Chapter 6 Business-to-Business (B2B)Marketing

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Chapter 6 Business-to-Business

(B2B)Marketing


Objectives1. Explain each of the components of the business market.2. Describe the major approaches to segmenting

business-to-business markets.3. Identify the major characteristics of the business market

and its demand.4. Describe the major influences on business buying

behavior.5. Outline the steps in the organizational buying process.6. Classify organizational buying situations.7. Explain the buying center concept.8. Discuss the challenges of marketing to government,

institutional, and international buyers.


B2B Marketing

Deals with organizational purchases of goods and services to support production of other products, to facilitate daily company operations, or for resale.


B2B Marketing•StorageTek Company Vision Statement:“Be the Storage Experts who deliver easy to use, industry-leading, innovative storage solutions to manage and protect business critical information.”Source: storagetek.com/home/about/vision.htm


Comparing Business-to-Business Marketing and Consumer Marketing

Individual or household unit makes decision

Diverse group of organization members makes decision

Decision-Making Process

Comparatively infrequent contact, relationship of relatively short duration

Relatively enduring and complexCustomer Relations

Product passes through a number of intermediate links en route to consumer

Relatively short, direct channels to market

Distribution

Emphasis on advertisingEmphasis on personal sellingPromotion

List pricesCompetitive bidding for unique items, list prices for standard items

Price

Standardized form, service important but less than for business products

Relatively technical in nature, exact form often variable, accompanying services very important

Product

CONSUMER MARKETINGBUSINESS-TO-BUSINESS MARKETING


Components of the Business Market

1. Commercial market2. Trade industries3. Government organization4. Institutions


• A Component of the Business Market, is a government agency we all know, the IRS.

• IRS buys products to provide federal tax service.


Commercial Market

Largest segment of the business market. Includes all individuals and firms that acquire

products to support, directly or indirectly, the production of other goods and services.


Approaches to SegmentingBusiness-to-Business Markets

1. Demographics2. Customer type3. End-use application4. Purchasing situation


A Site Designed to Help Evaluate China as a B2B Market


Characteristics That Distinguish theBusiness Market from the Consumer Market

1. Geographic market concentration2. The sizes and number of buyers3. Purchase decision procedures4. Buyer-seller relationships


Today’s International Marketplace

Practice global sourcing, which involved contracting to purchase goods and services from suppliers worldwide which can result in substantial cost savings.

Global sourcing requires companies to adopt a new mind-set; some must even reorganize their operations.


Outsourcing

Improves efficiency.• Allows firms to concentrate their resources on their

core business. It also allows access to specialized talent or expertise.

Outsourcing downside:• Can reduce a company’s ability to respond quickly.• A major danger of outsourcing is the risk of losing

touch with customers.• Controversial topic with unions.


Influences on Purchase Decision

Environmental Factors

Organizational Factors

Interpersonal Influences


• Economic• Political• Regulatory• Competitive• Technological

Consideration Influence








• Customers’ organizational structures

• Policies• Purchasing

systems








• Customers’ organizational structures

• Policies• Purchasing

systems

Should know who influences buying decisions:• Group• Individual• Committees






Buying Center Concept

• Provides a vital model for understanding organizational buying behavior.

• Encompasses everyone who is involved in any aspect of its buying action.

• Not part of a firm’s formal organization structure.

Chapter 6 Business-to-Business (B2B)Marketing

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