Baiscs of B2B Marketing

8/2/2019 Baiscs of B2B Marketing

1/50

Business-to-BusinessMarketingBusiness-to-BusinessMarketing

Harcourt, Inc.


2/50

Dr. Rosenbloom

ObjectivesObjectivesObjectivesObjectives

Understand major customer typesUnderstand major customer types

in the business marketin the business market

Examine the similarities andExamine the similarities and

differences between household anddifferences between household and

business consumersbusiness consumers

Recognize the importance of closeRecognize the importance of close

buyerbuyer--seller relationshipsseller relationships


3/50

Dr. Rosenbloom

ObjectivesObjectivesObjectivesObjectives

Explain the decision process ofExplain the decision process of

organizational buyersorganizational buyersUnderstand factors influencingUnderstand factors influencing

organizational decisionsorganizational decisions

Explain how organizational buyersExplain how organizational buyersevaluate business marketersevaluate business marketers


4/50

Dr. Rosenbloom

Business to Business MarketingBusiness to Business Marketing

BusinessBusiness--toto--business marketingbusiness marketing

refers to the buying and sellingrefers to the buying and sellingand other marketing activitiesand other marketing activities

that take place betweenthat take place between

businesses.businesses.


5/50

Dr. Rosenbloom


McCann andMcCann and

EricksonErickson

AT&TAT&T


6/50

Dr. Rosenbloom


The Martin AgencyThe Martin Agency

Steelcase FurnitureSteelcase Furniture


7/50

Dr. Rosenbloom

Types of CustomersTypes of Customers

CommercialCommercial

InstitutionalInstitutional

GovernmentalGovernmental

InternationalInternational


8/50

Dr. Rosenbloom






Manufacturers, constructionManufacturers, constructioncompanies, service firms,companies, service firms,

transport companies, sometransport companies, some

professional groups, andprofessional groups, andresellersresellers


9/50

Dr. Rosenbloom


Resellers includesResellers includes

wholesalers, industrialwholesalers, industrial

distributors, brokers/agents,distributors, brokers/agents,

and retailers who buyand retailers who buy

finished products to resellfinished products to resell

for a profit.for a profit.






10/50

Dr. Rosenbloom


Concentration of customersConcentration of customers

Far fewer but far largerFar fewer but far larger

customerscustomers

Geographically concentratedGeographically concentrated

in California, New York,in California, New York,

Ohio, Illinois,Michigan,Ohio, Illinois,Michigan,

Texas, Pennsylvania, NewTexas, Pennsylvania, NewJerseyJersey






11/50

Dr. Rosenbloom


Significant buying powerSignificant buying power

More than 50% of everyMore than 50% of every

dollar earned is spent ondollar earned is spent on

materials, supplies, andmaterials, supplies, andequipment to produce theequipment to produce the

productproduct






12/50

Dr. Rosenbloom


Purchasing functionPurchasing function

Usually administered by anUsually administered by an

individualindividual

Relationships are developedRelationships are developed

between buyer and sellerbetween buyer and seller

The Internet is makingThe Internet is making

purchasing more efficientpurchasing more efficientand competitiveand competitive






13/50

Dr. Rosenbloom


Organizations that provideOrganizations that provide

services without theservices without the

motivation of profit such asmotivation of profit such as

churches, hospitals,churches, hospitals,

universitiesuniversities






14/50

Dr. Rosenbloom


Institutional buyingInstitutional buying

Similar to governmentSimilar to government

buyingbuying

Relationships must beRelationships must be

cultivated with the staffcultivated with the staff

(often made up of(often made up of

professionals)professionals)






15/50

Dr. Rosenbloom


The government marketThe government market

consists of federal (1), stateconsists of federal (1), state

(50), and local (87,000)(50), and local (87,000)

governmentsgovernments






16/50

Dr. Rosenbloom


Government buyingGovernment buying

Formal advertising (openFormal advertising (open

bid)bid)

Solicits bids from suppliers

Standardized product and

straightforward specifications

Negotiated contractNegotiated contract Complex scientific or R&D

products

Some competiton from

simultaneous negotiations






17/50

Dr. Rosenbloom


The business marketThe business market

stretches beyond domesticstretches beyond domestic

borders to includeborders to include

customers in othercustomers in other

countriescountries






18/50

Dr. Rosenbloom


Different buyingDifferent buying

proceduresprocedures

Formal procedures,Formal procedures,

negotiations, personnelnegotiations, personnel

show differences from oneshow differences from one

country to anothercountry to another






19/50

Dr. Rosenbloom

EconomicEconomic

SectorSector

(2(2--digit)digit)EconomicEconomic

SubsectorSubsector(3(3--digit)digit)

IndustryIndustry

GroupGroup

(4(4--digit)digit)IndustryIndustry

GroupGroup

(5(5--digit)digit)

Classifying Business CustomersClassifying Business Customers

NAICS51:

NAICS51:

Information

Information

NAICS

513:

NAICS

513:

Broadcastingand

Broadcastingand

Telecommunications

Telecommunications

NAIC

S5133:

NAIC

S5133:

Telecomm

unications

Telecomm

unications

NAICS

NAICS

51

332:

51

332:Wireless

Wireless

Telec

ommunications

Telec

ommunications

Carriers

Carriers

NAICS

NAICS

513321:

513321:Paging

Paging

U.S.U.S.

IndustryIndustry

(6(6--digit)digit)


20/50

Dr. Rosenbloom

Business Market CharacteristicsBusiness Market Characteristics

Derived:

Link betweendemand for

industrial product

and demand for

consumer

products


21/50

Dr. Rosenbloom


Derived:

Link betweendemand for

industrial product

and demand for

consumer

products

Fluctuating:

Patterns and

preferences in the

household market

can change the

demand forindustrial goods

Stimulating:

Some industrialproducts must

market to the

ultimate

consumer directly


22/50

Dr. Rosenbloom


Relationship

Marketing:

Marketing activies

directed toward

establishing and

maintaining

exchanges with

customers


23/50

Dr. Rosenbloom


Relationship

Marketing:

Marketing activies

directed toward

establishing and

maintaining

exchanges with

customers

Longer-term and

closer

relationships

with fewer

suppliers

Closer

interactionsamong multiple

functions on

both buying and

selling sides


24/50

Dr. Rosenbloom


Supply Chain

Management:Linking with

strategic suppliers,

intermediaries,

and customers to

improve efficiency


25/50

Dr. Rosenbloom


Supply Chain

Management:Linking with

strategic suppliers,

intermediaries,

and customers to

improve efficiency

JIT:

Just-in-time

production to

deliver defect-free

parts to

production justwhen needed

ERP:

Software that can

help enhance the

flow of a supply

chain


26/50

Dr. Rosenbloom

Problem Recognition

General Description of

Need

Detailed Description

ofProduct Specs

Supplier Search

Acquisition and

Analysis ofProposals

Supplier Selection

Selection of an Order

Routine

PerformanceReview

Organizational Buying ProcessOrganizational Buying Process

A problem that can beA problem that can be

solved or opportunitysolved or opportunity

captured by acquiring acaptured by acquiring a

specific productspecific product

Triggered by internal orTriggered by internal or

external forcesexternal forces


27/50

Dr. Rosenbloom

Problem Recognition


Need


ofProduct Specs

Supplier Search

Acquisition and


Supplier Selection


Routine

PerformanceReview


Organization membersOrganization members

must determine how themust determine how the

problem/opportunity canproblem/opportunity can

be dealt withbe dealt with

Focus on generalFocus on general

characteristics andcharacteristics and

quantity of itemquantity of item


28/50

Dr. Rosenbloom

Problem Recognition


Need


ofP

roduct Specs

Supplier Search

Acquisition and


Supplier Selection


Routine

PerformanceReview


Extension of generalExtension of general

description of needdescription of need

Key buying individualsKey buying individualsenter the processenter the process


29/50

Dr. Rosenbloom

Problem Recognition


Need


ofP

roduct Specs

Supplier Search

Acquisition and


Supplier Selection


Routine

PerformanceReview


Which suppliers toWhich suppliers to

consider as candidatesconsider as candidates

Time invested dependsTime invested dependson buying situationon buying situation


30/50

Dr. Rosenbloom

Problem Recognition


Need


ofP

roduct Specs

Supplier Search

Acquisition and


Supplier Selection


Routine

PerformanceReview


Can occurCan occur

simultaneously withsimultaneously with

suppler search whensuppler search when

standardized itemsstandardized items

involvedinvolved

Different organizationDifferent organization

members entermembers enter

(engineers, consultants,(engineers, consultants,

etc.)etc.)


31/50

Dr. Rosenbloom

Problem Recognition


Need


ofP

roduct Specs

Supplier Search

Acquisition and


Supplier Selection


Routine

PerformanceReview


Alternate proposalsAlternate proposals

analyzedanalyzed

One or more offersOne or more offersacceptedaccepted

Negotiations mayNegotiations may

continue oncontinue on


32/50

Dr. Rosenbloom

Problem Recognition


Need


ofP

roduct Specs

Supplier Search

Acquisition and


Supplier Selection


Routine

PerformanceReview


Purchase specifics arePurchase specifics are

developed (delivery,developed (delivery,

warranties, etc.)warranties, etc.)


33/50

Dr. Rosenbloom

Problem Recognition


Need


ofP

roduct Specs

Supplier Search

Acquisition and


Supplier Selection


Routine

PerformanceReview


Determines future buyingDetermines future buying

processesprocesses

Follow through byFollow through bymarketer is essential!marketer is essential!


34/50

Dr. Rosenbloom

Modified RebuyModified Rebuy

New BuyNew Buy

Straight RebuyStraight Rebuy

Buying SituationsBuying Situations


35/50

Dr. Rosenbloom

Straight RebuyStraight RebuyStraight RebuyStraight Rebuy


A combined effort between supplierA combined effort between supplierand customer will produce betterand customer will produce better

products and processes which will,products and processes which will,

in turn, improve manufacturing andin turn, improve manufacturing andmarketingmarketing


36/50

Dr. Rosenbloom


New BuyNew Buy




37/50

Dr. Rosenbloom

Modified RebuyModified RebuyModified RebuyModified Rebuy


Situation in which purchasersSituation in which purchasers

require some additional information,require some additional information,

however, a fairly routine process ishowever, a fairly routine process isfollowedfollowed


38/50

Dr. Rosenbloom



New BuyNew Buy



39/50


40/50

Dr. Rosenbloom

Environmental ForcesEnvironmental Forces

Economic influencesEconomic influences

Sensitivity to demand in ultimateSensitivity to demand in ultimate

consumer marketsconsumer markets

Global economic variationsGlobal economic variations

Technological influencesTechnological influences

More intense search effortsMore intense search efforts

Less time on searchesLess time on searches

Influenceson

Influenceson

O

rganiza

tionalB

uyers

O

rganiza

tionalB

uyers


41/50

Dr. Rosenbloom

Organizational ForcesOrganizational Forces

Strategic prioritiesStrategic priorities

Support firms mission and strategiesSupport firms mission and strategies

Strategic role purchasingStrategic role purchasing

Aligning purchasing with corporateAligning purchasing with corporate

strategystrategy

Organizational positioning ofOrganizational positioning ofpurchasingpurchasing

Centralized vs individual userCentralized vs individual user

Influenceson

Influenceson

O

rganiza

tionalB

uyers

O

rganiza

tionalB

uyers


42/50

Dr. Rosenbloom

Individual ForcesIndividual Forces

Rational motives vs emotionalRational motives vs emotionalmotivesmotives

Differing evaluative criteriaDiffering evaluative criteria

Specifications that organizationalSpecifications that organizational

buyers use to comparebuyers use to compare

products/servicesproducts/services

Different educational background,Different educational background,

experiences, etc.experiences, etc.

Influenceson

Influenceson

O

rganiza

tionalB

uyers

O

rganiza

tionalB

uyers


43/50

Dr. Rosenbloom

Group Forces: Buying CenterGroup Forces: Buying Center

Different individuals are importantDifferent individuals are importantat different times during theat different times during the

purchase processpurchase process

Relative influence and evaluativeRelative influence and evaluative

criteriacriteria

Isolating the buying situationIsolating the buying situation

Buying centers fluctuate based on theBuying centers fluctuate based on the

buying situationbuying situation

Influenceson

Influenceson

O

rganiza

tionalB

uyers

O

rganiza

tionalB

uyers


44/50

Dr. Rosenbloom

Group Forces: Buying CenterGroup Forces: Buying Center

Identify buying influentialsIdentify buying influentials

Key influencers often outside theKey influencers often outside the

purchasing departmentpurchasing department

Buyer RolesBuyer Roles

Influenceson

Influenceson

O

rganiza

tionalB

uyers

O

rganiza

tionalB

uyers


45/50

Dr. Rosenbloom

UsersUsers

InfluencersInfluencers

BuyersBuyers

DecidersDeciders

GatekeeperGatekeeper

People who willPeople who will

actuallyuse theactuallyuse the

purchased good orpurchased good or

serviceservice

Influence onInfluence onpurchase decisionpurchase decision

can be extensivecan be extensive

or negligibleor negligible

Buying Center RolesBuying Center Roles


46/50

Dr. Rosenbloom


UsersUsers

BuyersBuyers

DecidersDeciders



Provide advice andProvide advice and

information aboutinformation about

various alternativesvarious alternatives

OutsideOutside

consultantsconsultants

ExperiencedExperiencedemployeesemployees

TechnicalTechnical

personnelpersonnel


47/50

Dr. Rosenbloom

BuyersBuyers

UsersUsers


DecidersDeciders


Employee whoEmployee who

actually purchasesactually purchases

the product orthe product or

serviceservice

Could be anyoneC

ould be anyonefrom the presidentfrom the president

of the company toof the company to

a purchasing agenta purchasing agent



48/50

Dr. Rosenbloom

DecidersDeciders

UsersUsers


BuyersBuyers


Make the decisionMake the decision

on which productson which products

to buyto buy

The size andThe size and

importance of theimportance of thedecision dictatedecision dictate

who performs thewho performs the

rolerole



49/50

Dr. Rosenbloom


UsersUsers


BuyersBuyers

DecidersDeciders

Control the flow ofControl the flow of

information withininformation within

the organizationthe organization

Again, can beAgain, can be

anyone in theanyone in the

organizationorganizationincluding theincluding the

secretary who openssecretary who opens

the mailthe mail



50/50

Dr. Rosenbloom

Supplier EvaluationSupplier Evaluation

Measuring ValueMeasuring Value

Accurate measurement of value isAccurate measurement of value is

critical to purchasingcritical to purchasing

Evaluating supplierEvaluating supplier

performanceperformance

WeightedWeighted--point planpoint plan

Organization weights each

performance factor according to

relative importance

Documents

Baiscs of B2B Marketing