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Business Marketing VTU,Module 2
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Business Marketing VTU,Module 2






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  • The contents, the various theories, strategies and approach of B2B marketing in all the Prof. modules are well explained, relevant and to the point. It has widened my scope of thoughts on Industrial marketing.
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    Business Marketing VTU,Module 2 Business Marketing VTU,Module 2 Presentation Transcript

    • Business/ Industrial Management
      Prof. Raghavendran.V
    • MODULE 2: Learning objective
      Organisational buying Activity
      Buying models and buying centre concept
      Inter Personal Dynamics of Industrial
      Buying Behaviour
      Roles of Buying centre
      Conflict Resolution in Decision Making
      Ethics in Purchasing
      Prof. Raghavendran.V
    • Buying/purchasing Objectives
      It is defined as buying a right items in the right quantity, at the right price for the delivery at the right time and place. The objective are stated as follows
      • Delivery/Availability.
      • Product quality
      • Lowest price
      • Services
      • Supplier relationship
      Prof. Raghavendran.V
    • Delivery/ adaptability
      To ensure that purchased goods and services are available or delivered when and where needed.
      If not delivered, work will come to grinding halt and this reflect on the performance of the purchase function
      Prof. Raghavendran.V
    • Product quality
      It should be consistent with the specifications and use of the product. It can happen that a product may meet the Indian Standard (IS) or British Standard (BS) specifications.
      It is important to ensure to consistency in quality to reduce cost of inspection, interruptions in production process due to rejections and arranging the replacement of rejected material
      Prof. Raghavendran.V
    • Lowest price
      Buyer would like to buy at the lowest price consistent with availability and quality of the product.
      This will be important objective, if delivery and quality criteria’s are met.
      Prof. Raghavendran.V
    • Services
      The industrial buyers need many types of services accompanying in the purchase of goods. Which are listed:
      • Prompt and accurate information of suppliers
      • Application or technical assistance,
      • Spare-parts availability
      • Repairs and maintenance capability &
      • Training ( if required)
      Prof. Raghavendran.V
    • Supplier relationship
      To develop long term supplier/ vendor relationship and to develop new sources of supply.
      Prof. Raghavendran.V
    • The organizational buying process
      The organizational buying (purchase) process consist of various phases of buying- decision making process.
      The importance to be given to various phases will depend upon type of buying situations.
      Robinson, Faris and Wind developed eight phases of decision making processand types of buying situations
      Prof. Raghavendran.V
    • Decision making process:
      It is also known as BUYPHASES and they are logical in sequence.
      Recognition of a problem or need
      Determination of application or characteristics & quality of needed product.
      Development of specifications or description of needed product.
      Search for and qualifications of potential suppliers
      Prof. Raghavendran.V
    • Continued
      Obtaining and analyzing supplier proposals
      Evaluation of proposals and selection of suppliers
      Selection of an order routine
      Performance feedback and post-purchase evaluation.
      Prof. Raghavendran.V
    • Recognition of problem
      It may originate within the buying firm or may also recognized by a smart marketer.
      Quality of material
      Prof. Raghavendran.V
    • Characteristics & quantity
      The buying firm will try to answer questions such as:
      what type of products/services to be considered?
      Quality control
      Prof. Raghavendran.V
    • Development of specifications
      Previous stage are closely related with this stage. Here prominence is given to technical specifications of the product.
      Prof. Raghavendran.V
    • Search for & qualifications
      To obtain all the relevant information & secondly to decide on acceptable or qualifying suppliers and it depends based on following:
      Type of buying organization
      The buying situation
      The decision making members
      General characters will be quality, reliability in delivery, service are considered to qualifications of suppliers
      Prof. Raghavendran.V
    • Obtaining & Analyzing supplier proposals
      Proposal can be formal offer, quotation or a formal bid submitted by supplier, it should contain product specification, price, delivery period, payment terms, taxes & duties, transportation cost, transit insurance and any other costing
      Prof. Raghavendran.V
    • Evaluation of proposals & selection
      Decision makers of buying organization may evaluate each suppliers on the set agreed parameters or factors. For illustration
      Prof. Raghavendran.V
      A supplier evaluation system
    • “Balanced scorecard Technique”
      It is technique/framework that can evaluate supplier performance in information age companies.
      It translates companies mission, vision into a set performance measurements. The frame work is divided into 4 parts and they are as follows:
      Financial, customer, internal business process & learning growth
      Prof. Raghavendran.V
    • Balanced scorecard framework
      Prof. Raghavendran.V
      To succeed financially, company should focus on financial objectives that will satisfy shareholders
      Internal-business- Process
      To satisfy shareholders & customers, what business process company must excel at ?
      Which customer value company should focus on, to achieve its mission
      Mission & Vision
      Learning and Growth
      How can company improve & change to achieve its mission
    • Internal- Business- Process
      Prof. Raghavendran.V
      Operations Processes
      Innovation Processes
    • Selection of an order time
      Mechanics of exchange of goods and services between buyer and seller is worked out. The activities include
      • Placement of orders
      • Quantity to be purchased
      • Frequency of order placement
      • Levels of inventory needed
      • Follow up
      • Payment terms
      Prof. Raghavendran.V
    • Performance feedback and post evaluation
      A formal or informal review regarding the performance of each supplier (vendor) takes place. The user department will give feedback on whether the purchased items solved the problem or not. If not, the members of the decision making unit review their decision and decide.
      Prof. Raghavendran.V
    • Types of Purchase/buying situations
      There are three types of buying situations called buy classes:
      New task /New purchase
      Change in supplier/ Modified rebuy
      Repeat purchase/ straight rebuy
      Prof. Raghavendran.V
    • The buy grid framework
      Prof. Raghavendran.V
    • Multiple buying influences
      The buying centre, the decision making unit, in business marketing is called buying centre. They consists of individuals or members who participate in buying decision & share the common objectives.
      Size-- varies
      Prof. Raghavendran.V
    • The buying centre roles
      Usually members of buying centre accept different roles during the buying process. These roles may vary for different stages of the buying process depending upon the buying situations, complexity of the purchase and the functions involved.
      Assume several roles which are as follows
      Users, buyers, influentials, deciders & gate keepers
      Prof. Raghavendran.V
    • Recognizing & identifying key persons
      Recognizing key influential is an important task carried out sales person.
      Identifying key members of buying centre.
      Top management persons
      Technical persons (functions)
      Marketing function
      Prof. Raghavendran.V
    • Models of Organization buying behaviour
      There are three models available to provide a comprehensive & integrated picture of major factors.
      The Webster and Wind Model
      The Sheth Model
      The Choffray & Lilien Model
      Prof. Raghavendran.V
    • The Webster & Wind Model
      Prof. Raghavendran.V
      Environment Variables
      Buying decision
      Individual Variables
      • Need & desires
      • Perception & learning
      Buying Decision Process
      • Individual decision making process
      • Group Decision making process
    • The Sheth model
      Prof. Raghavendran.V
      Component 1
      Component 2
      Component 3
      Situational Factors
      Supplier or Brand chice
    • The Choffray & Lillen Model
      Prof. Raghavendran.V
      Individual Responsibility
      Obtained set of alterative offers
      Interaction Structure
      Evaluation Criteria
      Sources of Info
      Organizational constraints
      Environmental Constraints
      Likely alternative offers
      Individual preferences formed
      Organizational preferences
      Organizational choices
    • Interpersonal Dynamics
      Organizational buying behavior ultimately influenced by forces within the organization.
      it is understand and examine the influence of purchasing activities on organizational buyer behavior and how groups and individuals differ in their approach.
      Prof. Raghavendran.V
    • Purchasing influence on BB
      Material requirement planning
      Just in time purchasing
      Centralized purchasing
      Prof. Raghavendran.V
    • Joint decision making
      Characteristics of the firm ( Employees, Function of the firm)
      Buying center interaction patterns
      Vertical involvement
      Lateral involvement
      Prof. Raghavendran.V
    • Psychological Factors influencing individual decision making
      Differences in role orientation
      Differences in information exposure
      Perceived risk in the vendor selection process
      Prof. Raghavendran.V
    • Assignment time:
      Write in detail about conflict and decision making:
      Refer Reeder Referral book
      Prof. Raghavendran.V
    • END of the Module 2
      Prof. Raghavendran. V
      Prof. Raghavendran.V