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b2b marketing

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  • Add Hitachi ad on page 191 to right side of this slide
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    • 1. Business-to-BusinessBusiness-to-Business Markets:Markets: How and Why Organizations BuyHow and Why Organizations Buy Chapter SixChapter Six© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
    • 2. 6-2© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Chapter ObjectivesChapter Objectives  Understand the characteristics ofUnderstand the characteristics of business-to-business markets, business-business-to-business markets, business- to-business market demand, and howto-business market demand, and how marketers classify business-to-businessmarketers classify business-to-business customerscustomers  Appreciate opportunities for using e-Appreciate opportunities for using e- commerce and social media in business-commerce and social media in business- to-business settingsto-business settings  Identify and describe the differentIdentify and describe the different business buying situations and thebusiness buying situations and the business buying decision processbusiness buying decision process
    • 3. 6-3© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices:Real People, Real Choices: Decision Time at NCR CorporationDecision Time at NCR Corporation  Which option should NCR pursue inWhich option should NCR pursue in order to market the new generation oforder to market the new generation of point of sale workstations effectively?point of sale workstations effectively? • Option 1:Option 1: Attend the trade show as inAttend the trade show as in the pastthe past • Option 2:Option 2: Skip the show this year andSkip the show this year and reallocate resources to otherreallocate resources to other alternativesalternatives • Option 3:Option 3: Forego the show this year andForego the show this year and find out if the venue and sponsorshipfind out if the venue and sponsorship changes are realchanges are real
    • 4. 6-4© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Markets: Buying and SellingBusiness Markets: Buying and Selling When the Customer is Another FirmWhen the Customer is Another Firm  Business-to-business marketingBusiness-to-business marketing The marketing of goods and servicesThe marketing of goods and services that businesses and otherthat businesses and other organizations buy for purposes otherorganizations buy for purposes other than personal consumptionthan personal consumption • Business-to-business (organizational)Business-to-business (organizational) markets include manufacturers,markets include manufacturers, wholesalers, retailers, and otherwholesalers, retailers, and other organizations such as hospitals, andorganizations such as hospitals, and governmentgovernment
    • 5. 6-5© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Factors That Make a DifferenceFactors That Make a Difference in Business Marketsin Business Markets  Business markets differ from consumerBusiness markets differ from consumer markets in several ways:markets in several ways: • Multiple buyers are involvedMultiple buyers are involved • Fewer organizational customers existFewer organizational customers exist • Order quantities and cost are muchOrder quantities and cost are much largerlarger • Business customers are moreBusiness customers are more geographically concentrationgeographically concentration  These differences make B2B marketingThese differences make B2B marketing more complexmore complex
    • 6. 6-6© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business-to-Business DemandBusiness-to-Business Demand  Business-to-business demand differsBusiness-to-business demand differs from consumer product demandfrom consumer product demand  Demand is:Demand is: • DerivedDerived • InelasticInelastic • FluctuatingFluctuating • JointJoint
    • 7. 6-7© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business-to-Business DemandBusiness-to-Business Demand  Derived demand:Derived demand: • Demand for organizational products isDemand for organizational products is caused by demand for consumer goodscaused by demand for consumer goods • Changes in consumer trends canChanges in consumer trends can impact B2B salesimpact B2B sales  Inelastic demand:Inelastic demand: • Changes in price have little or no effectChanges in price have little or no effect on the amount demandedon the amount demanded
    • 8. 6-8© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business-to-Business DemandBusiness-to-Business Demand  Fluctuating demand:Fluctuating demand: • Small changes in consumer demandSmall changes in consumer demand create large increases or decreases increate large increases or decreases in business demandbusiness demand • Life expectancy of the product canLife expectancy of the product can cause fluctuating demandcause fluctuating demand  Joint demand:Joint demand: • Demand occurs for two or more goodsDemand occurs for two or more goods that are used together to create athat are used together to create a productproduct
    • 9. 6-9© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Types of Business-to-BusinessTypes of Business-to-Business CustomersCustomers  Producers:Producers: • Individuals or firms that purchaseIndividuals or firms that purchase products for use in the production ofproducts for use in the production of other goods and servicesother goods and services Example:Example: Dell buys RAM chips forDell buys RAM chips for integration into their PCsintegration into their PCs  Resellers:Resellers: • Individuals or firms that buy finishedIndividuals or firms that buy finished goods for reselling, renting, or leasinggoods for reselling, renting, or leasing
    • 10. 6-10© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Types of Business-to-BusinessTypes of Business-to-Business CustomersCustomers  Organizations: Government markets:Organizations: Government markets: • Federal, state, county, and local governmentsFederal, state, county, and local governments that buy goods and services to carry outthat buy goods and services to carry out public objectives, and support theirpublic objectives, and support their operationsoperations  Organizations: Not-for-profit firms:Organizations: Not-for-profit firms: • Organizations with charitable, educational,Organizations with charitable, educational, community, and other public service goalscommunity, and other public service goals that buy goods and services to support theirthat buy goods and services to support their functions and to attract and serve theirfunctions and to attract and serve their membersmembers
    • 11. 6-11© 2012 Pearson Education, Inc. publishing as Prentice-Hall. North American IndustryNorth American Industry Classification SystemClassification System  Marketers use the North AmericanMarketers use the North American Industry Classification System (NAICS)Industry Classification System (NAICS) to identify their customers and to findto identify their customers and to find new customersnew customers • NAICS is a numerical coding ofNAICS is a numerical coding of industries in the United States, Canada,industries in the United States, Canada, and Mexicoand Mexico
    • 12. 6-12© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business-to-BusinessBusiness-to-Business E-Commerce and Social MediaE-Commerce and Social Media  B2B E-CommerceB2B E-Commerce Internet exchanges between two or moreInternet exchanges between two or more businesses:businesses: • Includes exchanges of information, products,Includes exchanges of information, products, services, and paymentsservices, and payments • Allows business marketers to link toAllows business marketers to link to suppliers, factories, distributors, and theirsuppliers, factories, distributors, and their customerscustomers • B2B Internet site provides technical support,B2B Internet site provides technical support, item and order status information, anditem and order status information, and customer servicecustomer service
    • 13. 6-13© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Intranets, Extranets,Intranets, Extranets, and Private Exchangesand Private Exchanges  Intranets:Intranets: • Link a firms’ departments, employees,Link a firms’ departments, employees, and databasesand databases  Extranets:Extranets: • Allow authorized suppliers, customers,Allow authorized suppliers, customers, and other outsiders to access the firm’sand other outsiders to access the firm’s intranetintranet  Private exchanges:Private exchanges: • Link an invited group of suppliers andLink an invited group of suppliers and partners over the Webpartners over the Web
    • 14. 6-14© 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Dark Side of B2B CommerceThe Dark Side of B2B Commerce  Hackers threaten security:Hackers threaten security: • Customer credit card number theftCustomer credit card number theft • May destroy firm records or steal tradeMay destroy firm records or steal trade secretssecrets • Authenticating transactions is criticalAuthenticating transactions is critical  Well-meaning employees can beWell-meaning employees can be security threatssecurity threats  Firewalls and encryption safeguardFirewalls and encryption safeguard e-commerce transactionse-commerce transactions ``
    • 15. 6-15© 2012 Pearson Education, Inc. publishing as Prentice-Hall. B2B and Social MediaB2B and Social Media  Games generate buzz and drive brandGames generate buzz and drive brand awarenessawareness  B2B marketers use social networkingB2B marketers use social networking sites to promote themselvessites to promote themselves  Linked in is the most prominent socialLinked in is the most prominent social networking site for B2B marketers andnetworking site for B2B marketers and offers several advantagesoffers several advantages
    • 16. 6-16© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Buying Situations andBusiness Buying Situations and the Buying Decision Processthe Buying Decision Process  Buy class frameworkBuy class framework • Identifies the degree of effort a firmIdentifies the degree of effort a firm needs to collect information and make aneeds to collect information and make a decisiondecision  Three buy classes:Three buy classes: • Straight rebuyStraight rebuy • Modified rebuyModified rebuy • New-task buyNew-task buy
    • 17. 6-17© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Professional Buyers and BuyingProfessional Buyers and Buying CentersCenters  Trained professional buyers typicallyTrained professional buyers typically carry out buying in business-to-carry out buying in business-to- business markets:business markets: • Purchasing agentsPurchasing agents • Procurement officersProcurement officers • Directors of materials managementDirectors of materials management
    • 18. 6-18© 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Buying CenterThe Buying Center  The group of people in an organizationThe group of people in an organization who participate in a buying decision:who participate in a buying decision: • InitiatorInitiator • UserUser • GatekeeperGatekeeper • InfluencerInfluencer • DeciderDecider • BuyerBuyer
    • 19. 6-19© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Buying Decision ProcessBusiness Buying Decision Process Step 1: Problem RecognitionStep 1: Problem Recognition  Factors prompting recognition vary byFactors prompting recognition vary by buying situationbuying situation  Actions resulting from problemActions resulting from problem recognition include:recognition include: • Initiation of a purchase requisition orInitiation of a purchase requisition or requestrequest • Formation of a buying center, if neededFormation of a buying center, if needed
    • 20. 6-20© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Buying Decision ProcessBusiness Buying Decision Process Step 2: Information SearchStep 2: Information Search  In this stage, buying center members:In this stage, buying center members: • Search for information about products andSearch for information about products and supplierssuppliers Marketers must provide information where andMarketers must provide information where and when business buyers need itwhen business buyers need it • Develop product specificationsDevelop product specifications Written descriptions of the quality, size, weight,Written descriptions of the quality, size, weight, color of the item to be purchasedcolor of the item to be purchased • Identify potential suppliers and obtainIdentify potential suppliers and obtain proposals (or bids)proposals (or bids)
    • 21. 6-21© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Buying Decision ProcessBusiness Buying Decision Process Step 3: Evaluate theStep 3: Evaluate the AlternativesAlternatives  The buying center assesses proposals:The buying center assesses proposals: • Price is a primary considerationPrice is a primary consideration • Other factors may be considered, suchOther factors may be considered, such as extra services or other perksas extra services or other perks • Customer reference programs, productCustomer reference programs, product demos, and presentations can help selldemos, and presentations can help sell the marketer’s products to firmsthe marketer’s products to firms
    • 22. 6-22© 2012 Pearson Education, Inc. publishing as Prentice-Hall.  Single sourcing:Single sourcing: • Business practice of buying a particularBusiness practice of buying a particular product from only one supplierproduct from only one supplier  Multiple sourcing:Multiple sourcing: • Buying from several different suppliersBuying from several different suppliers  Reciprocity:Reciprocity: • Trading partnership in which two firmsTrading partnership in which two firms agree to buy from one anotheragree to buy from one another Business Buying Decision ProcessBusiness Buying Decision Process Step 4: Select the Product andStep 4: Select the Product and SupplierSupplier
    • 23. 6-23© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Buying Decision ProcessBusiness Buying Decision Process Step 4: Select the Product andStep 4: Select the Product and SupplierSupplier  Outsourcing:Outsourcing: • Obtaining vendors to provide goods /Obtaining vendors to provide goods / services that might otherwise beservices that might otherwise be supplied in-housesupplied in-house  Crowdsourcing:Crowdsourcing: • Pulling together expertise from aroundPulling together expertise from around the globe to work on solving a problemthe globe to work on solving a problem  Reverse marketing:Reverse marketing: • Buyers try to find capable suppliers andBuyers try to find capable suppliers and “sell” their purchase to the suppliers“sell” their purchase to the suppliers
    • 24. 6-24© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Buying Decision ProcessBusiness Buying Decision Process Step 5: Evaluate PostpurchaseStep 5: Evaluate Postpurchase  Organizational buyers assess whetherOrganizational buyers assess whether the performance of the product and thethe performance of the product and the supplier live up to expectations:supplier live up to expectations: • Users are surveyed to determineUsers are surveyed to determine satisfactionsatisfaction • Producers may also research ultimateProducers may also research ultimate consumer satisfaction with the finalconsumer satisfaction with the final productproduct • Changes in demand are analyzedChanges in demand are analyzed • Supplier performance is documentedSupplier performance is documented
    • 25. 6-25© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Business Buying Decision ProcessBusiness Buying Decision Process Step 5: Evaluate PostpurchaseStep 5: Evaluate Postpurchase  Metrics used by organizational buyersMetrics used by organizational buyers include:include: • SatisfactionSatisfaction • QualityQuality • Customer engagementCustomer engagement • Purchase intentionsPurchase intentions • Promptness and effectiveness ofPromptness and effectiveness of problem resolutionproblem resolution
    • 26. 6-26© 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices:Real People, Real Choices: Decision Made at NCR CorporationDecision Made at NCR Corporation  Brad chose option 2Brad chose option 2 • Why do you think that Brad passed onWhy do you think that Brad passed on the trade show and reallocated itsthe trade show and reallocated its resources to two smaller events?resources to two smaller events?
    • 27. 6-27© 2012 Pearson Education, Inc. publishing as Prentice-Hall.  Meet Jim Multari, director of researchMeet Jim Multari, director of research at PBS Kids Sproutat PBS Kids Sprout  Sprout is an emerging cable networkSprout is an emerging cable network that attempts to foster parent andthat attempts to foster parent and preschooler interactionpreschooler interaction  The decision to be made:The decision to be made: Should the network target currentShould the network target current viewers, nonviewers, or both for itsviewers, nonviewers, or both for its first ever brand awareness campaign?first ever brand awareness campaign? Keeping It Real:Keeping It Real: Fast-Forward to NextFast-Forward to Next Class Decision for PBS KIDS SproutClass Decision for PBS KIDS Sprout

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