B2B Marketing

 More than one person involved

 Buying process follows certain rules
 Price comparison, standardisation, tenders

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 ON AN AVERAGE FIRM SPEND 55% TO
60% OF ITS SALES REVENUES IN
BUYING THESE GOODS AND SERVICES.
 IMPORTANT TO ENSURE THAT BUYING
PROCESSES ARE EFFECTIVE AND DO
NOT LEAD TO WASTAGE OF RESOURCES
OR PURCHASE OF SUB-STANDARD AND
UNNECECESSARY ITEMS.

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 PROCUREMENT HAS A BROADER SPECTRUM
OF ACTIVITIES AND GREATER IMPORTANCE
IN THE FIRM THAN PURCHASING.
 UNLIKE PURCHASE PROCUREMENT NOT
ONLY DEALS WITH THE BUYING OF GOODS
AND SERVICES BUT ALSO TAKES CARE OF
OTHER PROCESSES LIKE VALUE ANALYSIS,
SUPPLY MANAGEMENT, VENDOR MARKET
ANALYSIS, VENDOR RATING AND
CERTIFICATION, ENSURING BUYER
PARTICIPATION IN THE PURCHASE PROCESS,
ETC.

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 E-PROCUREMENT IS THE LATEST TOOL
ADOPTED BY INDUSTRIAL BUYERS TO
REDUCE THE OVERALL COST OF THE
PROCUREMENT FUNCTION.
 HELPS SUPPLIERS AND BUYERS TO
DRASTICALLY REDUCE
COMMUNICATION COSTS AND
OVERALL TME TAKEN FOR
NEGOTIATIONS

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 QUALITY: QUALITY IS THE NEXT MAJOR
CONCERN IN ANY PURCHASE DECISION.
 TO ENSURE THAT THE RIGHT QUALITY
INPUTS SAY RAW MATERIAL ENTER THE
FIRM.
 THE QUALITY PARAMETERS ARE SPECIFIED
BY THE INDIVIDUAL END-USER OR THE USER
DEPARTMENT AND THE PROCUREMENT
DEPARTMENT HAS TO PROCURE BASED ON
THE GIVEN SPECIFICATIONS.
 MAY SOMETIMES PERFORM VALUE ANALYSIS
ON THE PRODUCTS TO BE PURCHASED AND
SUGGEST ALTERNATIVE PRODUCTS OR
PRODUCTS WITH MODIFIED SPECIFICATIONS.
 FINAL OUTPUT OF THE FIRM SHOULD BE IN
LINE WITH MARKET EXPECTATIONS.

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 SERVICE:SERVICE OBJECTIVE TO BE FRAMED
BEFORE THE ACTUAL PURCHASE IS DONE.
 WHEN THE FIRM PURCHASE A PRODUCT
FROM THE VENDOR , SHOULD BE CLEAR OF
THE ACCOMPANYING SERVICE EXPECTED
FROM THE VENDOR.
 SERVICE CAN BE IN THE FORM OF PROVIDING
INFORMATION REGARDING PRODUCT
TECHNICALITIES AND PRODUCT UPDATES
PROVIDING TECHNICAL SUPPORT AND
TRAINING TO THE STAFF, AFTER SALES
SERVICE IN THE FORM OF MAINTENANCE
AGREEMENT,ETC.
 PD SHOULD NEGOTIATE WITH THE VENDOR
FOR THESE SERVICES TO BE PROVIDED
ALONG WITH THE PURCHASE.
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 PURCHASE POLICY INCLUDES VARIOUS CLAUSES
THAT GOVERN THE METHODICAL
IMPLEMENTATION OF THE PURCHASE PROCESS.
 THIS POLICY GOVERNS ALL THE PARTIES
INVOLVED IN THE PURCHASE DECISION AND
THEREBY RESTRICTS ANY MALPRACTICES OR
PARTIALITY OR BIAS THROUGHOUT THE
PROCESS.
 THE OBJECTIVES INCLUDE:
1. TO PURCHASE AT A COMPETITIVE PRICE
2. TO PURCHASE AT RIGHT TIME, THE RIGHT
QUALITY, AND THE RIGHT QUANTITY TO ENSURE
THE AVAILABILITY OF MATERIALS IN A
CONTINOUS PROCESS AND TO ENSURE BETTER
PROFIT MARGINS.

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 FUNCTION OF THE PROCUREMENT
DEPARTMENT TO DESIGN AND IMPLEMENT AN
EFFECTIVE PROCUREMENT PROCESS FOR THE
FIRM.
 PROCESS SHOULD BE DESIGNED IN
CONSULTATION WITH THE PERSONNEL OF THE
OTHER DEPARTMENT WHO ACTUALLY USE
THE PURCHASED GOODS.
 DESIGNED TO CONSIDER ALL THE MERITS AND
DEMERITS ASSOCIATED WITH THE GOODS TO
BE PROCURED.

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 THIS SECTION DEALS WITH THE ACTUAL PROCESS
OF BUYING.
 BUYING DECISION IN A FIRM NOT TAKEN BY A
SINGLE INDIVIDUAL BUT BY A GROUP OF
INDIVIDUALS.
 GROUP COMPRISES PERSONNEL FROM DIFFERENT
DEPARTMENTS LIKE PRODUCTION, MARKETING,
FINANCE ETC.
 GENERALLY NEED TO BUY ARISES IN THE SPECIFIC
DEPARTMENT WHERE IT IS USED.
 THE COMMUNICATION TRIGGERS THE FORMAL
START OF THE BUYING PROCESS.

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 SOLICITING AND ANALYZING PROPOSALS
 QUALIFIED SUPPLIERS ARE ASKED TO
SUBMIT PROPOSALS QUOTING THEIR PRICE,
DELIVERY TIME, PAYMENT TERMS ETC.
 IN THE CASE OF REGISTERED VENDORS THE
FIRMS SEND THE TENDER NOTICE TO THE
SUPPLIERS AND SOLICIT THEIR QUOTATIONS.
 PROPOSALS AND QUOTATIONS ARE USUALLY
SUBMITTED IN SEALED COVERS.
 PROPOSALS ARE THE ANALYZED WHICH
COULD BE TIME CONSUMING AND IF IT IS
NOT SATISFACTORY THEN THEY MAY SEND
BACK FOR REVISION.

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 Straigtht rebuy – routine decision, repetitive process
(energy, office supplies, raw materials, wood,
cigarettes), component suppliers for the automotive
industry – little or no new information
 Modified rebuy – more complicated but less
sophisticated: cars, trucks, computers, consulting –
modified rebuys are often treated too uncautious
 New task – calls for thorough research – industrial
plant – highest level of uncertainty. Strategic new tasks
are of extreme strategic and financial importance
(aircrafts, military equipment, infrastructure) – re-
evaluation of alternatives and search for new
information and new alternatives

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 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order routine specification
 Performance review

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 2. General
1. Problem 3. Product
Description
Recognition Specifications
of Need

5. Acquisition
4. Supplier Organizational and Analysis
Search Buying Process of Proposals

7. Selection
6. Supplier 8. Performance
of
Selection Review
Order Routine

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Buying centres - comparison between
consumer and B2B markets (1 of 2)
Buying centres - comparison between
consumer and B2B markets (2 of 2)
 Role keepers have different tasks – not
mandatory

 Buyer
 User
 Initiator
 Gatekeeper
 Influencer
 Decision Makers

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 Formal authority to sign contracts
 Member of purchasing department
 Influences the vendor selection
 Not in technical details
 Main criteria: price + terms and conditions of the
contract

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 Person working with the product
 Interested in benefits and unobstructed function
of the product to buy
 Large knowhow and preconceived opinion

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 A person with high technical knowledge and
practical experience

 definition of minimum requirements on

technical or company standards

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 Controls the flow of information within the
buying center
 Assistant of decision maker
 Influence by preparing the decision and the
relevant documents

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 Right to say yes or no
 Mightiest person

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 Person who brings new ideas and solutions
into the company

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Thank You.

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