Business-to-Business Marketing – Flashcards
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Business-to-Business Marketing:
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Refers to the process of buying and selling goods or sevices to be used in the production of other goods and services, for consumption of the buying organization and/or resale by wholesalers and retailers.
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Derived Demand
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B2B sales is often derived from B2C sales in the same supply chain.
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B2B Markets:
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-Manufacturers -Resellers -Institutions -Government
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Manufacturers or Producers
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They buy raw materials, components, and parts that allow them to manufacture their own goods.
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Resellers
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They are marketing intermidiaries that resell manufactured products without altering their form. Ex: Wholesalers, distributors, and retailers are all resellers.
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Institutions
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Hospitals, Schools and religious organizations are all institutions.
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Government
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One of the largest purchasers of goods and services.
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B2B Buying Process
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Need Recognition- Product Specification- RFP Process- Porposal Analysis and Supplier Selection- Order Specification- Vendor Perfomance assessment using metrics.
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1) Need Recognition
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Recognizes either through internal or external sources that it has an unfilled need.
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2) Product Specification
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The organization considers solutions and comes up with potential specifications that vendors might use to develop their proposals.
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3) RFP Process
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Process through which organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications.
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4) Proposal Analysis, Vendor Negotiation and Selection
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The buying organization, in conjunction with its critical makers, evaluates all the proposals it receives in reponse to its RFP. Consideration other than price play role in the selction.
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5) Order Specification
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Firms places its orders with its preferred suppliers.
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6) Vendor Performance Assessment Using Metrics
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Firms analyze their vendor's performance so they can make decisions about their future purchases. In the B2B setting, this anlysis is more formal and objective.
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The Buying Center
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Gatekeeper-Initiator-Influencer-Decider-Buyer-User
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The Gatekeeper
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The person who controls information or access, or both, to decision makers and influencers.
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Initiator
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The person who first suggests buying the particular product or sevice.
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Influencer
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The person whose views influence other members of the buying center in making the final decision.
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Decider
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The person who ultimately determines any part of or the entire buying decision.
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Buyer
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The person who handles the paperwork of the actual purchase.
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User
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The person who consumes or uses the product or sevice.
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Organizational Buying Culture
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Autocratic-Democratic-Consultative-Consensus
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Autocratic
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Though there may be multiple participants, one person makes the decision alone.
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Democratic
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Majority rules.
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Consultative
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Use one person to make a decision, but solicit input from others before doing so.
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Consensus
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All members of the team must reach a collective agreement that they can support a particular purchase.
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The Buying Situation
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Most B2B buying situations can be categorized into 3 types: -new buys -modified rebuys -straight rebuys
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New Buys
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A customer purchases a good or a service for the first time. Is the most complex and difficult, becuase it requires the buying organizations to make changes in its current practices and purchases.
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Modified Rebuys
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Buyer has purchased a similar product in the past but has decided to change some specifications, such as desired price, quality level, customer service level, options, etc.
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Straight Rebuys
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When the buyer simply buys additional units of products that had previously been purchased.
