B2B MKTG PPT1

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Bus iness 2 business

market ing

Business markets have grownsignificantly in size and scope in recent

times in developed economies

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Bus iness markets in o rder to

succeed needs to be ful ly abreas t o f

➲ Market structure and demand➲ Nature of buying units

➲ Types of decision

➲ The decision process involved

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Relat ionsh ip market ing

➲ Developing long term relations

➲ Cost effective

➲ Mutually beneficial relationship withcustomers

(could bring out desired result for the

business in the days ahead)

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Organizat ional buying is the

decis ion making process by

which form al organizat ion

establ ish the need fo r

➲ Purchasing products and services

➲ Identify

➲ Evaluate and choose amongst alternativebrands and suppliers

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Business mkt consis t of all the orgn l that

acqu i re goods and serv ices used in the product ion o f others products and serv ices

that are sold,rented o r supp l ied to o thers

As compared to consumer market ,business

market generally have fewer and larger

buyers,a closer customer-supplier relationship

&more geographically concentrated buyers

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Demand in the bus iness market is derived from

demand in the consumer market and f luctuates

w i th the business cyc le

Business market needs to be aware of:

➲ The role of professional purchasers & their

influences.

➲ The need for multiple sales calls

➲ Importance of direct purchasing reciprocity and

leasing

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The buyers center is the decis ion -making

un i t of a buying organisation. It cons is ts

o f:

➲ Initiators

➲ Users➲ Influencers

➲ Deciders

➲ Approvers➲ Buyers

➲ gatekeepers

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To inf luence these part ies ,

marketers mus t be aware of;

➲ Environmental➲ Organizational

➲ Interpersonal

➲ Individual factors

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The buying process cons is ts of e ight

stages cal led Buy-stages

➲ Problem recognition

➲ General need description

➲ Product specification➲ Suppliers search

➲ Proposal solicitation

➲ Suppliers selection

➲ Order routine specification

➲ Performance review

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Problem recogn i tion

➲ The buy process begins when someone in

the company recognizes a problem or

need that can be met by acquiring a good

or a service

➲ The recognizion can be triggered by

internal or external stimuili

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General need description

• ( for complex items)the buyers will work withother engineers user- to define characteristics like

• (for standard item's) the buyers determine the

needed item's general characteristic• Reliability

• Durability or price

• Business marketers can help by describing how their

products meet or even exceed the buyers needs

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Produc t speci f ication

➲ Product value analysis(p.v.a) is an

approach to cost reduction

➲ In which component are studied to

determine if they can be redesigned or

standardized or made by cheaper methods

of production

➲ The pva team will examine the high-cost

components in a given products

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Supp l iers search

➲ The buyers tries to identify the most appropriate

suppliers through

➲ TRADE DIRECTORIES CONTACT WITH OTHER

COMPANIES.

➲ TRADE ADVERTISEMENT AND TRADE SHOWS

➲ Business marketers also put products ,prices and other

information on the internet

➲ The move to internet purchasing has far reaching implication

for suppliers and will change the shape of purchasing for

years to come

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e-procurement (web sites are organized around

two types of e-hub )

➲ Vertical hub centered around

➲ plastics,steel,chemical.papers➲ Functional hubs

➲ logistics,media buyers,advertising,energy

mngt

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Cond..

➲ Direct extranet links supplied by the

company to it’s major suppliers ➲ Buying alliances

➲ Several companies joined forces to form a

buying alliance called Transora

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Transora

➲

It is to use their combined leverage toobtain lower prices for raw material

➲ They also share data on less expensive

ways to ship products and track inventory➲ Companys buying sites (R.F.Ps ) request

for proposal rade process network through

increased negotiations terms and place

orders

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Proposal sol ic i tat ion

➲ The buyers invites qualified suppliers to submitproposals

➲ If the item is complex or expensive the buyers will

require a detail written proposal(qualified suppliers)

➲ After evaluating the proposals,the buyers will invite a

few suppliers to make formal presentation

➲ Business marketers must be skilled in researching,

written and presentation proposals

➲ Written proposals should be marketing documents that

describes value and benefits in customer terms

➲ Oral presenation should inspire confidence and position

the company’s capability and resources so that they

stand out from the competition

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Supp l iers select ion

➲

Before selecting a supplier a buying center will specify desired supplier attributes and

indicate their relative importance

➲

Business marketers need to do a better jobof understanding how business buyers

arrive at the valuation

➲ The choice and importance of different

attributes varies with he type of buying

situation,delivery,reliability, price and

suppliers reputation are important for

routine- order products

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For p rocedural problem product , such as

a copying mach ine, the three most

impo rtant at t r ibu te are

➲ Technical services

➲ Suppliers flexibility➲ Product reliability

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Price supp l iers repu tat ion

produc t reliabi l i ty

serv ice rel iab i l i ty

supp l ier repuat ion

For political problem product that stir rivalry in

the organizational (such as he choice of a

computer system) the most importantattributes are

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Order rou t ine-spec i f icat ion

➲ After selecting the buyers negotiates he

final order,listing the technical specification

he quality needed, the expected time of

delivery return policies, warranties and so

on➲ Many industrial buyers lease heavy

equipment like machinery and trucks

The lessee gains a number of advantages

Conserving capital, getting the latest product,

receiving beer services & some tax

advantage

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Cont..

➲ He lessor often ends up with a larger net income

and the chance to sell to customers who could

no afford outright purchase

➲ In case of maintenance repair and operating

items, buyers are moving towards blanketcontracts rather than periodic purchase order

➲ A blanket contract establishes a long term

relationship in which the suppliers promises to

resupply the buyers as needed a agreed upon

prices over a specific period of time because he

stock is held by the seller blanket contract are

sometimes called stockless purchase plans

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The buyers become dissat is f ied w i th the

in suppl iers ,pr ice, qual i ty o r service

➲ Companies that fear a shortage of key material

are willing to buy and hold large with suppliers to

ensure a steady flow of materials

➲ He business marketers are using the internet toset up extranet with important customers to

facilitate the lower cost of transaction

➲ He customers enter order directly on the

computer and these order are automatically

transmitted to the suppliers

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Some companies go fur ther and sh i ft the

order ing responsib i l ity to thei r suppl iers

in system cal led vendor m anage inventory

➲ These suppliers are privy o he customers

inventory level and take responsibility to

replenish,it automatically hrough

continuous replenishment programmes

➲ OTIFINE(summarises the desirable outcome of

b2b tranction)

➲ OT- delivery on time

➲ IF-in full

➲ NE- no errors

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Perfo rmance review (the buyers periodical ly reviews the performance of the

chosen suppl iers)

➲ Three methods are commonly used

➲ The buyers may contact the end users and

ask for the evaluation, the buyers may ratethe suppliers on several criteria using a

weighted score method or buyers might

aggregate the cost of poor performance tocome up with adjusted costs of purchase

including price

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•The performance review may lead the buyer to continue,modify or end a suppliers

relationship•Many companies have set up incentivesystems to reward purchasing managers for goods buying performance in much the sameway that sales personnel's receives bonusesfor good selling performance

•These system are leading purchasing

managers to increase pressure on sellers for he best term

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•Business marketers must form strong bonds

• And relationship with their customers andprovide them with their customers and providethem with their customers and provide hemadded value some customers ,however may

prefer more of a transactional relationship•The institutional market consists of schools,hospitals ,nursing homes ,prisons and other

institutional hat provide goods and services topeople in their case

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➲ Buyers for government organizations tend

o require a great deal of paperwork fromtheir vendors and to favour open bidding

and domestic companies,suppliers must

be prepared to adopt their offers to thespecial needs and procedures found in

institutional and government market

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B2b market ing in india

The business market is defined to includeorganization that buy good and services,for use in

the production of other product and serve that are

sold,rented and supplied to othersThe full B2B market includes government purchase

quasi-government operation, commercial enterpriseNgo's

hospitals,charities,resellers and other bodies and

institutes engaged in purchase of physical goods andservice

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Facto rs which makes a di f ference

in b2b mkt

Internal factorsExternal factors

ENVIRONMENTAL FACTORS

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In ternal facto rs

Interdepartmental and cross-functional co-ordination

wider management responsibilities

closer link between marketingstrategies and corporate strategy

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External fac to rs

More rational decision -making

Concentrated customer baseSeveral buying influence and location

Communication of benefits

Direct purchasingClose suppliers-customer relation

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Env ironmental facto rs

Technology

Demand issues

Value propositiondistinctive

measurable

sustainable

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Customer relat ionship

Know your customer well

B2B MKTG PPT1

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