Model Answer for Assignment 27

Q. B2B requires a deep understanding of organizational buying process and influences.

What do you think are the issues in terms of marketing organization and implementation?

Ans. B2B has some characteristic features which influence the marketing organization in
terms of strategy and implementation. The same have been enumerated below:

1. Fewer and larger buyers:

Unlike consumer markets, the number of buyers in B2B is less and hence each
buying organization holds more importance and larger stake for the marketing
organization. Moreover, the size of the buyer entities is also large catering to large market
value. Hence, each potential customer is dealt with more critically in B2B.

2. Close supplier-customer relationship:

On account of the limited market available and fewer marketers existing, there is
a close link between the buyer and the marketer. Moreover, the importance of
each customer makes this close association mandatory for better prospects in
future.

3. Professional purchasing:
Business goods/services are purchased by trained professionals who must abide
by the rules and policies set by their organization. Hence, the marketer must keep these
constraints in mind while formulating a strategy to tap the market.

4. Several buying influences:

Many people influence the buying decision. Infact, many a times it becomes
difficult to identify the buying centre as other team members play a more active
role. Initiators, Influencers, users, deciders, Approvers, Buyers and gatekeepers
are typically seen in any buying organization. Hence, smaller marketers try to tap
the decider/buying center directly whereas larger marketers reach each and every
person in the chain to maximize the chances of a successful deal.

5. Multiple sales calls:

On account of more people involved in taking the decision and systematic policies
formulated by the buying organization, more sales calls and contacts are made by the
marketing organization. Typically, 4-5 calls are required to close the deal.

6. Derived demand:
The demand for business goods ultimately is derived from the demand of consumer
goods. Hence, it becomes important for the B2B marketer to closely monitor the sale of
consumer goods to project his sales in turn.

7. Inelastic demand:
The demand for business goods is independent of the price changes.
 8. Direct purchasing:
Business buyers often buy directly from the manufacturers, so the channel of distribution
is avoided. This is much more evident in technically complex items.

9. Personal motive may surpass organisation’s motive

In most cases, the buying centre would give more importance to his personal motives in
making the final choice. This could be in terms of praise from superiors in making a
financially viable decision in short term, acknowledgement from colleagues, etc. Hence,
a close study of the psychology of the buying centre would reap returns.

10. Power exhibition by different people in the buying team

Each member of the team would try to influence the others in taking the decision. This
could be coercive power, attraction power, reward power, expert power or status power.
Junior people in the team generally use attraction power or rational approach whereas
senior members would use their status to influence others.

11. The buying organisation’s objective in making the right choice should be studied
well. The relative importance of various parameters in making the choice should
be chalked out prudently.

12. The manner in which the buying organization perceives the marketing
organization should be known as it would facilitate further improvements.

13. The type of purchase (straight rebuy, modified rebuy or new task) also influences
the process and influencing factors in the organistion.

Keeping the above factors in consideration, the following sales process is generally
followed in a B2B sale:

1. problem recognition
2. General need ecription
3. product specification
4. supplier search
5. proposal solicitation
6. supplier selection
7. order-routine specification
8. performance review