To summarize how B2B is different from B2C:

B2B products and services may require a more significant investment.

B2B products and services are often complex, requiring a steep learning curve.
The B2B evaluation process can be extensive, perhaps including a Request for
Proposals (RFP) or Request for Quotations (RFQ).
The purchasing decision often involves multiple individuals from different
departments and levels in the organization.
Each industry segment has its own jargon, thought leaders, and cultural
conventions that B2B marketers must take into account.

For example, an automobile manufacturer makes several B2B transactions such as

buying tires, glass for windscreens, and rubber hoses for its vehicles. The final
transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

Segmentation helps marketers develop the most appropriate strategy.

SEGMENTATION BY DEMOGRAPHIC CHARACTERISTICS
Grouping by size based on sales revenues or number of employees.
SEGMENTATION BY CUSTOMER TYPE
Grouping in broad categories, such as by industry.
Customer-based segmentation Dividing a business-to-business market into
homogeneous groups based on buyers product specifications
SEGMENTATION BY END-USE APPLICATION
End-use application segmentation Segmenting a business-to-business market based
on how industrial purchasers will use the product.
Example: A supplier of industrial gases that sells hydrogen to some companies and
carbon dioxide to others.
SEGMENTATION BY PURCHASE CATEGORIES
Segmenting according to organizational buyer characteristics.
Example: Whether a company has a designated central purchasing
department or each unit within the company handles its own purchasing.
Businesses increasingly segment customers according to the stage in their relationship.
Example: Whether a customer is new or a long-term partner

THE PURCHASE DECISION PROCESS

Sellers must navigate organizational buying processes that often involve multiple
decision makers.
Purchasing process usually more formal than in consumer market.
Purchases may require bidding and negotiations.
BUYER-SELLER RELATIONSHIPS
Often more complex than in consumer market.
Greater reliance on relationship marketing.
EVALUATING INTERNATIONAL BUSINESS MARKETS
Business purchasing patterns differ from country to country.
Global sourcing Purchasing goods and services from suppliers worldwide.
Can bring significant cost savings but requires adjustments.
DERIVED DEMAND
The linkage between demand for a companys output and its purchases of resources
such as machinery, components, supplies, and raw materials.
Example: Demand for computer microprocessor chips is derived
from demand for personal computers.
Organizational buyers purchase two types of items:
Capital itemslong-lived business aspects that depreciate.
Expense itemsitems consumed within short time periods.
VOLATILE DEMAND
Derived demand creates volatility.
Example: Demand for gasoline pumps may be reduced if demand for
gasoline slows.
JOINT DEMAND
Results when the demand for one business product is related to the demand for another
business product used in combination with the first item.
Example: If lumber supply falls, then decrease in construction will
affect concrete market.
INELASTIC DEMAND
Demand throughout an industry will not change significantly due to a price change.
Example: Construction firms will not necessarily buy more lumber if
prices fall unless overall housing demand also increases.
INVENTORY ADJUSTMENTS
Just-in-time (JIT) inventory policies boost efficiency by cutting inventory and requiring
vendors to deliver inputs as they are needed.
Often use sole sourcing, buying a firms entire stock of a product from just one supplier.
Latest inventory trend: JIT II, suppliers to place representatives at the customers
facility to work as part of an integrated, on-site customersupplier team.
Inventory adjustments are also vital to wholesalers and retailers.

THE MAKE, BUY, OR LEASE DECISION

Firms acquiring needed products can get them in one of three ways:
Make the good or provide the service in-house.
Purchase it from another organization.
Lease it from another organization.
Producing the item may be cheapest route, but most firms cannot make all of the
products they need.
Many companies purchase many of the goods they need.
Companies can spread out costs through leasing.
THE RISE OF OFFSHORING AND OUTSOURCING
Offshoring Movement of high-wage jobs from one country to lower-cost overseas
locations.
Example: China makes two-thirds of the worlds copiers, microwaves,
DVD players, and shoes, and virtually all of the worlds toys.
Allows firms to concentrate their resources on their core business and
access specialized talent or expertise.
Nearshoring Moving jobs to vendors in countries close to the businesss home country.
U.S. firms often nearshore in Canada or Mexico.
Outshoring Using outside vendors to provide goods and services formerly produced inhouse.
Commonly outshore for three reasons: cost reduction, quality and
speed of software maintenance and development, and greater value.
PROBLEMS WITH OFFSHORING AND OUTSOURCING
Many companies discover their cost savings are less than expected.
Can raise security concerns over proprietary technology or customer data.
Can reduce flexibility to respond quickly to marketplace.
Can create conflicts with unions, even leading to shutdowns and strikes.
Can negatively affect employee morale and loyalty.
More complex than the consumer decision process.
Takes place within formal organizations budget, cost, and profit considerations.
INFLUENCES ON PURCHASE DECISIONS
Environmental Factors
Economic, political, regulatory, competitive, and technological considerations influence
business buying decisions.
Example: Law freezing cable rates or introduction of new product
by a competitor will affect demand.
Natural disasters, such as Hurricane Katrina.
Example: Rising fuel prices prompted Viking Energy
Management to lock in fuel prices.

Organizational Factors
Successful marketers understand their customers organizational structures, policies, and
purchasing systems.
Some firms have centralized procurement, others delegate it throughout the units.
Many companies use multiple sourcing to avoid depending too heavily on a sole
supplier.
Interpersonal Influences
Many different people influence B2B buying decisions, sometimes as individuals and
sometimes as part of a committee.
Marketers must know who the influencers are and understand their priorities.
Sales personnel must be flexible and have a good technical understanding of their
products.
The Role of the Professional Buyer
Many organizations rely on professionals, often called merchandisers, who implement
systematic buying procedures.
Firms usually buy expense items with little delay but carefully consider capital
purchases.
May rely on systems integration, centralization of the procurement function.
Corporate buyers often use the Internet to identify sources of supplies.

 Equal Employment Opportunity Laws

Federal laws such as Title VII of the Civil Rights Act of 1964, presidential
executive orders, and state laws prohibit employment discrimination
refusing to hire, promote, train, or transfer employeesbased on personal
characteristics such race, color, religion, sex (gender), national origin, or
disability.
Equal Employment Opportunity Commission (EEOC) is responsible for
enforcing EEO laws

The Role of the Professional Buyer

Many organizations rely on professionals, often called merchandisers, who implement
systematic buying procedures.
Firms usually buy expense items with little delay but carefully consider capital
purchases.
May rely on systems integration, centralization of the procurement function.
Corporate buyers often use the Internet to identify sources of supplies.
MODEL OF THE ORGANIZATIONAL BUYING PROCESS
Stage 1: Anticipate a Problem/Need/Opportunity and a General Solution
Example: Need to provide employees with a good cup of coffee to enhance
productivity.
Stage 2: Determine the Characteristics and Quantity of a Needed Good or Service
Example: Offering a coffee system that brews one cup of coffee at a time according to
each employees preference.
Stage 3: Describe Characteristics and the Quantity of a Needed Good or Service
Example: Firms need a simple system for
brewing a good cup of coffee; quantity
requirements are easily correlated to the
number of coffee drinkers.
Stage 7: Select an Order Routine
Buyer and vendor work out best way to process future purchases.
Stage 8: Obtain Feedback and Evaluate Performance
Buyers measure vendors performance.
Larger firms are more likely to use formal evaluation procedures.
Some firms rely on outside organizations to gather quality feedback and summarize
results.
Example: J. D. Power and Associates
CLASSIFYING BUSINESS BUYING SITUATIONS
Business buying behavior involves degree of effort involved in the decision and the
levels within the organization in which these decisions are made.
Straight Rebuying
A recurring purchase decision in which a customer reorders a product that has satisfied
needs in the past.
Purchaser see little reason to assess competing options.
Marketers who maintain good relationships with customers can go a long way toward
ensuring straight rebuys.
High-quality products.
Superior service.
Prompt delivery.
Modified Rebuying

 Purchaser willing to reevaluate available options.

May occur if supplier has let a rebuy circumstance deteriorate because of poor service
or delivery performance.
New-Task Buying
First-time or unique purchase situations that require considerable effort by the decision
makers.
Most complex category of business buying.
Often requires purchaser to consider alternative
Reciprocity
Practice of buying from suppliers that are also customers.
In U.S., Department of Justice and the Federal Trade Commission view reciprocity as
an attempt to reduce competition.
ANALYSIS TOOLS
Value analysisexamines each component of a purchase in an attempt to either delete
the item or replace it with a more cost-effective substitute.
Vendor analysisan ongoing evaluation of a suppliers performance in categories such
as price, EDI capability, back orders, delivery times, liability insurance, and attention to
special requests.
CHALLENGES OF INSTITUTIONAL MARKETS
Institutional buyers include schools, hospitals, libraries, foundations, and others.
Have widely diverse buying practices among, and even within, institutions.
Multiple buying influences can affect buying decisions, such as conflicts between
professional staff and purchasing departments.
CHALLENGES OF INTERNATIONAL MARKETS
Marketers must consider buyers attitudes and cultural patterns.
Local industries, economic conditions, geographic characteristics, and legal restrictions
must also be considered.
Remanufacturing, or restoring worn-out products to like-new condition, can be an
important strategy in places that cannot afford new products.
Foreign governments are also an important market.