Basics of B2B and 2.1 start Flashcards
What are the basic characteristics of B2B Mkt?
- Multi-people and multi-organizational participation
- Derived demand
- High degree of formalization
- Long-term nature of business relationship
- High degree of individualization
- High degree of personal interaction
What is Value-addes sales multiplication on industrial goods markets?
Assumption: For production of consumer product four level of addev value are involved, with an additional value of 30% of the previous value added to the upper value level.
Raw material supplier –> Pre-supplier –>Main supplier –>Manufactuer –>End consumer
What is Multi people and multi organizational participation?
Several people and additional organizations are involved in the procurement process of the custoomer
ex: Decsion invest in a new power plant, customer forms buying center and includes different organisations (banks, engineering firm, consulting, state)
What is Derived demand?
Organizational demand is derivative and is determined by customers of the customer (multiple stages)
Why is there a “High degree of formalization” in B2B Mkt?
Basics
Due to a high level of complexity with regard to an organizational procurement process, the buying decision process is often highly formalized
–>ex: Requirement specifications written by the customer: measurement, weight, material
Why is there “Long-term nature of business relationship” in B2B Marketing?
Because of the longevity of the products and the importance of continous service, long-term business relationships develop in B2B markets
Ex: Customer buys computer system + user training and maintenance services
Why is there a “high degree of individualization”?
Many of the company´s buyers have specific needs and are not looking for standardized but customized solutions and products
Ex: publishing company needs printing machine, customized to its specific needs
Why is there a “high degree of personal interaction?”
In the interactive process between company and customer, personal contacts evolve that play a key role in the sucess of the business relationship
Ex: between company and customer, contact persons (including needs & preferences) are known on both sides so that it is no anonymous business
Customers in B2B marketing?
- Private sector (Users, OEMs, Wholesalers/retailers)
- Governmental organizations
- Public institutions
Private sector companies: three types?
1/3 Customers in B2B
- Users: purchase products to support their own production process, for the purpose of creating new products
- Original equipment manufactures (OEMs): integrate the product as a component of a newly produced product
- Wholesale/Retailers: sell the purchased products in virutallly unmodified form to other organizational customers (users and OEMs) or customers
Customer in B2B: What are governmental organizations? also name examples?
Governmental organizations: demand goods and services in order to provide the public with services (military, police, fire department)
Customer in B2B: What are public institutions?
Public institutions: similar to governmental organizations, as the purchasing process is influended by political decisions and laws (e.g. church, hospitals, schools)
