickel? Why or why not?

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© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 12

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BUSINESS-TO-BUSINESS EXCHANGES

GOALSGOALSExplain the reasons businesses buy

things from other businesses.Define the five major classifications of

business consumers.Describe the common characteristics

typical of business markets.

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Reasons for Business Purchases

Reasons for purchasingPurchase products to be incorporated into

a production or manufacturing processPurchase products for direct resale to other

customersPurchase products to operate a business

Purchasing as a marketing activity

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Categories of the Business Product Classification System

Capital Goods

The building and major equipment of business

Operating Equipment

Equipment used in the daily operation of the business

Supplies Consumable materials used in the operation of the business

Raw Materials

Unprocessed materials that are incorporated into the products by the business

Component Parts

Partially or completely processed items that become a part of the products produced by the business

Services Tasks performed in the operation of the business or to support the production, sale, or maintenance of the business’s products and services

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Types of Business Purchasers

Business Customer ClassificationsProducersResellersService businessesGovernmentNonprofit organizations

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Characteristics of Business Markets

Derived demandPurchase volumeSimilar purchasesNumber of businessesBuyer/seller relationship

© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 12

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MAKING BUSINESSPURCHASE DECISIONS

GOALSGOALSDescribe how businesses make new

purchase, modified purchase, and repeat purchase decisions.

Explain the roles played by purchasing specialists.

Identify issues that often arise in international purchasing.

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The Buying Decision

Make or buyTypes of purchases

New purchaseModified purchaseRepeat purchase

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Purchasing Requires Specialists

BuyerProduct managerMerchandise managerPurchasing agent

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International Purchasing

Supplier qualificationsPricing considerationsReciprocal tradingFinancingTransportation

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BUSINESS PURCHASING PROCEDURES

GOALSGOALSIdentify the steps in the business purchasing

process.Explain why purchasing decisions need to

take into consideration more than just the direct cost of products and services.

Describe the importance of keeping accurate inventory and purchasing records.

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Steps in the Purchasing Process

Identify needsDetermine alternativesSearch for vendorsSelect appropriate a vendorNegotiate a purchaseMake a decisionEvaluate the purchase

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Purchasing by Final Consumers and Business Consumers

Final ConsumersFinal Consumers1. Identify needs2. Gather information3. Evaluate alternatives4. Make purchase decision5. Evaluate decision

Business ConsumersBusiness Consumers1. Identify purchasing needs2. Determine alternatives3. Search for vendors4. Select appropriate vendors5. Negotiate a purchase6. Make purchase decision7. Evaluate purchase

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Improving Purchasing Procedures

Improved performanceSupply chain management

Just-in-timeTotal quality management (TQM)

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Processing Purchases

Inventory RecordsInventory RecordsInventoryPhysical inventoryPerpetual inventory

Purchasing RecordsPurchasing RecordsPurchase orderPacking listInvoiceReceiving recordInventory records

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RETAIL PURCHASING

GOALSGOALSDescribe how retailers identify

customer needs and how to satisfy them.

Identify the ways retailers locate the products they need to satisfy their customers.

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Planning to SatisfyCustomer Needs

Determining customer needsTracking product salesDeveloping a purchasing plan

Merchandise planBasic stock listModel stock list

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Obtaining the Needed Products

Selling to retail businessesSalespeopleManufacturer showroomsTrade showsCatalogs and web sites

Completing the purchase processDetermine source of supplyPlace orderShip and receive