ORGANIZATIONAL BUYER BEHAVIOR Dr. Vu The Dung Sep 2008
Discussion What is B2B Marketing? How does B2B differ from B2C Marketing? What is the potential weakness of Marketing Concept? Discuss the trends in Marketing Thinking and Practices. What do you think is the most important trends? What is 3C model? Why do Marketers care about the 3C perspective?
Case study Nắng Sài Gòn is a new, luxurious restaurant located in District 1. The Director asks his staff to go out to the stress to distribute brochure and leaflets. Discuss the director’s marketing solution? If you were a director of this restaurant, draw a brief B2B Marketing Plan to Market Nang Sai Gon.
Case study: Ferguson IndustriesGabe Ferguson needed a loan. Business was great this year for the family business, a company that made small fans used to cool personal computers. With business going so well, Gabe wanted to expand plant capacity by 25 percent. Unfortunately, the bank with which he had done business for over two decades was reluctant to provide him with the loan.As Jaime Trevino, president of the local North Crest Bank branch, explained, “I know sales are great this year. But last year, sales were barely at break-even and three years ago, you lost 10 percent when you lost the Apple account. As it is, you still have four customers accounting for 75 percent of your business. I think you need more steady growth.”“But Jaime, without more plant capacity, I won’t be able to get that steady growth,” Gabe complained.“Gabe, let’s look at ways you can get steadier sales first. Then if the expansion is still warranted, we’ll make the loan.”1. Why would sales vary so greatly for Gabe’s company?2. How can Ferguson Industries stabilize sales?
Case study: Abilene Heavy Equipment TiresAbilene Heavy Equipment Tires sells tires for off-road mining and forestry vehicles and construction equipment. The company also retreads the tires and provides services at the mine or construction site. Because customers’ equipment is considered production equipment, a flat tire means a loss of production. Quality service is an important element in Abilene’s business.Ken Arthur is the manager of Abilene’s service business. His responsibilities include managing a fleet of 12 heavy-duty pickup trucks that are used to reach customers’ equipment in the field for service. Ken buys three trucks each January, retiring each truck after four years of service. For the previous two years, he purchased Dodge trucks from the Abilene Dodge dealer, dealing directly with owner Don Tanksley.Today, December 20, Don stopped by Ken’s office. After saying hello and asking after the family, Don said, “Come on, Ken, I want to show you something I have outside in the truck.” As they walked outside, Don continued, “I know you like to hunt and I thought you might appreciate this little Christmas present. You’ve been a good customer for nearly 10 years, and I’d like to say thank you with this.” From the inside of his truck, Don pulled out a new Browning Citori shotgun.Ken eyed the new gun with appreciation, knowing that it retailed for at least $1,200. The custom carving on the stock, with Ken’s initials, probably added another $500 to the cost of the gun. He held it, admiring the balance, and then sighted the gun as if about to shoot. He thought about how nice it would be to use this at the annual dove hunt that Abilene sponsored for its customers.1. Is there any ethical problem with Ken accepting the gift? Why or why not?2. What factors could affect your decision?
Trends in Marketing thinking and practice From make-and-sell marketing to sense-and- respond marketing. From focusing on customer attraction to focusing on customer retention From pursuing market share to pursuing customer share From marketing monologue to customer dialogue.
Trends in Marketing thinking and practice From mass marketing to customized marketing From owning assets to owning brands. From operating in the marketplace to operating in cyberspace. From single-channel marketing to multichannel marketing. From product-centric marketing to customer- centric marketing.
Transactional vs. Relational Marketing Transactional exchange Relationship exchangeObjective To make a sale (sale is end result and To create a customer (sale is measure of success) beginning and relationship is the Customer needs satisfaction measure of success) (customer buys value) Customer integration (interactive value generation)Customer Anonymous customer Well-known customer understand Independent buyer and seller Independent buyer and seller ingMarket tasks Assessment on the basis of products Assessment on the basis of problem- and and prices. solving competence performanc Focus on gaining new customers Focus on value enhancing of e criteria existing customersCore aspects of Focus on products Focus on service exchange Sales is a conquest Sale as a agreement Discreet even (episodic perspective) Continuing process (historic holistic Monologue to be aggregated perspective) Individualized dialogue
Summary of Key Points – last class E-learning, e-resources, discussion online, up-to-date announcement Satisfy Customer need in a better way than competitors Marketing Mix 4P = 4C The Marketing Concept Sales vs. Marketing Concept 9
Marketing – Extended Model Suppliers Distribution Channel Target Customer Value Economic Emotional Company Competitors Government Community Interest groupsCultural/ Political/ Economic/ Legal/ Technological/ Environmental/ Demographic 10
Learning Objectives Purchasing Process Buying Influences 11
Purchasing Contribution to the Firm Provide appropriate levels of supply of the right product or service At the correct level of quality For the lowest total cost
How purchasing costs influence profit?
Trends in Purchasing Downsizing Outsourcing Earlysuppliers involvement Stronger relationship with suppliers Cross – functional teams Professionalism in Purchasing Ethical Issues Facing Purchasing Receiving gifts Access to Information
Typical Profile of Pro Purchasing Officer
Reasons to buy Factor Percent Product Quality 72.7% Service 53.4% Availability of Product 50.8% Total Purchasing Costs 40.5% Price of Product 32.2% Supplier’s supports in urgent situations 26.9% Ease of Contact with suppliers 18.6% Technical supports 15.2% Brand name 11.0% Source: Calners Advertising Research Reports
Buy Phase Model
Buy Phase and Marketing Techniques
Brand Relevance and Buying Situations
Purchasing Philosophy Adversarial purchasing Partnership purchasing or philosophy preferred supplier systems Many Suppliers Several Suppliers One Supplier
Factors influencing Purchasing Decision
Factors influencing Purchasing DecisionEnvironmental Organizational•Level of demand Interpersonal •Objectives•Economic Individual •Interests outlook •Policies •Age •Income•Interest rate •Authority Business •Procedures •Education•Rate of techno- •Status •Job position Buyer logical change •Organizational •Personality structures •Empathy •Risk attitudes•Political and regulatory •Culture •Systems •Persuasive- developments ness•Competitive developments•Social responsi- bility concerns
Group Project Form group of 4-6 students Choose a new products/ services and prepare a Marketing Plan to market your products/ services to B2B customers