7 - 1 © 1997 South-Western College Publishing LHM Slides Created and Designed by Apple Mountain Software, Inc. Marketing Charles W. Lamb, Jr. Joseph F. Hair, Jr. Carl McDaniel Chapter 7: Business-to-Business Marketing Chapter 7: Business-to-Business Marketing

7 - 2 © 1997 South-Western College Publishing LHM Frequently Cited Strategic Alliance Goals 1. Reducing risks and costs of entering new markets 2. Filling gaps in current market and technological bases 3. Turning excess manufacturing capacity into profits 4. Accelerating new product introductions 5. Overcoming legal and trade barriers 6. Extending the scope of existing operations 7. Cutting costs when divesting operations 8. Producing economies of scale Source: From “Strategic Alliances: Partnering for Success” by Julie Cohen Mason. Reprinted by permission of the publisher from Management Review, May Copyright © 1993, American Management Association, New York. All rights reserved.

7 - 3 © 1997 South-Western College Publishing LHM Business-to-Business Customers ProducersResellers GovernmentsInstitutions

7 - 4 © 1997 South-Western College Publishing LHM Business Versus Consumer Markets Characteristic Demand Volume # of Customers Location Distribution Nature of Buy Buying Influence Negotiations Reciprocity Leasing Promotion Business-to-Business Organizational Larger Fewer Concentrated More Direct More Professional Multiple More Complex Yes Greater Personal Selling Consumer Individual Smaller Many Dispersed More Indirect More Personal Single Simpler No Lesser Advertising

7 - 5 © 1997 South-Western College Publishing LHM Types of Business Products Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services Major Categories of Business-to- Business Products Major Categories of Business-to- Business Products

7 - 6 © 1997 South-Western College Publishing LHM Buying Centers Initiator Gatekeeper Decider Users Influencer/ Evaluator Purchaser Buying Center Roles

7 - 7 © 1997 South-Western College Publishing LHM Buying Situations Less Involvement More Involvement Straight Rebuy Straight Rebuy Modified Rebuy Modified Rebuy New Buy New Buy

7 - 8 © 1997 South-Western College Publishing LHM Purchase Process Acquisition and Analysis of Proposals Search for Qualified Suppliers Development of Specifications Product Definition Need Recognition Product Performance Evaluation Product Inspection Order Placement Selection of Supplier

7 - 9 © 1997 South-Western College Publishing LHM Rating scale Example of Vendor Analysis Example of Vendor Analysis in a Microcomputer Buying Situation Poor (1) Fair (2) Good (3) Excellent (4) Unacceptable (0) Attributes Compatibility Affordability Reliability Service/support Flexibility Product line depth X X X X X X Total score: = 19 Average score: 19 ÷ 6 = 3.17