Buyer behaviour part 2

Question 1

What is B2B marketing?

Answer 1

• Any marketing strategies used by only one business to target and sell to another business.
• Organisational buyer behaviour/ B2B consumer behaviour:
• It’s the study of the processes involved when businesses select, purchase, use or dispose of products, services, ideas, or experiences to satisfy their needs and desires.

Question 2

Who are B2B customers?

Answer 2

• Commercial enterprises
• Government bodies
• Institutions

Question 3

What are the differences between B2B and B2C marketing?

Answer 3

1. The purpose of the transaction.
2. The risk attached to the purpose.
3. The degree of customisation and negotiation involved.
4. The formality of the decision making process.
5. The speed of the decision making process.
6. The relative ease of switching suppliers.

Question 4

What are some characteristics of B2B customers?

Answer 4

• Purchase goods and services that meets specific business needs.
• Need emphasis on economic benefits.
• Involves large groups in purchasing decisions.
• Want a customised package.
• Justify an emphasis on personal selling.
• Purchase direct from suppliers.

Question 5

What are some characteristics of B2C customers?

Answer 5

• Purchase goods and services to meet individual or family needs.
• Need emphasis on psychological benefits.
• Purchase as individuals or as a family unit.
• Are content with a standardised product package targeted at a specific market segment.
• Justify an emphasis on mass media communication.
• Purchase from intermediaries.

Question 6

What are Hill and Hiller 1977s buyer decision making process components?

Answer 6

• Precipitation
• Product specification
• Supplier selection
• Committment

Question 7

What is precipitation?

Answer 7

Internal and external triggers the impact of business threats and opportunities - the realisation that there is a need.

Question 8

What is product specification?

Answer 8

The importance of precisely specifying what is needed, the involvement of various business function in agreeing the specification.

Consumer buyers - don’t always know what they want.

Question 9

What is supplier selection?

Answer 9

The problems of supplier search and selection, established vs new suppliers, existing relationships, quotations, nature of the purchase - frequent or infrequent.

Question 10

What is commitment?

Answer 10

The importance of monitoring and evaluation, and of relationship building.

Question 11

What are the six B2B purchase decision making steps that customers must complete their satisfaction in order to successfully finalise a purchase?

Answer 11

1. Problem identification. “We need to do something”
2. Solution exploration. “What’s out there to solve our problem?”
3. Requirement building. “What exactly do we need the purchase to do?”
4. Supplier selection. “Does this do what we want it to do?”
5. Validation. “We think we know the right answer, but we need to be sure”.
6. Consensus creation. “We need to get everyone on board”.

Question 12

Who are the 6 key players in the B2B buying process?

Answer 12

1. Initiators: These are the people who make the request for something that has to be purchased. In other words, they initiate the purchase cycle.
2. Users: These are the people who will be using the product or service. Sometimes they’re the initiator, but at larger companies, the initiator and the user are usually two different people.
3. Influencers: these are people who influence the buying decision. They’re often different from the initiation and the users
4. Deciders: the people who decide on product requirements or on the suppliers who might fulfil the order.
5. Buyers: People who have the formal authority to select the supplier.

Question 13

What are the similarities between B2B and B2C buying process?

Answer 13

• All B2B and B2C processes are built upon trust.
• Both B2B and B2C buying processes are complex.

Question 14

Similarity: All B2B and B2C processes are built upon trust.

Answer 14

• B2B customers often place trust at the forefront of their purchasing decision. For instance, when they’re in the market for new software, they’ll want a relationship with someone who can become a trusted advisor due to the large investment needed when updating their infrastructure.
• Despite the cost usually being higher with B2B, B2C consumers still expect a high level of trust with the companies they are dealing with. With this being a major influencing factor, this can lead to many benefits if trust is met, from repeat purchasing to positive word of mouth.

Question 15

Similarity: Both B2B and B2C buying processes are complex.

Answer 15

• In an increasingly digital world, the ways that a business or individual can buy a product or service is endless. Companies are adopting more nurturing strategies, including email marketing campaigns, content creation and targeted advertising, to boost customer engagement.
• Though B2B customers typically take longer to decide due to complex factors, both groups require some convincing before they are ready to invest in your product or services.

Question 16

What are the differences between B2B and B2C buying process?

Answer 16

• B2B customers proactively identify needs to meet their business strategy.
• B2B customers buy products/services that meet certain specifications while B2C are more flexible.
• The B2B buying process is longer than B2C.
• B2B customers care about post sales service.

Question 17

Difference: B2B customers proactively identify needs to meet their business strategy.

Answer 17

• B2B customers are more likely to proactively identify a need to look for a solution to fulfil it as part of their business strategy. Research has found that over half of client decisions are made before they have even picked up the phone , showing proactivity to fund the solutions based on their current challenges.
• B2C customers show their need in an equivalent way, but they’re also often swayed by marketing and advertising materials that draw attention to new products. For instance, this could solve the need that may not have been clear without a businesses promotional efforts. So in addition to saying something like I’m not sleeping well, I should buy a new mattress. They can also be influenced into buying said mattress even if they are sleeping well.

Question 18

Difference: B2B customers buy products/services that meet certain specifications while B2C are more flexible.

Answer 18

• When most businesses are buying new products or services, they’ll have certain specifications in mind. B2B customers are unlikely to buy something on a whim. This results in their purchase decisions being more strategic and less emotional.
• In contrast, B2C customers are more emotionally driven when it comes to their purchase. They often know what product/service they want but they rarely have specifications to stick to. They Are a lot more flexible, susceptible to impulse purchases and will forgo their initial product/service if they find another they like better.

Question 19

Difference: The B2B buying process is longer than B2C

Answer 19

B2B customers make more strategic buying decisions and their buying process is often longer than B2C. they’ll evaluate complex factors such as:

• The cost - Does it fit within my budget?
• Supplier reputation - are they reliable?
• The features and functionalities of the product/service - is this the right investment for my business?

B2C customers are usually the only decision maker involved meaning their journey is shorter. They consider simplistic factors in comparison, such as:

• Value for money - am I getting the best deal?
• Can I find cheaper elsewhere?
  product/service reviews - how does the product/service compare to alternatives?
• Brand eruption - how credible and reliable is the brand?

Question 20

Difference: B2B customers care about post sales service

Answer 20

• All customers expect outstanding service that includes excellence even after the sale. B2B customers want consistently excellent customer service before, during and after their sale.
• E.g check up on customers and if they need anything else
• B2C customers usually turn to after sales support when they are experiencing a problem or want to complain. Factors such as being able to respond and resolve the issue quickly can make or break their loyalty. They don’t often appreciate being sent other resources, like guides or emails even if it’s relevant as much as B2B customers do.

Question 21

What are the factors affecting B2B consumer behaviour?

Answer 21

1. Rational
   - Prices
   - Specifications
   - Quality consistency
   - Supply reliability and continuity
   - Customer service provision
2. Emotional
   - Prestige
   - Career security
   - Social needs
   - Other personal needs

Question 22

Factors affecting B2B purchase decision: Price

Answer 22

• The more a product or service costs, the more stakeholders will typically be involved in the buying journey. These stakeholders won’t necessarily be senior – that is driven by strategic importance (see below).
• Organisations also have higher expectations around levels of service and customization when buying high-priced products or services. For low-price products, there are fewer opportunities to differentiate. Vendors tend to differentiate through relationships, or by making the purchase as easy as possible for the buyer.

Question 23

Factors affecting B2B purchase decision: Specification

Answer 23

• The greater the differentiation or complexity of a product, the more time an organisation needs to dedicate to researching or comparing the different options on the market.
• More complexity also means that more specialists will be involved in the decision-making process. These specialists can be external to the buying organisation, as the individuals within the organisation cannot be expected to become experts in the more complex products.

Question 24

Factors affecting B2B purchase decision: To be aware

Answer 24

• The stakes are higher – if a buyer makes the wrong decision, they can lose their job.
  Status quo bias – change is perceived to be risky, so there needs to be a compelling reason to act.
• Loss aversion – buyers are more likely to take action to prevent losses than to drive gains.
• Decision paralysis – the more stakeholders that are involved in a decision, the less likely that consensus will be achieved, and the more likely that they will decide to ‘do nothing.’

Question 25

How do you navigate B2B consumer behaviour?

Answer 25

• Managing the longer buying cycle
• Buyer fears and desires
• Multiple personas
• Standing out from the crowd

Question 26

B2B social media, also known as corporate social media, are viewed as “web-based platforms that allow workers to:

Answer 26

• Communicate messages with specific co-workers or broadcast messages to everyone in the organisation;
• Explicitly indicate or implicitly reveal particular co-workers as communication partners.
• Post, edit, and sort text and files linked to themselves or others;
• View the messages, connections, text, and files communicated, posted, edited, and sorted by anyone else in the organisation at a time of their choosing.

Question 27

Employee engagement: On B2B social media

Answer 27

• Unlike the personal use of social media by employees, strategic employee engagement on social media requires employees’ identifications to be associated with the organisation, thereby acting as brand ambassadors and “go-to-advisors” for their organisations (Liu & Bakici, 2019).
• Organisations should develop policies that encourage employee participation on social media, thus, facilitating the sharing of external and internal knowledge (Chen et al., 2020).
• In essence, employee engagement on social media should reflect and amplify the effort of internal marketing in external communication, thereby improving the image of the organisation and establishing a positive impression among customers and other stakeholders (e.g., coworkers, suppliers) in the online environment.