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Group Names & Case AllocationGroup Name Case/Article
Marketing Myopia
Movie Test Audiences
Marketing to Older Adults
Online Music Distbn.
Market Segmentation
Exclusive Brands
External Search
Easy Cinema
Price & Brand Name
FCUK
e- Marketing
Group Names & Strap LinesGroup Name Strap Line Reference
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-4
Chapter Questions
• What is the business market, and how does it differ from the consumer market?
• What buying situations do organizational buyers face?
• Who participates in the business-to-business buying process?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-5
Chapter Questions
• How do business buyers make their decisions?
• How can companies build strong relationships with business customers?
• How do institutional buyers and government agencies do their buying?
Summary
Complexity and dynamism has implications for business-to-business markets. The target audiences for B2B communications are amorphous, made up of groups of constantly changing individuals with different interests and motivations. Buyers seek a good financial deal. Production managers want high throughput. Health and safety executives want low risk. And those are just their simple, functional needs. Each person who is party to the DMU will also bring their psychological and cultural baggage to the decision and this can create interesting variations to the selection of products and suppliers.
Characteristics of Business Markets
• Fewer, larger buyers
• Close supplier-customer relationships
• Professional purchasing
• Many buying influences
• Multiple sales calls• Derived demand• In-elastic demand • Fluctuating demand• Geographically
concentrated buyers• Direct purchasing
Derived Demand
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-9
Buying Situation
Straight rebuyStraight rebuy
Modified rebuyModified rebuy
New taskNew task
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-10
Systems Buying and Selling
Turnkey solution desired;
Bids solicited
PrimeContractors
Second-tierContractors
System subcomponents
assembled
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-11
The Buying Centre
InitiatorsInitiators
UsersUsers
InfluencersInfluencers
DecidersDeciders
ApproversApprovers
BuyersBuyers
GatekeepersGatekeepers
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-12
Sales Strategies
Small Sellers
Large Sellers
Key Buying Influencers
Multi-levelIn-depthSelling
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-13
Stages in the Buying Process: Buyphases
• Problem recognition• General need description• Product specification• Supplier search• Proposal solicitation• Supplier selection• Order-routine specification• Performance review
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-14
Table 7.2 Buygrid Framework
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-15
Forms of Electronic Marketplaces
• Catalogue sites• Vertical markets
• Pure play auction sites• Spot markets
• Private exchanges• Barter markets
• Buying alliances
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-16
Methods of e-Procurement
• Websites organized using vertical hubs
• Websites organized using functional hubs
• Direct extranet links to major suppliers
• Buying alliances
• Company buying sites
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-17
Table 7.3 Vendor Analysis
Are Business Buyers both Rational & Sophisticated ?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-18
Lucas Industries plc was a famous manufacturer of components for the motor industry and aerospace industry. It was based in Birmingham in the UK.It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index.
Are Business Buyers both Rational & Sophisticated ?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-19
• Large Committee• Very extensive Invitation to Tender process• Sophisticated Questionnaires• Complex multi Excel spreadsheet Analysis• Short list prepared• Long Proposal and meeting schedule over several months.
Are Business Buyers both Rational & Sophisticated ?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-20
Success !! We are awarded the business‼ Sales are convinced it was down to our Sharper pricing.? mmd was sent to investigate………….
Do you have an office in Swindon ?
Answer Yes or No.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-21
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-22
Handling Price-Oriented Customers
Limit quantity purchasedLimit quantity purchased
Allow no refundsAllow no refunds
Make no adjustmentsMake no adjustments
Provide no servicesProvide no services
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-23
Handling Price-Oriented Customers
Limit quantity purchasedLimit quantity purchased
Allow no refundsAllow no refunds
Make no adjustmentsMake no adjustments
Provide no servicesProvide no services
MBA Student Warning
This is all just Theory !
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-24
Methods for Researching Customer Value
• Internal engineering assessment
• Field value-in-use assessment
• Focus-group value assessment
• Direct survey questions
• Conjoint analysis• Benchmarks• Compositional
approach• Importance ratings• Take client to Golf
course and ask him what we need to do to win the business.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-25
Order Routine Specification
Stockless purchase plans
Vendor-managedinventory
Continuous replenishment
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-26
Establishing Corporate Trust and Credibility
Expertise
LikeabilityTrustworthiness
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-27
Figure 7.1 Trust Dimensions
Transparent
Product/ServiceQuality
Incentive
Partnering
Co-operating Design
Product Comparison
Supply Chain
Pervasive Advocacy
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-28
Factors Affecting Buyer-Supplier Relationships
Availability of alternatives
Supply marketdynamism
Complexity ofsupply
Importance ofsupply
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7-29
Categories of Buyer-Seller Relationships
• Basic buying and selling
• Bare bones• Contractual
transaction• Customer supply
• Co-operative systems
• Collaborative• Mutually adaptive• Customer is king