Marketing Management
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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 пє 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 пє recognizing and unfulfilled need
Product Specification пє considers alternative solutions and comes p with potential specifications that supplies might use to develop their proposals to supply the product
RFP Process пє when buying organizations invite alternative suppliers to bid on supplying their required components
Proposal Analysis and Supplier Selection пє 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 пє includes specific details of the goods, prices, delivery daters, etc. of the order with preferred supplier(s)
Vendor/Performance Assessmentпє 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 — the person who suggests buying the particular good/service (e.g. Doctor)
Influencer — the person whose views influence the final decision of other members of the buying process (e.g. Pharmacy)
Decider — the person who ultimately determines the buying decision (what to buy, how to buy, where to buy, whether to buy) (e.g. Hospital)
Buyer — the person who handles the paperwork for the actual purchase
User — the people who consume or use the product or service
Gatekeeper — 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 пє 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 пє 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 — 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