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Imc course session 4 business buyer behaviour

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This is part 4 of my 15 lecture series class for Integrated Marketing Course at IOBM Karachi

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Imc course session 4 business buyer behaviour

  1. 1. Session 3<br />Ali Raza Merchant<br />IMC CourseBusiness-to-Business Buyer Behaviour<br />IMC 2011 by ARM<br />
  2. 2. Defining various types or categories of business-to- business buyers<br />Major roles associated with making purchases, called the business buying center<br />Steps of business purchasing decision are outlined<br />Important new factors and issues in business-to-business sales are discussed<br />Topic Content Summary<br />IMC 2011 by ARM<br />
  3. 3. Business-to-Business Customer Types<br />IMC 2011 by ARM<br />
  4. 4. IMC 2011 by ARM<br />Types of Products<br /><ul><li>Many types of goods and services are sold to business-to-business market place
  5. 5. These can include services like employee medical insurance, cleaning & maintenance services etc
  6. 6. Each requires a distinct marketing approach</li></ul>Accessories<br />Major Equipment<br />Process Materials<br />Component Parts<br />
  7. 7. IMC 2011 by ARM<br />Business Customers & What They Buy<br />
  8. 8. IMC 2011 by ARM<br />Business Buying Centers<br />Actual Users of Product or Service such as Secretarial Staff (Stationery), Factory Workers (Tin Cans/ RM) or HR (Hiring Services)<br />1. Users<br />5. Gatekeeper<br />2. Buyers<br />Controls flow of info to members of buying center<br />Lets them know if certain alternatives have been rejected<br />Responsible for making purchases<br />In large organizations buyers can be purchasing agents or members of purchase department in a company<br />3. Influencers<br />Who shape purchasing decisions by providing information specs or criteria e.g. Engineers <br />Individuals who authorize buying decision<br />Can by CFO, VP, MD <br />4. Deciders<br />
  9. 9. Was set up by AK Sumar and MNA in the 1960’s, during Ayub Khan’s Govt.<br />Was unique in many ways as it was unconventional in its advertising – never used models<br />Had a high quality fabric manufacturers’ perception among consumers due to which it commanded higher price<br />In the early 1990’s MFTM was a large textile company in Pakistan with a 50 50 emphasis on dressing fabrics for local as well as home textile products for export<br />MFTM was a vertically integrated unit with spinning, weaving, bleaching & dying, printing and stitching units<br />Mohd. Farooq Textile Mills (MFTM) - Backgrounder<br />IMC 2011 by ARM<br />
  10. 10. IMC 2011 by ARM<br />Mohd. Farooq Textile Mills (MFTM)<br />
  11. 11. MFTM was manufacturing Lawn Fabric for women, 100% Cotton Fabric, Wash & Wear Fabric for the local market<br />Production for local market was marketed through two distributors under the supervision of Head of local sales<br />The brand was well respected and commanded a higher price, which affording consumers were willing to pay<br />Local market was not the company’s business focus<br />IMC 2011 by ARM<br />Interesting Facts About MFTM<br />
  12. 12. MFTM exports were growing at a phenomenal rate<br />The export market was value added and allowed the company to make greater margins, particularly in view of the govt. rebates and foreign exchange earnings <br />The company sold home textile products to manufacturers and retail store brands in Germany, France, Holland & Switzerland<br />The flagship product were 100% Satin for Home Textiles which included single and double bed sets i.e. Quilt Cover and Pillow<br />In addition to Satin the company also manufactured Flannel and 100 Cretonne, a comparatively low priced cotton fabric<br />The average gross margin of Satin was 45%<br />The company did not have its own brand for exports – it was a toll manufacturer for other brands like Luxorette, Irisette, Carfour, La Redoute, Kaufhoff, Neckermann etc<br />IMC 2011 by ARM<br />Interesting Facts About MFTM<br />
  13. 13. IMC 2011 by ARM<br />Home textile Portfolio<br />
  14. 14. IMC 2011 by ARM<br />Home textile Portfolio<br />
  15. 15. Pakistan was one of the markets that was limited in its export of textiles through quota <br />Quota meant that a manufacturer could only export a particular category of textile goods to a country if they possessed quota in value terms<br />Therefore, if MFTM had an order of $100,000 for home textiles from Europe, it needed to have equivalent quota to ship the goods. If not they could buy quota from a manufacturer with surplus quota<br />Quota was barrier tariff created by USA, Europe and Australia to restrict Pakistani textiles which were low cost and were eating away their own textile industry<br />Since MFTM sold high priced Satin products its export value resulted in higher quota every year<br />IMC 2011 by ARM<br />Exporter Quota – A Barrier to Entry<br />
  16. 16. Management Structure of MFTM<br />IMC 2011 by ARM<br />
  17. 17. IMC 2011 by ARM<br />MFTM Purchase Decision<br />Requirements included: <br /><ul><li>Labels for Wash Instructions
  18. 18. Inlay Cards
  19. 19. PE or PP Bags for Packing</li></ul>Home Textiles<br />(Labels & Packaging)<br />Stitching<br />Spinning<br />Thread and accessories for stitching<br />Stitching machines spares & maintenance<br />Manager Purchase<br />Raw Cotton was the main input material<br />Also required was polyester for blended yarn<br />Grey Cloth<br />Chemicals & dyes for fabric processing<br />Screens for printing <br />Parts & maintenance<br />Chemicals for sizing yarn<br />Parts and maintenance for weaving looms<br />Bleaching, Dying & Printing<br />
  20. 20. IMC 2011 by ARM<br />B2B Buying Process<br />Identification of Need<br />Establishment of Specs<br />Identification of Alternatives<br />Evaluation of Vendors<br />Selection of Vendors<br />Negotiation of purchase terms<br />
  21. 21. IMC 2011 by ARM<br />Dual Channel Marketing<br />Products like Digital Cameras, Calculators, Computers, Fax, Cell phones <br />Kodak imaging products<br />First B2B then Consumers<br />DUAL CHANNEL MARKETING <br />When a firm sells virtually the same products or services to both consumers and businesses<br />Spin off Sales<br />Consumers who use officially given product by Company buy same for personal use<br />Image Concerns<br />Marketers have to be careful that image projected in one market does not damage the other<br />Difference v/s Similarities<br /><ul><li>Use different messages
  22. 22. Create different brands
  23. 23. Use multiple channels or different channels</li>

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