B2B MARKETING

PRESENTED BY:
BIPLAB
BISWADEEP
NILANJANA
MOUMITA
PRASHANT
ANUPAM
AMIT
 CONCEPT OF B2B MARKETING

• Business-to-business (B2B) marketing

Organizational sales and purchases of goods
and services to support production of other
products, to facilitate daily company
operations, or for resale.

• Actually one business organization sales its

product to other organization, so it is little
different from Business to customer(B2C)
marketing.
 COMPARISON
BASIS B2B B2C
PRODUCT Relatively technical in Standardized form, service
nature, exact form often important but less than for
variable, accompany business products
services very important
PROMOTION Emphasis on personal Emphasis on advertising
selling
DISTRIBUTION Relatively short,direct Product passes through a
channels to market no of intermediate links
enroute to consumer
CUSTOMER Relatively enduring and Comparatively infrequent
RELATION complex contact,relationship of
relatively short duration
DECISION MAKING Diverse group of Individual or household
PROCESS organization,member unit makes decision
makes decision
PRICE Competitive bidding for List prices
unique items,list prices of
standard items
 NATURE OF THE BUSINESS MARKET

 Companies also buy services, such as legal, accounting, office-

cleaning, and other services.
• Some firms focus entirely on business markets.
• Example: Caterpillar, which makes construction and mining
equipment.
• Diverse market, everything from a box of paper clips to
thousands of parts for an automobile manufacturer.
 COMPONENTS OF THE BUSINESS
MARKET
• Four main components:
• Commercial market Individuals and firms that acquire products to support,
directly or indirectly, production of other goods and services.
• Largest segment of the business market.
• Trade industries Retailers or wholesalers that purchase products for resale to
others.
• Also called resellers, marketing intermediaries that operate in the trade
sector.
• Government—all domestic levels (federal, state, local) and foreign governments;
also act as sellers—e.g., confiscated goods.
• Public and private institutions, such as hospitals, churches, colleges and
universities, and museums.
 B2B MARKETS: THE INTERNET CONNECTION
• More than 94 percent of all Internet sales are B2B transactions.
• Opens up foreign markets to sellers.

• Largest segment of the business market.

• DIFFERENCES IN FOREIGN BUSINESS

MARKETS
• May differ due to variations in regulations and cultural
practices.
• Businesses must be willing to adapt to local customs
and business practices and research cultural
preferences.
 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.
 BUSINESS MARKET DEMAND
• Demand characteristics vary from market to market
 DERIVED DEMAND
• The linkage between demand for a company’s 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 items—long-lived business aspects that depreciate.
• Expense items—items 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 firm’s entire stock of a
product from just one supplier.
• Latest inventory trend: JIT II, suppliers to place representatives
at the customer’s facility to work as part of an integrated, on-
site customer–supplier 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 world’s copiers, microwaves,
DVD players, and shoes, and virtually all of the world’s 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 business’s
home country.
• U.S. firms often nearshore in Canada or Mexico.
• Outshoring Using outside vendors to provide goods and services formerly
produced in-house.
• 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.
THE BUSINESS BUYING PROCESS
•  More complex than the consumer decision process.
•  Takes place within formal organization’s 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.
• 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.
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 employee’s 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 4: Search for and Qualify Potential Sources
• • Choice of supplier may be fairly straightforward or very
complex.
• Stage 5: Acquire and Analyze Proposals
• • May involve competitive bidding, especially if the buyer is
the government or a public agency.
• Stage 6: Evaluate Proposals and Select Suppliers
• • Buyers choose proposal best suited to their needs.
• • Final choice may involve trade-offs between feature
such as price, reliability, quality, and order accuracy.
• 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 offerings and vendors.
• 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 analysis—examines each component of a purchase in
an attempt to either delete the item or replace it with a more
cost-effective substitute.
• • Vendor analysis—an ongoing evaluation of a supplier’s
performance in categories such as price, EDI capability, back
orders, delivery times, liability insurance, and attention to
special requests.
 THE BUYING CENTER CONCEPT

• Buying center Participants in an organizational buying action.

BUYING CENTER ROLES