chapter 5: business to business marketing Flashcards
define business-to-business marketing
process of buying and selling goods and services for consumption by the buying organization, or for resale by wholesalers and retailers
what do B2B markets focus on
they focus their efforts on serving specific types of customer markets to create value for those customers
B2B: what do manufacturers and producers do
buy raw materials, components, or parts to manufacture their own goods
B2B: what do resellers do
are marketing intermediaries that resell manufactured products without significantly altering their form
B2B: what do institutions do
non-profit organizations purchase goods and services for the people they serve
B2B: government
make significant purchases
what are the key challenges of reaching B2B clients?
- identify decision makers in organizations who authorize or influence purchases
- understand the buying process of each potential client
- identify factors that influence the buying process of potential clients
differences between B2B and B2C markets: market characteristics
demand for business is derived, there are fewer customers and larger orders
differences between B2B and B2C markets: product characteristics
products ordered in B2B markets are primarily raw materials and semi-finished goods that are processed and assembled into finished goods
differences between B2B and B2C markets: buying process characteristics
the buying centre, nature of relationship between the firm and its suppliers, and long-term relationship
differences between B2B and B2C markets: marketing mix characteristics
role of the salesperson (salespeople are an important component of the communications mix for B2C transactions, but are an integral component for B2B transactions)
what is the B2B buying process
- need recognition
- product specification
- RFP process
- proposal analysis and supplier selection
- order specification
- vendor performance assessment using metrics
B2B buying process: 1. need recognition
-can be generated internally or externally
-sources for recognizing new needs are suppliers, salespeople, competitors
B2B buying process: 2. product specification
-suppliers use to develop proposals
-can be done collaboratively with suppliers
B2B buying process: 3. request for proposal (RFP) process
buying organizations invite alternative suppliers to bid on supplying their required components or specifications
B2B buying process: 4. proposal analysis and supplier selection
B2B buying process: 5. order specification (purchase)
-firm places an order
-exact details of the purchase are specified
-all terms are detailed including payment
B2B buying process: 6. vendor performance assessment using metrics
- buying team develops a list of issues (customer service, issue resolution, delivery, quality)
- assign importance score to each
- vendor’s performance using 5 point scale used
- importance x performance
what is the buying centre?
the 6 stage B2B buying process may be influenced by 3 factors within the purchasing organizaiton
- the buying centre
- corporate culture
- buying situations
the 6 buying roles within the buying centre
- initiator
- influencer
- decider
- buyer: handler of purchase paperwork
- user
- gatekeeper: person who controls info/access to decision makers and influences
what is the organizational culture
reflects the set of values, traditions, and customs that guides its managers and employees behaviour
autocratic buying centre
multiple participants, one person makes decision alone
democratic buying centre
majority rules
consultative buying centre
uses 1 person to make a decision, but they solicit input from others beforehand
consensus buying centre
all members of team must reach a collective agreement
buying situations: new buy, modified rebuy, and straight rebuy
new buy: purchasing for the first time
modified rebuy: buyer has purchased similar product before but decided to change some specifications
straight rebuy: buyer buys additional units of previously purchased units
