Business to Business (B2B) Presented By LOKESH GUPTA RAKESH SONAR MANISH PANDEY VIKASH SHARMA BAIJNATH MANDAL ADITYA MAHAKULKAR Balaji Institute Of Telecom Management (BITM) Pune
Organizational sales and purchases of goods and services to support production of other products, to facilitate daily company operations, or for resale.
transactions between businesses.
both the buyer and the seller are business entity.
Like between a manufacturer and a wholesaler or a wholesaler and a retailer.
Flows within a B2B market
Nature of demand - derived, joint, inelastic.
Purchase Decision Process.
Sizes and Numbers of Buyers.
Characteristics of B2B markets
Nature of Demand
Derived Demand : demand for a resource that results from demand for the goods and services that are produced by that resource.
Joint Demand : demand for a product that depends on the demand for another product used in combination with it.
Inelastic Demand : demand that, throughout an industry, will not change significantly due to a price change.
More intense than consumer relationships
Require better communication among the organizations’ personnel.
Primary goal of B2B relationships is to provide advantages that no other seller can, for instance:
Better quality and reliability
More favorable financing terms
The Purchase Decision Process
Businesses must understand the dynamics of the organizational purchasing process.
Decision-makers at several layers may influence final orders.
Process is more formal and professional than with consumers
Sizes and Numbers of Buyers
Business market features a limited number of buyers.
Use statistical information to estimate the size and characteristics of business markets is available
Business Categories Government Markets Reseller Markets Federal, state, and local Wholesalers and retailers Institutional Markets Hospitals (profit and nonprofit), educational and religious institutions, and trade associations. Business Firms Manufacturers of tangible goods and firms that provide services such as health care, entertainment, and transportation
The Buying Process Recognize problem or opportunity Determine desired product characteristics and quantity Describe desired product specifications Make purchases and evaluate performance Evaluate and select suppliers Locate and qualify suppliers
Stage 1: Anticipate a Problem/Need/Opportunity and a General Solution • Example: Desktops cannot be used anywhere the user want. Stage 2: Determine the Characteristics and Quantity of a Needed Good or Service • Example: Offering a Laptop system that are mobile. Can use any where the user want. Stage 3: Describe Characteristics and the Quantity of a Needed Good or Service • Example: Firms need the laptops that fulfill the requirement of the customer. also anticipate the quantity of that product.
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.
THE BUYING CENTER CONCEPT
DEVELOPING EFFECTIVE B2B MARKETING STRATEGIES
Formalized purchasing procedures
Bids: written sales proposals from vendor
Specifications: written descriptions of needed goods or services
Group purchasing is an important factor
Challenges of Government and Institutional Markets
Classifying Business Buying Situations
Recurring purchase decision in which a customer repurchases a good or service that has performed satisfactorily in the past
Purchase decision in which a purchaser is willing to reevaluate available options for repurchasing a good or service
First-time or unique purchase situation that requires considerable effort by the decision Makers
Who is the Customer?
Volume of Transaction?
B2B much higher.
B2C very less as compare to B2B.
What does the customer do with your product?
B2B Uses it for business purpose to make another product.