1. The Business-to-Business Market
Individuals and organizations responsible for buying goods and services for business purposes.
Business and Industry
Governments
Institutions
Wholesalers and Retailers
Professions
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2. Organizational Buying
“A decision-making process where a firm establishes the products it needs and then identifies, evaluates, and selects suppliers.”
B2B organizations have accepted relationship marketing processes more quickly than B2C organizations.
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3. B2B Market Characteristics
Concentration and location of buyers
Derived demand and joint demand
Practical buying criteria
Formal buying process
Centralized decision-making
Relationships (CRM)
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4. Demand Characteristics
Derived
Demand
Business demand is actually derived from consumer demand
Production and marketing of one good is dependent upon another good
Joint
Demand
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5. Practical Buying Criteria
Buyers evaluate competing offerings. The key criteria tend to be:
Price
Quality
Service and Services Offered
Continuity of Supply
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Vendor Analysis
“An evaluation of potential suppliers based on their ability to meet predetermined criteria.”
Technological capabilities
Consistency of product
Overall Quality
Delivery
Quantity
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Formal Buying Process
One individual may sign the order but many individuals influence the decision.
Buying Committees (formal)
Buying Centres (informal)
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Buying Committee
Production
Marketing
Key personnel from various departments are involved in the decision—a team approach is taken.
Engineering
Finance
Purchasing
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Buying Centre
Users
Influencers
Participating individuals perform certain roles in the buying process.
Buyers
Deciders
Gatekeepers
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10. Centralized Purchasing
Buying in larger quantities at a central location results in better prices
In a retail environment assortment decisions are made centrally.
Electronic reordering is now standard practice.
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11. Integration and Partnering
CRM practices are now common in B2B marketing.
Suppliers
Manufacturer
Distributors
Consumers
Design
Source
Produce
Market
Cooperation and teamwork replace competition and conflict.
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12. Copyright © 2007 Pearson Education Canada
Buying Decisions
Types
New Task
Modified Rebuy
Straight Rebuy
Decisions are classified based on the time needed to make a decision and the cost (risk).
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New Task Buy
Buying an expensive item for the first time.
High price
High risk
Formal process
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Modified Rebuy
Lower prices and purchased infrequently.
Some risk
Search for value
Performance important
Buying Centre
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Straight Rebuy
Inexpensive items bought on a regular basis.
Minimal risk
Ongoing source of supply
Repeat order routine
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16. Organizational Buying Model
Problem Recognition
A defined and rational approach to buying
Need Description
Product Description
Performance Review
Supplier Search
Proposal Solicitation
Order Routine Specs.
Supplier Selection
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