Business-to-Business Marketing

Chapter 7

2

• Describe the ways in which business-to-business (B2B) firms segment their markets

• List the steps in the B2B buying process

• Identify the roles within the buying center

• Describe the different types of organizational cultures

• Detail different buying situations

Today

3

B2B Marketing: 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, or for resale by wholesalers and retailers to consumers.

B2B Marketing

4

B2B Marketing: 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, or for resale by wholesalers and retailers to consumers.

B2B Marketing

The distinction between B2B and B2C is NOT the product or service itself BUT the ultimate use of the product or service

5

B2B vs B2C

6

B2B vs B2C

B2C

B2B

7

B2B Markets

Manufacturersand

Service Providers

B2BMarkets

Resellers

Institutions

Government

8

• Procure raw materials to make their own goods– Tesla need to buy aluminum to build Model S

Manufacturers and service providers

9

Resellers

ManufacturerP&G, J&J, Kimberly Clark, Kraft, Dole, etc.

ResellerCostco

RetailerWhole Foods, Wegmnas, Ralphs, etc.Costco is also an example here!!

Resellers are marketing intermediaries that resell manufactured products without significantly altering their form.

10

• Universities, museums, religious organizations, etc.– What types of products must universities

purchase?

Institutions

11

• US Government spends $3.7 trillion procuring goods

• State and local governments also make significant purchases

• Some firms specialize in selling to government

Government

12

B2B buying process

Request for Proposals

Recall last week we discussed the B2C buying process (consumer behavior CH 6). Today we are going to see the difference with the B2B process

13

B2B buying process

Request for Proposals

Recall last week we discussed the B2C buying process (consumer behavior CH 6). Today we are going to see the difference with the B2B process

B2C

B2B

14

B2B buying process

Request for Proposals

Recall last week we discussed the B2C buying process (consumer behavior CH 6). Today we are going to see the difference with the B2B process

B2C

B2B

15

• Can be generated internally or externally• Sources for recognizing new needs:

– Suppliers– Salespeople– Competitors

• For example, a salesperson from firm A attends a trade show and visits firm B’s booth, which features a demonstration of a new sorting process. Although firm A had been looking for ways to improve its efficiency, it had not yet considered the possibility of sorting efficiencies.

1. Need recognition

16

2. Product specification

• Used by Suppliers to develop proposals

• Can be done collaboratively with suppliers

17

• RFPs enable the buyer to solicit pricing and other information from a variety of suppliers

• Also allow suppliers to learn about the buyer and its specific needs

3. RFP process

18

Step 4: Proposal Analysis, Vendor Negotiation, and Selection

• Often several vendors are negotiating against each other

• Considerations other than price play a role in final selection

19

Step 5: Order Specification

• Firm places the order

• The exact details of the purchase are specified

• All terms are detailed including payment

20

Step 6: Vendor Performance Assessment Using Metrics

(1) Key Issues (2) Importance Score

(3) Vendor’s Performance

(4) Importance x Performance

(2) x (3)

Customer Service .40 5 2.0

Issue Resolution .20 4 0.8

Delivery .10 5 0.5

Quality .30 3 0.9

Total 4.2

21

The Buying Center

In large organizations, several people are responsible for buying decisions à Buying Center

22

• Reflect the set of value, traditions, and customs of a firm

Organizational culture

https://jobs.netflix.com/culture/#introduction

23

Different B2B buying situations require different levels of effort and the involvement of various parties.

Buying Situations

24

Different B2B buying situations require different levels of effort and the involvement of various parties.

Buying Situations

•Purchasing for the first time•Likely to be quite involved•The buying center will probably use all six steps in the buying process

25

Different B2B buying situations require different levels of effort and the involvement of various parties.

Buying Situations

•Purchasing for the first time•Likely to be quite involved•The buying center will probably use all six steps in the buying process

•Purchasing a similar product but changing specifications•Current vendors have an advantage

26

Different B2B buying situations require different levels of effort and the involvement of various parties.

Buying Situations

•Purchasing for the first time•Likely to be quite involved•The buying center will probably use all six steps in the buying process

•Purchasing a similar product but changing specifications•Current vendors have an advantage

•Buying additional units or products that have been previously purchased•Most B2B purchases fall into this category

27

• Type of B2B markets

• B2B buying process

• Buying roles

• Buying situations

Recap