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LEARNING OBJECTIVES 6-2 Learning Objectives How do B2B firms segment their markets? How does B2B buying differ from consumer buying behavior? What factors influence the B2B buying process? How has the Internet changed B2B marketing?

6-3 B2B Marketing Who is the end user?

6-4 B2B Markets U.S. Census Website

6-5 Manufacturers or Producers Buy raw materials, components or parts Manufacture their own goods Gear Expo News Clip

6-6 Resellers ManufacturerResellerRetailer

How is this B2B ad similar to B2C ads? 6-7

In what kind of publication might this appear? 6-8

6-9 _________________ buy products from other businesses but do not significantly alter the form of the products they buy. A. Producers B. Consumers C. Resellers D. English auctioneers E. Gatekeepers

6-10 Chipwich Teaches Business

6-11 Institutions Schools, Museums and Religious Organizations London Museum News Clip

6-12 Government US Government spends $2.1 trillion procuring goods State and local governments also make significant purchases Firms specialize in selling to government

6-13 Adding Value: Paris Runways

Identify the various types of B2B markets. 2. What are NAICS codes and how are they used? Check Yourself

6-15 B2B Buying Process

6-16 Compared to the B2C process, the information search and alternative evaluation steps in the B2B process are: A. central planned. B. subject to government regulation. C. more formal and structured. D. conducted before need recognition. E. all of the above.

6-17 Stage 1: Need Recognition Can be generated internally or externally Sources for recognizing new needs:  Suppliers  Salespeople  Competitors

6-18 Stage 2: Product Specifications Used by Suppliers to develop proposals Can be done collaboratively with suppliers

6-19 Federal Business Opportunities Website Stage 3: RFP Process (Request for Proposal)Request for Proposal

6-20 Step 4: Proposal Analysis, Vendor Negotiation and Selection Often several vendors are negotiating against each other Considerations other than price play a role in final selection

6-21 Step 5: Order Specification Firm places the order The exact details of the purchase are specified All terms are detailed including payment

6-22 During the __________ stage of the buying process B2B buyers invite alternative suppliers to bid on supplying what is requested. A. information search B. need recognition C. RFP D. vendor analysis E. all of the above

6-23 Step 6: Vendor Analysis

6-24 Check Yourself 1. Identify the stages in the B2B buying process. 2. How do you do a vendor analysis?

6-25 Factors Affecting the Buying Process Buying Process Buying Situation Organization Culture The Buying Center

6-26 The Buying Center

6-27 Which of the following is NOT one of the roles typically played by one of the members of a buying center? A. reseller B. initiator C. influencer D. decider E. gatekeeper

6-28 Wine Entrepreneur

6-29 Organizational Culture

6-30 Buying Situations

6-31 New Buy Purchasing for the first time Likely to be quite involved The buying center will probably use all six steps in the buying process

6-32 Modified Rebuy Purchasing a similar product but changing specifications Current vendors have an advantage

6-33 Straight Rebuys Buying additional units or products that have been previously purchased Most B2B purchases fall into this category

6-34 In a ___________ B2B buying situation, the buying decision is likely to be quite involved. A. new buy B. modified rebuy C. straight rebuy D. either a new buy or a modified rebuy E. all of the above

6-35 Power of the Internet Putting Volkswagen Together Realigned purchasing Introduced iPAD (internal purchasing agent desk) Cut time per order from 60 to 20 minutes Online connection to suppliers Online connection to suppliers

6-36 Role of the Internet in Business-to-Business Marketing Sales support Virtual trade shows Private exchange Product design Online auctions

How is this ad B2B and B2C? 6-37

6-38 Check Yourself 1. What factors affect the B2B buying process? 2. What are the six different buying roles? 3. What is the difference between new buy, rebuy, and modified rebuy?

6-39 Glossary Business-to-business (B2B) marketing refers to the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, and/or for resale by wholesalers and retailers. Return to slide

6-40 Glossary Buying center participants are people responsible for the buying decisions. Return to slide

6-41 Glossary A private exchange occurs when a specific firm (either buyer or seller) invites others to participate in online information exchanges and transactions. Return to slide

6-42 Glossary The request for proposals (RFP) is a process through which buying organizations invite alternative suppliers to bid on supplying their required components. Return to slide

6-43 Glossary Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. Return to slide