The Specificities of the B to B

marketing

By Hassouni Mohammed
 Presentation about me
• Msc ESC Toulouse in marketing management & communication . Aui alumnus
• Experiences in Marketing Research , insurance, and banking .
 Objectives of this lecture
• Understand the nature and the extent of Business to business activities
• Identify the essential characteristics of business to business markets .
• Learn the factors influencing the demand of goods and services business to business
• Understand the two key notions of sector and derived demand and measure their
importance in their implementation in B to B marketing approach
• Understand the characteristics of the organizational buying
• Examine the business to business buying processes and learn how to identify the
different phases
 Course introduction
• B2B marketing includes all the transactions of goods and services conceived and sold to other
organizations and corporate bodies (from the independent worker to the multinational
company as well as service providers, public organizations, associations or non-governmental
organizations).
• Industrial goods= all the goods destined for professionals. They include goods, products, and
services manufactured and sold by companies: industry, organizations, or businesses.
• The users of industrial goods are : Suppliers of raw materials, processors, assemblers, original
equipment manufacturers, wholesalers, manufacturers of semi-finished products,
distributors, and service providers.
• Industrial goods are extremely heterogeneous: wheat, cotton, cement, microprocessors,
motors, machine tooling, turbines, and aircraft.
• 3 types of business to business marketing :
-Mass business to business : like for instance equipment of SME, professionals in furniture and
equipment
-Industrial marketing : regular relationship between a supplier and a manufacturer like Valeo and
Renault
-Project marketing : through call to tender . Public projects like Casablanca’s trailway
 Outline
I The main areas of business to busines
II The characteristics of business to busines
III The sector and derived demand
IV The buying phase
 The main areas of B to B
• Kotler and Sapora method that divides goods in 3 categories:
- Goods entering into the final product (entering goods or input goods)
- Production goods entering directly into the manufacturing process (equipment goods)
- Facilitating goods, or industrial goods and services which do not directly enter into the
manufacturing process, known as supply goods.

• Another classification of B to B activities can be proposed to the final recipient:

-“B to B to C”: products and services sold to a professional integrator who resells them in the
market of the private individuals like Gore-Tex for clothing or organic flour for industrial bread .
- “B to B to E”: corresponds to goods and services sold from a company to employees needs such
as protection Equipment, small office automation or corporate catering without any commercial
transaction between employer and employee.
- “B to A to U”: In this context the client is an administration or government. The final user can’t
choose the good or service chosen by his government. The goods considered in this category are
aircrafts, buses, trains, hospital equipment, stadiums, schools, museums etc…
- “B to B”: when the good bought by the client company is used or consumed for the global
functioning , such as energy, machine tooling, etc…
 The main areas of B to B
• 1.1 Raw materials
bought and used in their natural state by initial processing industries, to produce other
industrial goods. They come from farming or forestry (wood, livestock, and fish). They can
sometimes come from extraction industries like for sand and minerals.
• 1.2 Processed goods
Raw materials that have undergone simple processing: cement, textiles, leather, glass, flour,
cocoa, resins, chemicals.
-nameless part of the final product .companies create added value by going beyond the simple
processing phase.
• 1.3 Consumables
Consumables, or supplies used for production cover all those goods that a company needs to
function including:
-Maintenance supplies like detergents, paints;
-Operating supplies such as lubricants, solvents, abrasives, sealants, greases, and fuels which
aren’t part of the finished product;
- Supplies that facilitate activity: small office supplies, paper for photocopiers or fax.
 The main areas of B to B
• 1.4 Ingredients and entering goods
Manufactured goods used in the fabrication of a product.
For example: polymer techniques such as pebax developed by arkema or the artificial sweetener nutrasweet
developed and produced by monsanto
• 1.5 Spare parts and components
Spare parts are industrial goods that can be directly assembled in the final product or which require few
modifications.
They all include components from the simplest(primary components) to the most complex
(sophisticated) :screws (primary component),bolts, ball bearing, gear boxes , microprocessors (sophisticated)
etc…
They can be either standardized goods or tailormade goods .
• 1.6 machine tools and automation
Machine tools and office automation are equipment goods that contribute to the growth of a company’s
activity by participating in the creation of its products and services. They can be divided into two categories:
-Light equipment goods: all the small tools, machines and materials that contribute to the growth of the
company’s activity such as electric motors, hand tools, PC’s, small photocopiers, office equipment, etc…
-Heavy equipment goods: equipment installations and machines used to produce products or services:
machine tools, production tools, mobile elevators, mainframe computers, crane, etc…
 The main areas of B to B
• 1.7 Large equipment
Large equipment which is subject to bidding especially for government bodies, public organizations,
and large international companies. It includes airports, highways nuclear power stations etc…
This category is subject to tailor made products or services for each customers and which don’t
produce constant sales flow.
• 1.8 Services
They are directly or indirectly involved in the manufacture of industrial goods. Corporate catering,
legal and financial services, marketing or management consulting, surveillance, engineering,
insurance, transport, leasing, among others all provide indirect support.
Services like cleaning, services equipment rental, temp agencies, maintenance and are more
directly involved in production.
• 1.9 Consumer goods for industry
Certain consumer products lead a double life, aimed not only at the general consumer public but
also at companies and diverse business organizations.
For instance certain material and office furniture, and corporate catering, products which are
normally sold on the consumer market but can be found in an identical form or specific
presentation. Foodstuffs like milk and yoghurt.
 The characteristics of B to B
• 2.1 A limited number of potential consumers
Sector concentration explains the limitation of the number of customers . If the sector is highly
concentrated, the small number of competitors means a limited customer base and the
obligation to take care of the client relationship within the limited number of client.
For instance: automotive industry, aeronautics, but also energy are good examples .for instance
there are 10 clients available for a seat car manufacturer in Europe.
• 2.2 A heterogeneous clientele
B to B is characterized by the considerable differences possible between two potential
customers of the same product:
-Size difference: a difference of between one to a 1000 is very common in the purchase of
supplies such as petroleum products, electrical equipment, but also photocopiers.
-Motivation difference: one company can be concerned with having guaranteed quick repairs,
while the competition might focus more on acquisition costs.
-Functioning mode differences: depending on the nature of activity sector, or structure(very
small, small and medium enterprise, large enterprises) , companies proceed in a very different
way in their purchase mode of the same good (centralized,localized,biddings,etc).
-Geographic differences: differences between customers located in the center of activity zones
compared to relatively isolated factories, including the international level.
• 2.3 An international clientele
For Some kinds of know-how, companies are compelled to look for clients abroad.
For example , The market for thermoshaped packaging for yogurt .
 The characteristics of B to B
• 2.4 A group buying process
Companies have a buying center. The buying center encompasses all the people concerned by acquisition whether buyers, users,
prescribers, or decision makers. It must distinguish from buying department which is only one of its components.
• 2.5 The active role of the customer
The customer himself participates in the quality of the product or service sold, from studies to consumption of the product:
-Right from the pre-study phase, the customer specifies its needs to the supplier.
- The sales efficiency of the industrial customer contributes to ensuring that the products and materials purchased provide
satisfaction.
-The industrial customer plays an active role by his capacity to sell the planned for quantities of the product, to his ability to
correctly use the material.
• 2.6 A high level of reciprocal involvement between customers and suppliers
All B to B transactions between suppliers and customers =chaining of successive sale. In B to B loyalty between customers and
suppliers is higher .several studies show that the average duration of a relationship client supplier last in average 10 years (often
more for equipment goods, less for technical or financial elements).
The main reason here is the technical complexity of projects, which require constant working together: the more time spent
with the client, the better he is known, the greater the chances of gaining his trust .The change of suppliers can be detrimental in
terms of costs, methods, quality, warranty and safety etc…
Thus a double commitment from the supplier:
- concerning the confidentiality of the customer’s projects. A supplier works for six years with a client in the automotive
industry. They often work with competition so confidentiality is imposed
- To guarantee his customer the availability of spare parts, or even specific consumables, for the lifetime of the equipment, in
particular in the machine tool sector.
 The characteristics of B to B
• 2.7 The creation of value
Clients company buy a product for its benefits . the common mistake is to believe that because a
product is technically good; it will be bought by a client company is wrong .thus it is the benefit
drawn by customer company that value is measured and not according to the acquisition cost
estimation. A product that solves client problems will be preferred to another good one.
• 2.8 Specialized promotion means
The most common way of meeting customers and presenting the company’s know-how is trade
shows. Trade magazines are even more frequently used by all sizes companies . they involve
smaller budget, the price of an ad is calculated as a function of much smaller audience than for
consumer magazines .
• 2.9 The “extended” life cycle of products
Thanks to R&D and sales teams, it frequently happens that products and incorporable systems
developed by a new company have new applications fields. these applications extend their
lifecycles.
For instance Dunlop,Teflon, corian, goretex, and lycra who started in the 60’s are still extending
their activities today .
 The characteristics of B to B
• 2.10 The development of specialized tools on the internet
B TO B PORTALS: a generalist site which provides professionals with tools or qualified information.
Web2cad.fr for mechanical engineering professionals.
THE B TO B COMMUNITY: a privileged personalized space requiring a password where each visitor can
define his profile and configure his next visit to the site depending on his particular interests.
B TO B BLOGS:. in B to B , they are used by companies in order to take into account customers opinions to
detect tendencies ,as well as improvement axes (image, proposed offer, relationship).
Purchasing tool and Sales Tool:
Internet reduces operating costs when it comes to purchasing supplies .
E-PROCUREMENT: a system that allows companies to get their supplies on the internet. several
companies of the same sector group together and put in common their requirements so as to benefit
from a mass effect vis a vis their suppliers. in the automotive sector( supply on created by car parts
manufacturers Bosch, continental, ina ,sap,zf), in aeronautics(aeroexchange, airnewco…) , and the
metallurgical industry (steel 24-7).
E-MARKETPLACES: market online where buyers and sellers can make transactions . buyers have access to
more sellers than in real life and vice versa. They can be horizontal(they allow companies to buy and sell
non-strategic products on the web, or general purchases) or vertical ( category of goods or activities).
SPACES RESERVED ON THE SITE: professional buyers can have privileged access to a reserved space on the
site where specific information is provided(price, project, new standards, etc..), and dedicated interactive
zones( space for discussion, consultation or making orders).in addition to its corporate site , dhl offers to
its customers online tracking of packages thanks to a special number and direct contact with sales
department.
 Sector and derived demand
 Demand from companies downstream in a sector determines the level of activity of those
upstream. The industrial chain is the basis of derived demand. The success of a supplier’s
product is linked to the success of his customer.
For example, An electronic component is meaningful only in the context of an anti-locking system. A
fiber of textile has sense only in the context of the undergarment in which it is incorporated.

 The term sector comes from the vertical presentation often used to represent the complete
production chain and its interdependence from basic materials to the finished product. In this
chaining every actor is involved with partners either downstream, upstream, or at the same
industrial level. The supplier /customer chain has two main consequences: dependence on
activities downstream in the sector and the opportunity to take action at many different levels.
In the automotive industry , a decrease in the miles driven by European + a decrease in the
purchase of new cars decrease of activity in the sector Michelin undergoes a decline in sales of
tires and in renewal of cars already in the market .
 Sector and derived demand
• The interdependence of links implies several levels of marketing . In B to B , top management
should always reason in terms of their customers but also , the customers customer ,and the
customer of the customer’s customer .
• To win a customer and keep his loyalty, the best method is often a discussion about his own
customer, to provide him with information and studies on the demand for his own products
(marketing studies).
• Market studies and promotion should be used to target customers at two levels:

-Studying your customer’s customer: Faurecia has become the leading supplier of car seats in
Europe by developing studies on their final customers, drivers, and passengers. Those studies are
either medical studies (back problems, fatigue), or satisfaction regarding the seats. A specific
focus is given to customer reaction to seats shape, or to seat heating, position adjustment. thanks
to those studies Faurecia can help its customer by design ,choice of options, and equipment of
future models. By a position upstream suppliers can get ahead of the competition.

- Influencing the customer’s customer: Invista with lycra, clearly illustrates the different levels of
marketing actions available to a supplier positioned upstream in a sector, in terms of promotion.
 Lycra case
• Lycra is a brand from the multinational company invista specialized in fibers, polymers, and
intermediary products . invista implements a pull strategy involving several levels of actions ,
which requires a careful analysis of the different actors within the sector .
• First target: Manufacturers
The first level of intervention is the direct customer, the reel producers, and the hosiery
manufacturers (Dim, Well, Le Bourget, Rosy) . If they don’t choose lycra , any other measure is
pointless . Invista must target :
- The production manager: if the hosiery production process does not allow use of lycra ,due to
technical constraints ,lycra won’t be chosen .
- R&D: to intervene right from the design phase of the new product. The ideal situation would
be for the fiber in question to be an integral part of the new specifications.
- Marketing department: which works with R&D on choosing and perfecting new products ,and
which could use its influence .
- Sales department: which is in contact with distributors of the finished goods.
- Functional technical departments : such as quality ,which above all are concerned with the
reliability of the different production processes .
- Purchasing department: aim is to gather a maximum of information on the different materials
available on the market and the different competitors .
The arguments highlighted will be different depending on the public concerned.
 Lycra case
• Second Target : Distribution
- Operations targeting main decision makers : buyers, and working group managers in the
buying centers , as well as operational managers in the textile departments ,selected because
they are considered as opinion leaders or work in key points of sale. (provision of documents
including studies on consumer behavior and trends with references from other countries of
comparable situations; detailed action plans on the final target(media planning, copy of TV ads
etc…)
- More traditional communication operations in trade magazines : consumer oriented
operations from the lycra media-planning that shows different finished products made with
lycra
- Operations targeting those in charge of distributor brands: with the aim of convincing them to
require from their manufacturers to use lycra and make it visible to end customers on packaging
in order to legitimate the distributor brand.
 Lycra Case
• Third target : the final consumer
How to distinguish this fiber from competition ???
Means used: the product itself and its packaging .the mkt department will try to obtain the
presence of the lycra logo on the packaging , next to the logo of the manufacturer brand.
• Possible reactions of the marketing department of the customer manufacturer :
-Desire to use allied marketing: the manufacturer –customer will seek to take advantage of the
different marketing actions related to lycra brand , which will in turn strengthen his own
marketing strategy .
-Fear that his own product will become banal: the manufacturer will fear that his product will
lycra . In this case the consumer may think that all the other products contain lycra and therefore
there will be a loss of perceived difference.
 Lycra case
• The strategies available to Invista to highlight its supplier brand for its clients :
Action 1: proposing to a manufacturing client to be the first to have an
upstream innovation  better brand value since final customer will associate
supplier brand to new advantage.
Action 2: the second advantage lies in the convergence of information contained
in advertising.
Action 3: the Lycra media planning in other words(The choice of media and
supports; The calendar for magazine or television ads)
Action 4: the presence of the customer product in the supplier advertising. It is a
nudge to select the right customers. It is an incentive to a bigger creativity.
Action 5: technical assistance can be provided to the technical, functional and
production departments to ensure the first productions including the material or
the new process .
Action 6:.when the agreement concerns a material supply; there can be financial
participation in common actions: it is sometimes the case on promotions with
the organization of “special display”, an animation day at distributors place.
 The Buying center
• All the functional and operational managers who take part in the final buying decision, rather
than merely the buying decision.
• The buying center has a lateral function or width (number of departments concerned by the
decision) and vertical function or depth (number of levels within the hierarchy concerned by
the decision). The greater the risk the greater larger the width and depth.
• Buying process and act of industrial buying have been thought of as rational compared to the
more emotional behavior of individual consumers.
• A professional buyer looks for performance improvement and satisfying the expectations of
buying center members. The criteria’s of choice don’t have the same weight for every
member. Some factors can be both rational and non-rational like geographical location.
• the main rational buying criterias are price level, delivery delay, conformity to specifications,
quality, accuracy of estimates and summary on work completion, aftersales service proposal,
proximity of distributor or of suppliers sales office, user’s physical safety, managers
availability .
• The non-Cartesian reasoning are supplier’s prestige and reputation, length of relationship,
supplier’s geographical location, national role of the supplier’s investor, interlocutor’s
background.
 The buying center
• The perceived risk criterion
Perceived risk occupies an important and ambiguous place in the buying behavior analysis .it
can be explained through perceived risks for:
-the company concerning supplies security or in terms of protection against exchange rate
fluctuations
-the buyer himself contesting the final choice of other departments , suggestions that he took
the easy way out ,favoritism, etc…
The decision type depends on the buyer’s behavior towards risks, behavior dependent on
individual characteristics, previous experiences and risk’s perception .if the risk of purchase is
high, the buying department will alert the company and the buying process will be made in
several phases.
•
The buying center
The decision makers
Persons who make the final decision. In general the management board committee in big
companies, and the top manager and a competent manager in small sized one.
• The buyers
The buying department which yield its prerogatives to the profit of various prescribers for the
purchase of goods and complex services. The main functions are:
-to collect information concerning the different market solutions available to the company,
taking into account in-house constraints such as technical know-how and financial constraints.
- to make a list of the different national European and overseas suppliers who could be
appropriate for the company’s needs .
This preselect ion function becomes more strategic because of :
-the increase search of competitiveness (competitive advantage at buying)
-the speed of globalization of supply (sourcing)
-the reinforced professionalization of the job with more specialized training (legal, international
negotiations, management of profit center)
-the ethical dimension of purchase and strategic orientations taken by industrialists in the
sustainable development
-The set up and exploitation of new buying management tools (marketplaces, e-procurement,
supplier relationship management, SRM).
• The influencers
The buying center
Influencers vary a lot from a company to another according to sector and company culture.
Internal influencers are functional managers who positively or negatively influence other members of the buying
center regarding the product or service of a specific supplier. We have essentially the quality department,
maintenance department, the R&D, marketing and sales departments. Concerning Lycra, the R&D, maintenance,
quality marketing &sales were involved as influencers.
External influencers have an effect on the members of the buying center. These include customers, professional
experts and journalists. For Lycra we have the designer jean Paul Gauthier who accepted to work for Lycra for the
organization of a fashion show. The marketing managers of leading retailers such as galleries Lafayette Carrefour for
lycra
• Users
The importance of users varies considerably depending on:
-The prestige of the user : a surgeon rather than nurses ,engineers rather than technicians ,pilots rather than bus
drivers
-National culture: Scandinavian countries and japan have a long time taken into account the opinion of future users
of machine tools, cars, etc... This is not the case in southern countries. In France, user opinions are regularly taken
into consideration assuming they allow improving the company ethos based upon final customers’ satisfaction.
-The size of companies: statistically, big companies have developed more tools for integrating users in decision
making processes.
Industrial buying is the result of a collective decision made by a varying number of people, who are more or less
involved and not very homogeneous.
 The Buying phase
1)Anticipation and recognition of a need
By Watching technical departments, this could be for instance improving quality by decreasing
the amount of waste, or replacing equipment which damaged a certain cutting tool. The
feedback is made up of feedback of dissatisfaction to the buying department.
Within the sales and marketing department, it consists in improving customer satisfaction by
correcting a product weak point: packaging that takes too much room when empty, integration
of more recyclable products, and replacement of an ergonomically unsatisfactory control
button.
2) Defining the characteristics and quantities to be purchased
The expected performance is defined in terms of type of products, material, tools needed, and
the quantities necessary for a given period of time.
The biggest difficulty for the salesperson is to identify the final decision maker. When it is a new
product the latter is scarcely from the buying department, he is rather in the general
management or in technical engineering department.
3) Investigation and qualification for potential sources
This phase consists of drawing up a list of suppliers whether in company’s books or out with
whom there have already been exchanges in the past or who have never supplied the company.
One common method consists in listing suppliers based upon their brand awareness through
trades’ shows, trade press.
 The buying phase
4) Collecting and analyzing proposals
The collection of information should be objective and scrupulous, with no preconceived ideas
and trying not to take previous experience into account. The main criteria’s are quality& cost as
well, the level of presence of the supplier. For equipment a supplier who proposes tailormade
solution has more chances.
5) Choosing suppliers and the ordering process
Choosing the ordering process depends on in-house constraints, notably technical ones. For
example, Just in time production needs a special organization to which the supplier must adhere
to .the choice also depends on the proposals and possibilities of various suppliers depending on
their own logistical organization (logistic center, proximity of supplier’s production site).
6) Information feedback and performance evaluation
Marketing and sales department + production check the anomalies and give feedback about the
purchases made buying center. afterwards respect of the specification sheet will be judged from
a technical and a commercial aspect (speed of delivery, regularity, flexibility, repair service
capacity).
 Case of renault
• 800 people work in the buying department and are in charge of constantly analyzing and
negotiating with suppliers .the main criteria are quality, costs, delays, innovation, adaptation
ability and improvement of components manufacturers and subcontractors. Purchases = 80%
of the cost a Renault.
• The SRM is the privileged contact of suppliers which needs to:
- know the industrial and economic area of suppliers
- look for suppliers able to come up with innovations or cost reduction
- select suppliers on the parts
- lead the negotiations
- elaborate and follow up improvement plans with everyone (costs, quality, and delays)
- manage the capacities for transverse needs (checking of capacity and specific means: press,
equipment…), and find out solutions in case of insufficient capacity.
• SRM:
- Quality and development of suppliers department aimed at quality improvements at suppliers.
- an entity of hundreds of people in charge of managing the purchases ,associated information
systems and running the setting up of electronic tools for inversed auctions, online biddings,
collaborative tools of development
- the strategic cell that establishes purchase criteria and gives Renault’s strategic directions to
suppliers .it follows up its suppliers financial situation who have to annually present their
accounts .
 The different situations
• 1. The straight rebuy
It corresponds to an unchanging need. The evaluation criterias are known as well as the appointed
suppliers. Commercial relations are stabilized thus favoring the partners in place. For this buying
pattern, the decision maker remains the buyer or the top manager of the buying department, and In
second place there are the users who experience the benefits of the company.
• 2. The modified rebuy
This situation involves a wish to modify the response to an existing need. This is true for a product in
the maturity phase, for which the company would like an improvement in quality or reduced costs.
This situation can hide dissatisfaction with current suppliers who could have proposed a modification
or at the very least, a direction in which to conduct improvement research.
In this scenario, the company will try to find out more information about other possible procedures
and other possible suppliers. This is an opportunity for a supplier who isn’t in the company’s book to
be the best regarding that particular improvement.
• 3. New task
In this context the risk is at maximum, and interlocutors are highly involved within the buying
center .this is why the opinions of the influencers and advisors predominate: external (they have
already experienced such situation) and then in-house influencers.
In order to obtain new solutions, information is primordial and members of the buying center should
spend a lot of time collecting and selecting it. If a project is new, it is better to choose in-house
production because it helps the company to keep complete control.
 The different models
• Up to the 1980’s most studies dealing with industrial buyer focused on:
- Industrial customers, and understanding the buying decision and the factors which affect the
choice of suppliers
-The marketing decision from the suppliers side , aimed mainly at 2 types of study : (those
concerning the effect of a particular part or combination of parts of the marketing mix on the
industrial markets; those concerning best adapted organizations to decision implementation).

• These two approaches have increased our understanding of industrial buying behavior, in
particular using methods from goods of the consumer market marketing:
-Globally using models
- Bit by bit, by analyzing a precise element of the buying process, a particular variable of the
buying behavior, or by focusing on how the risk is perceived.
 The Robinson and Faris model
• Robinson model or buy grid model uses three buy classes and the different buy
phases. It demonstrates possible lines for industrial behavior research. It initiated
sequential analysis of salesperson tasks.
Before going to meet the customer, the salesperson must have the reflex to ask him:
• what is the customer’s buying phase??
• What type of buying does the project represent for his customer? and, consequently,
who are the representatives concerned and how important is each one of them?
The advantage of this model is it pragmatism, usefulness and strategic interest.
The inconvenient is that it doesn’t deal with the composition and workings of the buying
center.
It doesn’t take account of:
-Individual variables between decision makers (training, past experience, degree of
satisfaction with previous sales, etc…)
-Particular company variable (size, sector, etc…)
- Variables linked to the product (deadline pressures for responding to needs, perceived
risk level…)
The Robinson and Faris
model
 Ozanne and Churchill Model
• Five factors in the process of adopting industrial goods:
- Factors at the origin of the adoption process
- Factors which condition the final decision
- The time factor, in other words the length of the process
- Other envisaged solutions
-The role of information sources
 Webster and wind model
• Buying behavior is dependent on 4 parameters:
- The individual characteristics of the buying center members (personality, motivation, cognitive
structure, preferences…)
- The interpersonal relationship between the buying center members (users, advisors, decision
markets, buyers, filters) the interaction, the structure of the group, leadership models
- The organizational characteristics linked to the buying problem, the technology, the structure
- Environmental factors: economic, technological, legal …

• The main criticism of this model is that it is too pedagogic and lacks information concerning
the nature of the influence exerted by environmental factors, and the influence of past and
present supplier strategy on industrial buying behavior.
 The Sheth model
• Industrial buying behavior is based upon three main elements:
The buying center: the members of the centers have different motivations, expectation dues
differences of roles in the organization.
The explicit expectations identified in order of importance are:
1) The product quality
2) Delivery delays
3) Services associated with the products
4) The prices
Among the implicit expectations, we find:
1) The reputation
2) The size
3) Geographical location
4) The existence of reciprocal agreements between the buyers and the suppliers
5) The personality
6) The competence
7) The lifestyle of the supplier’s sales staff
 The Sheth Model
The influence of the buying situation:
• The buying situation influences the process and the individual or collective character of the buying decision.
• The collective decision can be favored by :
-the large size of the organization,
-the importance and newness of the products,
-the intensity of perceived risk.
• The individual decision can be favored by :
-the small size of the company,
-the centralization of the buying operations,
-the urgency of the needs process,
-the weakness of the perceived risk
Collective decision making:
• It often causes conflicts whether obvious or not, between individuals with different objectives and
perceptions. 4 types of conflicts resolution within the buying center:
- Problem solving: looking for agreement after a more in depth study (taking into account new supply
opportunities, new information investigations);
-agreement by persuasion: argumentation;
- The negotiation: obtaining a conciliatory attitude in return for reciprocity in future decisions;
- Bargaining: in addition to a conciliatory attitude, this implies taking into account interpersonal conflicts and
purely political moves;
The sheth model
 Choffray and lilien
• This model isolates the most significant variables.
• This gives an operational model where the buying decision is directly influenced by marketing
variables such as publicity, controlled by the potential supplier.
• It has the advantage of allowing easy quantification and facilitating market segmentation
through established differences in the composition of buying centers between categories of
participants with different criteria.
 The inductive approach
Grounding models Supplier choice model Matbuy model (moller)
Need recognition - Purchase kick-off
Specification definition Bid preparation Definition of the evaluation
criteria
Search for suppliers Search for suppliers Collect of suppliers
information
- Short list Short list
Analysis of proposals Analysis of proposals Analysis of proposals
- - Negotiation
choice choice Choice
Performances evaluation - Implementation
 The interactive approach
• The idea is that buying is an interactive process which cannot be studied in isolation of selling, and that the seller-
buyer pair or dyad, must be the element upon which the analysis is based .the buying process is analyzed at the
same time as the selling one.
• The dyad model consists of 5 dyads:
-the seller buyer dyad,
-the seller selling company dyad (supplier),
-the buyer buying company dyad (customer),
-the seller representation-buyer representation dyad,
-the selling company-buying company dyad.
• The interaction model is made of 4 elements :
-The interaction process (exchange of products, services, information , financial and social exchanges , in a punctual
or long term way ,nature and intensity of the exchanges, importance of personal contacts, etc…),
-the interaction participants (individual nature, culture, type of functioning of the organization, technology strategy
of the two parties ),
-the relationship atmosphere (created climate ),
-the environment (structure of the markets, degree of internationalization).
• Numerous studies have been made and developed based upon interaction model:
- Deepening knowledge of the interaction process,
- Highlighting the relations and influences within these interactions,
- Applying traditional industrial marketing approaches,
- Applying these studies to a network of people connected to the supplier and the customer.
 Market places evolution
• The buying department can focus more on negotiating and developing partnerships with
suppliers thanks to the elimination of administrative tasks . The virtual mode of
communication is not always well perceived by the buyer.
• E market places = places for buyers and sellers can meet and exchange information on
products and services .there are 3 types of markets managed by supplier (seller side), buyer
(the buyer side), or by an intermediary (horizontal or vertical) .
• In the aeronautics sector there are different types of market places from private markets to
market places controlled by competitor companies in the sector. They are mainly vertical
(specific to the sector). For product of lower importance horizontal web sites are used
instance market place partsbase.com for defense space and aeronautics. Eprocurement
simplifies customer relationship, increases the volume of orders and allows automatic
management of the catalogue. For strategic purchase eprocurement didn’t change for
strategic purchases. Professional buyers prefer suppliers already known on the market with
well established brands as well as suppliers with which companies have worked.
 Purchase marketing
• The role of a purchase department consist in making the company more performant by
looking to efficient products and services even if their cost is higher .the role of the purchase
department is the one of a profit center ,whose goal is to watch out what is best in terms of
products and methods on the market .
• Purchase marketing requires a new state of mind, far from the arrogance of certain large
organizations. The change can be summarized by the two following question:
-Do we have the best suppliers?
-If we have the best suppliers, are they doing their best for us? For Renault is Valeo doing the
same for Volkswagen.
 Purchase Marketing
• Purchase marketing has specific objectives:
-supplying the production infrastructure in terms of necessary quantities and qualities requested
by production managers.
- scanning the different upstream markets and studying the suppliers to know who is the most
competitive and innovative and in which products
-knowing how to effectively and attractively present the company to potential suppliers and
explain the different company product.
-concisely presenting the company’s needs, particularly those which are still unsatisfied, by
setting out the expectations of the main persons concerned.
- stimulating the competition between the suppliers in order for the company to have a balanced
portfolio of suppliers, similar to that sought after in the customer portfolio.
-facilitating the process of working out supplier proposals; the maximum of information should
be shared.
-giving the company a competitive edge by rooting out a more efficient supplier , getting him to
put together a product better suited to the company’s need or persuading him to make a greater
effort concerning prices in order to work with the company .
-acting as a source of proposals.
 Means of action
• New approaches have been developed to collect information about suppliers like:
-company needs on the internet: the company can presents its needs and projects in
progress to worldwide suppliers .it implies a better comparison of suppliers offers according to
specifications.
-Supplier conventions: the company organizes a day during which it presents its general
policy, the main directions in which it is moving, its main objectives, in-house structure, and
culture, key values that it shares with its personnel and transmits to its customers as well as its
sales and financial results by activity.
- taking part in inverse fairs: it enables the company to collect information about suppliers
and classify it by categories .the company must take care of the suppliers representative by
planning an appointment in less than three months, even for a first time; by respecting
appointment times, by setting up a comfortable waiting room with documents covering the
widest possible range of up to date information about the company and possibly access to a
phone.
-The adaptations to be considered by the company: Creating a win-win atmosphere. This
strategy originates from the idea that any company will be prosperous within an environment
of equally prosperous customers and suppliers.
 Case of EADS
EADS has a purchase marketing policy based on purchase marketing principles. 50% and more, the
performance and competitiveness of companies depend on their suppliers. Cycles and costs reduction,
optimization of financial flow, quality improvement, and costs control are progress factors involving
suppliers or company’s partners. The buying policy has been followed by a reorganization of the buying
departments according to activity and project .

• The objectives of the purchase marketing at EADS

The biggest choice of observed employed technologies, services, and processes that allow the less costly
and more reliable solutions. The better choice, the easiest sale. That’s why the objectives of EADS are:
-define the buying act depending on market resources.
-Study the improvements in order to have reduced global costs on the whole lifecycle or sold products
(standardization, modernization…) - the buy price is considered as a global cost factor.
- Use market knowledge for the progress plans negotiation with suppliers or for the new supplier’s
introduction
-prepare products’ evolutions
-help at decision making: make or buy choice of technologies, products, suppliers…
-calibrate itself permanently vis a vis competitors in an evolutionary reference frame.
 Conclusion
• Marketing B to B deals with relations between supplier company and client company .
• Those relationships vary a lot based upon the context B to B to C, B to A to U, B to B to E.
• The derived demand is the key element in the supplier marketing policy .
• Knowledge of the purchasing phase is critical for the sales team . It helps making efficient
sales policies .