Business to Business Marketing -Ppt

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Business to Business Marketing

Yogesh Baviskar

Subject Outline:- B2B Marketing

1. 2 3 4 5 6 7 8 9 10 11

Introduction to B2B Market Organizational Buying Behavior Relationship Management Segmenting the Business Market Managing Products & New Innovations Management in B2B Market Managing Services in B2B Market Price Management in B2B Market Channel Management in B2B Market E-Commerce in B2B Market Business Marketing Communication Case Studies & Further Discussion

Top B2B Brands:-

Business to Business Marketing :-

Definition:Business Marketing is the practice of individuals, or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations

Industrial Vs Consumer MarketingAreas of Difference Market Characteristics B2B MarketGeographically Concentrated Relatively Fewer Buyer

Consumer MarketGeographically Disbursed Mass Market

Product Characteristic

Technical Complex Customized


Service Characteristic

Service , timely Availability extremely Somewhat Important Important

Buying Behavior

Involvement of Various functional area Involvement of family members from both the ends Purchase Decisions are performance based and rational Technical Expertise Stable Interpersonal relationship Purchase decisions are mostly based on Physiological /social/psychological needs Relatively less technical expertise is required Non- Personal relationship

Industrial Vs Consumer MarketingAreas of Difference Channel Characteristic Industrial MarketMore Direct Fewer Intermediaries

Consumer MarketIndirect Multiple layer of Intermediaries

Promotional Characteristic

Emphasis on Personal Selling

Emphasis on Mass Media (Advertising)

Price Characteristic

Competitive Bidding and Negotiated Prices List Price for Standard Products

List Price or MRP

B2B Distribution Channel CharacteristicsManufacturer

Company Sales Force

Representative Agency

Distribution Dealer




Characteristics of B2B Demand

Derived Demand: The demand for a good or service that results from the demand for another good or service. Ex.:- Pig Iron ---Steel ---Steel Sheets---Automotive part companies--Automobiles--End customer

Demand Elasticity:-

Joint Demand:- Demand for product or services is interdependent on each other Ex:- Coffee Powder, Sugar & Milk in Making Coffee Ex:- Software- Operating System, Car & Fuel

2:- Understanding B2B Market & Environment with Buyers Perspective

B2B Customers B2B ProductsMarketing of industrial products to B2B Customers

Purchasing of Industrial ProductsGoals of Purchasing Purchasing Orientations Buying Orientation Procurement Orientation Supply Chain Management Orientation

Purchasing Practices of Industrial CustomersCommercial Business Government Institutes Co-operative

Environmental Analysis:Types of Environment Influencing B2B Market

Understanding B2B Market & Environment with Buyers Perspective

2.Understanding B2B Market & Environment with Buyers PerspectiveMaterial & Parts

Raw MaterialsManufactured Materials Component Parts Subassemblies

Iron ore, Crude oil, fruits, fish Acids, Fuel oil, Steel , Chemicals Gauges, TV tubes, Tyres, Exhaust Pipe in Motor Cycle

Light equipment/ Accessories Installation or Heavy Equipments

Hand tools, Dies, Jigs

Capital items

Machine Tools, Furnaces

Plants & Building

Plants, Office Building Lubricants, Fasteners, paints , Electrical Items Legal, Auditing, Advertising, Courier, Market Research

Supplies Supplies & Services Services

2.Understanding B2B Market & Environment with Buyers Perspective

Goals Of PurchasingUninterrupted Flow Material Manage Inventory Improve Quality Developing and Managing Supplier relationships Achieve Lowest total cost Reduce Administrative cost Advance Firms Competitive Position

2.Understanding B2B Market & Environment with Buyers Perspective Purchase Orientation Buying Orientation Procurement Orientation Supply chain Management Orientation

Applications of Purchase Orientation to Industrial CustomersIndustrial CustomersSupply Chain Management Procurement

Government as a CustomerBuying Orientation

InstitutesBuying Orientation

2.Understanding B2B Market & Environment with Buyers PerspectivePurchasing Practices of B2B CustomersIndustrial customers Government Institutes Cooperative

Environmental Analysis:Ecological & Physical 1.Pollution & Conservation of Natural resources 2. Utilities, Manpower & Transportation

2.Understanding B2B Market & Environment with Buyers Perspective

Environment Analysis:Internal Environment:Company Location, R&D Facilities, Production Facilities Human Resource and Image of the company External Environment:Micro Environment :Customers & Competitors Suppliers

Macro Environment:Economic Technological Government/Political & Legal Cultural & Social Investors & NGO

3.The Nature of Industrial Buying and Buying Behavior Organizational Buying Process Organizational Buying Situations Forces Shaping Organizational Buying Behavior


Environmental Forces

-- Organizational Forces -- Group Forces :-

- Buying Center -Elements of Buying Center-- Individual Forces

3.The Nature of Industrial Buying and Buying BehaviorProblem Recognition General Description of Need Product Specification Supplier Search Acquisition & Analysis of Proposal Supplier Selection Selection of Order Routine Performance Review

3.The Nature of Industrial Buying and Buying BehaviorOrganizational Buying SituationsThe buyer routinely re-orders the same product or service with out any modification

Straight Rebuy

Modify Rebuy

The buyer wants to modify product specifications, price, service or supplier

New Task

The buyer purchase product or service for the first time

3.The Nature of Industrial Buying and Buying Behavior Forces Shaping Organizational Buying BehaviorEnvironmental Forces

Organizational Forces

Group Forces

Individual Forces

Group Force Buying CenterBuying Center can be defined as the body of all the individuals and groups participating in the buying decision process and who have interdependent objectives and share common risk

3.The Nature of Industrial Buying and Buying Behavior Roles of Buying Center Initiator :Recognition of Problem or Need Buyer :Obtains the quotation Supplier evaluation & Selection Processing purchase order Expediting deliveries Implement the purchasing policies of the organization User of Product/ Services ( Could be Initiator) Individuals who could influence the purchasing decision ( Technical / Design Engineers / External consultants ) Individuals who control the flow of information to the members of buying center Individuals or group of people who make the actual purchase decisions about the product or services

User:Influencer :Gatekeepers:Deciders:-

3.The Nature of Industrial Buying and Buying Behavior

B2B Buying Behavior Model

4. Buyer Seller Relationship Buyer Seller Relationship :- Establish , Develop & Maintain the meaningful relationship with the customer. Types of Buyer Seller Relationship Transactional Exchange Collaborative Exchange Switching Cost

Managing Buyer Seller Relationship Typical Characteristics of Buyer Seller Relationship based on Market Condition and Purchase BehaviorTransactional Exchange Availability of Alternative Supply Market Dynamism Importance of Purchase Complexity of Purchase Many Alternative Stable Low Low Collaborative Exchange Few Volatile High High High Extensive

Information Exchange Low Operational Linkage Limited

CRM Strategy

Determine which type of relationship matches the purchasing situation and supply-market conditions for a particular customer. Develop a strategy that is appropriate for each strategy type.

Understanding Customer ProfitabilityCharacteristics of High Vs Low Cost-to-Serve Customers High Cost to Serve Order Custom Products Order Small Quantities Unpredictable Order arrivals Customized delivery Frequent Changes in delivery requirement Manual Processing Large amount of presales support Require company to hold inventory Longer credit periods Low Cost to Serve Order Standard Products Order Large Quantities Predictable order arrivals Standard Delivery No changes in delivery requirement Electronic Processing Little to no presales support Replenish as produced Payment on time

Creating a CRM StrategyAcquire the Right Customer

Crafting the right value proposition for the customer Design the Best Process to deliver the product /services

Motivating the Employees

Retain the customer

Segmenting the Business MarketWhy Segmentation:Criteria for the segmentation:Measurable Assessable Substantial Computability Responsiveness

Benefits of Segmentation:Concentrate on unique needs of target segment, Focus on product development, Develop profitable pricing strategy Select the appropriate channel Develop communication and advertising strategy

Variable of Business Market SegmentationMacro level segmentation Micro level Segmentation


Macro SegmentationVariable of Segmentation Characteristics of Buying Behavior Size Geog