Business to Business Marketing Characteristics Differences Key concepts

Business Markets Organisations that purchase goods or services to use in the creation of their own goods and services, which are then offered to their customers –Vitale and Giglierano 2002

Part of a marketing channel, value chain, value delivery network

Characteristics Markets –fewer buyers –higher value transactions –key accounts

Products –complex –customised –packaged to include supply, service, financing –total offering -augmented products

Demand Derived Demand –demand for materials, ingredients, services varies as a result of demand for the end product The Bullwhip Effect –small changes in consumer demand cause large changes further up the supply chain inelasticity in the short term (switching costs)

Buyer Behaviour Professional, trained buyers Decision-making units or buyer centres rather than an individual decision Task motives predominate? –but personal motives eg status, face, success may still influence decisions?

Set procedures scrutinised by auditors, regulated by voluntary or legal controls

Buyer-Seller Relationships Technical selling – problem solving expertise Interpersonal relationships Exchange of information and value

long-term relationships - loyalty high switching costs integrated distribution supply-chain management

Pricing Specification - costing - quotation Competitive tendering Negotiated not fixed –Packaged –volume discounts –terms of payment, penalties

Promotion Specialist channels –trade press, direct marketing, internet –trade shows and conferences Awareness, credibility, reputation –PR, word-of-mouth Personal selling to close the sale Regular contact to build relationships –events, corporate hospitality, incentives

Readings Vitale, R and Giglierano, J Business to Business Marketing Southwestern/Thomson chapter one Kotler, Jobber chapters on Organisational Buyer /Business Markets