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Sample Oral Instructions:
Ladies and gentlemen, throughout today’s meeting we’re going to engage in some audience polling to find out what you’re thinking, what you’re up to and what you know. Now I’m going to ask for your opinion. We’re going to use your phones to do some audience voting just like on American Idol.
So please take out your cell phones, but remember to leave them on silent. You can participate by sending a text message.
This is a just standard rate text message, so it may be free for you, or up to twenty cents on some carriers if you do not have a text messaging plan. The service we are using is serious about privacy. I cannot see your phone numbers, and you’ll never receive follow-up text messages outside this presentation. There’s only one thing worse than spam – and that’s text message spam because you have to pay to receive it!

2. Understanding the Marketplace – Consumer Behavior
Ref: Text, chapter 6

3. Key concepts/ terms to know
Behavioral sciences
Consumer decision process model
Step 1 – Need recognition
Functional needs
Psychological needs
Step 2 – Information search; external, internal
Locus of control
Risk (performance, financial, social, physiological, psychological)
Step 3 – Evaluation of alternatives
Attribute sets: universal, retrieval, evoked
Evaluative criteria
Determinant attributes
Consumer decision rules: compensatory, noncompensatory,
Step 4 – Purchase and consumption
Conversion rate
Step 5 – Postpurchase (satisfaction, cognitive dissonance, customer loyalty, undesirable customer behavior)
Motives, Attitude, Perception, Learning, Lifestyle (psychological factors influencing decisions)
Maslow’s Hierarchy of Needs
Culture, reference group (social factors influencing decisions)
Involvement

4. Decision: Don’t Buy It costs $5000!! (1 negative) It looks like fun
It’s eco-friendly
Save me a lot of time walking
(3 positives)
It costs $5000!!
(1 negative)

6. +
Heart health

8. Involvement
Involvement is the consumer’s degree of interest in or concern about the product (high/ low involvement)

9. The Elaboration Likelihood Model
Ask students: What was the last thing you purchased? Based on their answers, get them to determine whether they used limited problem solving, extensive problem solving, or whether it was a habitual purchase or impulse purchase.

11. The Elaboration Likelihood Model
Ask students: What was the last thing you purchased? Based on their answers, get them to determine whether they used limited problem solving, extensive problem solving, or whether it was a habitual purchase or impulse purchase.

13. The Elaboration Likelihood Model
Ask students: What was the last thing you purchased? Based on their answers, get them to determine whether they used limited problem solving, extensive problem solving, or whether it was a habitual purchase or impulse purchase.

14. Look at these ads
Look at these advertisements and think about low involvement versus high involvement

16. Anti-smoking ad

18. The Elaboration Likelihood Model
Ask students: What was the last thing you purchased? Based on their answers, get them to determine whether they used limited problem solving, extensive problem solving, or whether it was a habitual purchase or impulse purchase.

19. associations: Colors, splash, Juicy, tropical, fruit… Low involvement
All about the
associations:
Colors, splash,
Juicy, tropical,
fruit…
Low
involvement

20. Anti-smoking ad Nothing to distract from core message High involvement
Core message grips you and demands attention
Nothing to distract from core message
High involvement

21. Understanding the Marketplace – Business-to-Business Marketing
Ref: Text, chapter 7

22. Exchange of value
“PRODUCT”
(Value)
Seller
Business
Buyer ?
VALUE

23. In this topic, we will:
Explain what business-to-business (B2B) marketing is, and who it involves
Explain the steps in the B2B buying process (and how it’s different from or similar to the B2C process)
Identify the different roles within the buying center; why it’s important for a vendor to understand these
Describe different types of organizational cultures, and how they may influence buying
Describe different buying situations

24. What is B2B marketing?
B2B marketing is when a business markets to another organization. Goods are sold so that they can:
Be used in the production of other goods or services
For consumption by the buying organization, or
For resale

25. What is B2B marketing?
B2B and B2C marketing are related – derived demand. The demand for B2B sales is often derived from B2C sales in the same supply chain

26. Fishermen
B2B
Fish Wholesalers
B2B
McDonald’s
B2C
Consumer

27. What is B2B marketing?
B2B transactions are more complex typically and involve multiple members on both the buying side and the selling side
Both are similar in their understanding of what marketing is, though:
They focus on creating value for their customers
They focus on key market or industry segments, and don’t try to serve everyone

29. B2B Markets Manufacturers and service providers Resellers
Buy raw materials, components, and parts, that they use to manufacture their own goods, which they sell to others
Resellers
Are marketing intermediaries that resell manufactured products without significantly altering their form
For example, wholesalers and distributors buy products from manufacturers and sell them to retailers, who sell them to consumers

30. B2B Markets Institutions Government
Such as hospitals, educational institutions, museums, religious organizations, sports teams
Government
In most countries, one of the largest purchasers of goods and services (US$4 trillion by the US Federal Government)
Central, state, local

31. The B2B Buying Process
The B2B buying process parallels the B2C process, with a number of differences

33. B2B Buying Process The CONSUMER Buying decision process
Although B2B and B2C buying processes are similar, this chapter highlights some key differences.

34. The B2B Buying Process
Both begin and end with need recognition and postpurchase evaluation, but the information search and alternative evaluation stages are more formal and structured in the B2B process
The process also typically involves groups (a committee) rather than individuals, and significantly more effort and consideration
Example: buying hammers

38. Stages 1-2: “specs” Suppliers/ sellers
Stage 1: Need Recognition - The buying organization recognizes an unfulfilled need through either their internal or external sources
Stage 2: Product Specification – The organization then needs to come up with potential specifications that vendors can use to develop proposals to fulfill that need
“specs”
Suppliers/ sellers

39. Stage 3: Stage 3: RFP Process
This is a Request for Proposals, a process through which the organization invites alternative vendors to bid on supplying their required components or specifications
This is done on the firm’s website, through a web portal, or by advertising in publications

40. Stage 3: “gateway” Stage 3: RFP Process
A web portal in B2B marketing is a specialized site that connects vendors and organizational buyers, allowing rich, relevant, information exchanges. They bring enormous efficiencies to the procurement or distribution processes

44. Stage 4:
“Seller”
Stage 4: Proposal Analysis, Vendor negotiation, and Selection
The buying organization then evaluates all the proposals it receives in response to its RFP
Clear criteria are used to evaluate the proposals such as the amount of experience of the vendor, ability to meet the specifications, and financial position

46. Stage 5: Stage 5: Order Specification
The order is placed with the selected vendor
This includes a detailed description of the goods, prices, delivery dates, and penalties for noncompliance
Vendor sends an acknowledgment; fills the order

47. Stage 6: Stage 6: Vendor Performance Assessment using Metrics
After the purchase, firms analyze the vendor’s performance so they can make decisions about future purchases, using formal, objective methods, and criteria called “performance metrics” (e.g., product quality, timely delivery)

48. After the vendor has performed the service or delivered the order, the buyer conducts a vendor analysis to judge whether the vendor should provide future purchases.

50. The Buying Center
In most large organizations, several people are responsible for buying decisions. They are known as “buying center participants”
There are generally six different buying roles within a typical buying center

51. The Buying Center ROLES
Group activity: Have the students diagram a purchase situation that involves all of these roles. The book uses the example of a doctor/patient relationship, but many similar examples also exist.
The Buying Center ROLES

52. Buying Center Roles
Initiator – the person who first suggests buying the product
Influencer – the person whose views influence other members of the buying center in making the final decision
Decider – the person who ultimately decides whether to buy, what to buy, how or where to buy
Buyer – the person who handles the paperwork of the actual purchase
User – the person who consumes or uses the product
Gatekeeper – the person who controls information or access, or both, to decision makers and influencers

56. Buying Center Roles
Initiator – the person who first suggests buying the product
Influencer – the person whose views influence other members of the buying center in making the final decision
Decider – the person who ultimately decides whether to buy, what to buy, how or where to buy
Buyer – the person who handles the paperwork of the actual purchase
User – the person who consumes or uses the product
Gatekeeper – the person who controls information or access, or both, to decision makers and influencers

57. Organization Culture
Culture can have a profound influence on purchasing decisions
A firm’s organization culture reflects the values, traditions, and customs that guide its employees’ behavior
Unspoken guidelines that employees share with one another
Example: Is it OK to accept gifts from a vendor?

58. Organization Culture example:

60. Common Buying Center Cultures
Autocratic – there may be multiple participants; one person makes the decision alone
Democratic – the majority rules
Consultative – one person makes a decision but solicits input from others before doing so
Consensus – all members of a team must reach a collective agreement that they can support a given purchase

61. Some notes
Companies use many different ways to build relationships in a B2B context, including the Internet and social networks
White papers – it is common to use white papers for marketing efforts in a B2B context

62. White papers: B2B buyers frequently read them before making a purchase
These are authoritative documents or reports that describe the solving of a problem using the firm’s product or technology.
They are valuable marketing tools, as they serve to educate customers

65. The Buying Situation Three types New Buys:
A customer purchases a product for the first time
The buying decision is likely to be very involved, proceed through all six steps, and involve many members of the buying center.
The most complex and challenging of the situations, and one that requires more time to be spent at each stage

69. The Buying Situation Modified Rebuy:
The buyer has purchased a similar product in the past but has decided to change some specifications (desired price, quality level, options or features, etc.)
Requires buyers to spend less time at each stage of the buying process than with the new buy situation (similar to limited decision making in B2C)

70. The Buying Situation Straight Rebuy:
This occurs when the buyer simply buys additional units of products previously purchased
A tremendous amount of B2B purchases fall in this category (e.g., bottled water)
The buyer is often the only member of the buying center involved in the process

71. Wrapping up
We can see how, in various ways, B2B marketing both differs from and mirrors the B2C process. Note:
The differences in the six stages;
The constitution of the buying center;
How the culture of the purchasing firm influences the process;
How the context of the buying situation all influences the process
The widespread use of the Internet in the process

72. Key concepts/ terms to know
B2B marketing – how it is similar to and different from B2C
Derived demand
Six stages of the B2B Buying Process
RFP
Web portal in B2B marketing
Performance metrics in vendor assessment
The buying center and participants
Organization culture and common buying center cultures: autocratic, democratic, consultative, consensus
White paper
Buying situations: new buy, modified rebuy, straight rebuy