4-1 Chapter Overview 1. Categories of B-to-B buyers. 2. Business buying center. 3. B-to-B purchasing process. 4. Factors and issues in B-to-B communications. Business-to-Business Buyer Behavior 4

4-2 Intel 1. How many manufacturers of microprocessors can you identify? 2. Why is the Intel name so well-known? 3. To create a strong brand name, how important is the business-to-business marketing communication component of the IMC plan? Discussion Question 4

4-3 Types of Products Major equipment Major equipment Accessory equipment Accessory equipment Fabricated and component parts Fabricated and component parts Process materials Process materials Maintenance or repair parts Maintenance or repair parts Operating supplies Operating supplies Raw materials Raw materials Operating services Operating services Professional services Professional services Products for resale Products for resale

4-4 An example of an advertisement for accessory equipment.

4-5 SubmitOrder.com provides Internet B-to-B services.

What type of products do the following companies sell? What types of businesses might purchase the products? INTEGRATED LEARNING EXPERIENCE STOP

4-7 Types of Customers Manufacturers Manufacturers Government agencies Government agencies Institutions Institutions Wholesalers and distributors Wholesalers and distributors Retailers Retailers International firms International firms

4-8 T A B L E 6. 1 The Buying Center

4-9 INTEGRATED LEARNING EXPERIENCE STOP United Raw Material Solutions, Inc. 1.Which members of the buying center would use this Web site? 2.How would sellers utilize this Web site? 3.What advantage and disadvantages do you see for both the buyer and seller?

4-10 Factors Affecting Members of the Buying Centers Organizational influences Individual factors Cultural factors Social factors

4-11 This ad for Ceco Building Systems emphasizes a personal touch, providing the phone numbers of the heads of the company’s three plants.

4-12 Organizational Influences on Buying Center Organizational goals Operating environment Organizational resources Organizational structure Decision heuristics

4-13 F I G U R E 4. 2 Individual Factors Affecting the Behaviors of Buying Center Members

4-14 Types of Business-to-Business Sales Straight rebuy Modified rebuy New task

4-15 Business-to-Business Buying Process Identification of a need. Identification of a need. Derived demand Acceleration principle Joint demand Establishment of specifications. Establishment of specifications. Identification of alternatives. Identification of alternatives. Identification of vendors. Identification of vendors. Evaluation of vendors. Evaluation of vendors. Selection of vendors. Selection of vendors. Negotiate purchase terms. Negotiate purchase terms.

4-16 Typical Items Examined During a Vendor Audit Production capability. Production capability. Quality control mechanisms and processes. Quality control mechanisms and processes. Type and age of equipment used. Type and age of equipment used. Telecommunication and EDI capabilities. Telecommunication and EDI capabilities. Capacity to handle fluctuations in orders. Capacity to handle fluctuations in orders. Financial stability of the firm. Financial stability of the firm. Number of competitors that purchase from the firm. Number of competitors that purchase from the firm.

4-17 Selecting an EDI Vendor Sample Vendor Selection Criteria Fast deployment capability (minimize down time in installation) Full-service (hardware and software) Upgrade capability (for future growth) System architecture (compatibility with supplier systems) Cost (acquisition plus ongoing support) Dependability (of system) Availability (of support personnel after installation)

4-18 Building a B-to-B Brand Brand parity exists in most markets. Brand parity exists in most markets. Internet makes vendor searches easier. Internet makes vendor searches easier. Seek a clear, unified brand. Seek a clear, unified brand. Strip away anything that may be confusing about the brand. Strip away anything that may be confusing about the brand. Articulate a meaningful difference to buyers. Articulate a meaningful difference to buyers. Invest in the brand for the future. Invest in the brand for the future.

4-19 Marketing to the Buyer New trends in media selection. New trends in media selection. Greater use of the Internet by buyers. Greater use of the Internet by buyers. Three categories of buyers Three categories of buyers CEOs CEOs Top management Top management C-level management C-level management

4-20 Dual Channel Marketing Consumer and B-to-B markets Consumer and B-to-B markets Spin-off sales Spin-off sales Image concerns Image concerns Dual strategy Dual strategy Different communication messages Different communication messages Create different brands Create different brands Use multiple or different channels Use multiple or different channels Single strategy Single strategy Integrate communication message Integrate communication message Sell same brand in both markets Sell same brand in both markets Scan both markets for dual opportunities Scan both markets for dual opportunities

4-21 The Buying Community

4-22 Business-to-Business Trends Accountability. Accountability. Web sites and Internet marketing. Web sites and Internet marketing. Global branding. Global branding. Database mining. Database mining. Alternative communication methods. Alternative communication methods. Internal marketing communications. Internal marketing communications.

4-23 Identify the type of good or service. Identify the type of good or service. Identify retail outlets to sell your product. Identify retail outlets to sell your product. Identify wholesalers or distributors for your product. Identify wholesalers or distributors for your product. What types of businesses would be interested in purchasing your product directly? What types of businesses would be interested in purchasing your product directly? Relate the buying center concept to your product. Relate the buying center concept to your product. Identify vendors you will need to produce your product. Identify vendors you will need to produce your product. Building Your IMC Campaign