ma p b2b marketing

8/6/2019 MA P B2B Marketing

1/48

Marketing Applications andPractices

Rubina DMello


2/48

B2B Marketing


3/48

B2B Marketing Organizational sales and purchases of goods

and services to support production of other

products, to facilitate daily companyoperations, or for resale.


4/48

What are these? Industrial markets

oAll organizations that purchase goods and

services to use in the creation of their owngoods and services.

Industrial marketingo The process of matching and combining the

capabilities of the supplier with the desiredoutcomes of the customer to create value forthe customers customer.


5/48

B2B versus B2C Marketing B2C=Business-to-Consumer Market=

businesses sell products and services to

consumers for household or personal use B2B=Business-to-Business Market=

businesses sell products and services to otherbusinesses for use in their daily operations or

for making other products and services


6/48

B2C versus B2B Marketing The B2B market is 5X as large as

theB2C

market in the USA.


7/48

Difference between B2B & B2CIndustrial Markets Consumer Markets

Structure Relatively fewer buyers Clusteringgeographical concentration

Large number of customersMass markets

Products Complex, needing customization,alliedservices important

Standardised for mass markets

BuyerBehaviour

Functional involvement, rationalmotives, importance of relationships

Psychological motives, familyinvolvement

Decisions Distinct, observable stages Mental, not observable

Channels Shorter, more direct Indirect, multiple

Promotion Importance of personal selling Advertising important

Price Bidding and negotiations a norm; listprices for standard products of lowvalue

List prices and standard discounts


8/48

Difference between B2B & B2CB2B Marketing B2C Marketing

Relationship driven Product driven

Maximize the value of relationship Maximize the value of the transaction

Small, focused target market Large target market

Multi-step buying process, longersales cycle

Single step buying process, shortersales cycle

Brand identity created on personalrelationship

Brand identity created throughrepetition and imagery

Education and awareness buildingactivities

Merchandising and point of purchaseactivities

Rationale buying decision based on

business value

Emotional buying decision based on

status, desire or price


9/48

3. Meet customerneeds in a way that provides

value to the customer

4. Meet organizational goals

2. Understand customer needs

1. Be contextually

market sensitive

In Industrial marketingscenario, to

successfully practicethe marketing concept,

it should:

The Marketing Concept


10/48

The Value Chain and

Offering

Added value

Infrastructure

Human resources

Procurement

Technology &

technology developmentSupport activities

Margin through value

Direct activities

Customer serviceMarketing & salesOutbound logistics

OperationsInbound logistics

Offering:

ProductServiceImage

AvailabilityQuantity

Evaluated Price

TargetCustomers

Creates

Perceives

Margin through value


11/48

COMPONENTS OF THE

BUSINESS MARKET

Commercial market Individuals and firmsthat acquire products to support, directly or

indirectly, production of other goods andservices.

Trade industries Retailers or wholesalersthat purchase products for resale to others.

Government. Public and Private Institutions


12/48

Types of OrganizationalC

ustomersGovernment

Units

Nonprofit andNot-for-ProfitOrganizations

CommercialEnterprises

IndustrialDistributors

Value-Added

ResellersOriginalEquipmentManufacturers

Users or End Users

local,state, and federalgovernment units

Churches,hospitals,colleges,nursing homes,

etc.


13/48

Producer Types

Component Partsand Manufactured

MaterialsProducers

CapitalGoods

Manufacturers

Accessory

EquipmentSuppliers

Raw

MaterialsProducers


14/48

Producer TypesOften compete in price sensitivemarkets

Raw materials markets are oftendominated

by a few very large producers

Products lose identity onceincorporated

into the customers product

Seek value addedpositionsRaw

MaterialsProducers


15/48

Producer Types

More differentiated from direct

competition by the valueadded tothe customers product.

Usually retain identity evenwhenincorporated into thecustomers product.

Parts retain their same formwhenincorporated.

Mico Fuel pumps are anexample.

Component Partsand Manufactured

MaterialsProducers


16/48

Producer Types

Adherence to specifications

reducesopportunities for differentiation.

Involves the development ofspecifications to ensure thatorganizational needs are met.

Capital goods involve largepurchases with considerable risk forthe customer.

Customers expect an offering thatincludes installation, equipment,

and accessories.

CapitalGoods

Manufacturers


17/48

Producer Types

Accessory equipment is usuallyproduced by an independent

supplier.

Accessories can be added to a

bundled offering by a channelintermediary.

Accessory equipment is equipmentthat works with some other offering.

The key to providing value is to becompatible with industry standardsfor the primary offering.

AccessoryEquipmentSuppliers


18/48

Market Demand

JointDemand

DerivedDemand

VolatileDemand

InelasticDemand

InventoryAdjustment

Demand characteristics vary from market to market.


19/48

DERIVED DEMAND The linkage between demand for a companys output and its purchases of

resources such as machinery, components, supplies, and raw materials.

VOLATILE DEMAND Derived demand creates volatility; for example, demand for gasoline pumps

may be reduced if demand for gasoline slows.

JOINT DEMAND Demand for two products used in combination with each other.

INELASTIC DEMAND Demand not significantly influenced by price changes.

INVENTORY ADJUSTMENTS Just-in-time (JIT) inventory policies boost efficiency by cutting inventory and

requiring vendors to deliver inputs as they are needed.


20/48


21/48

Three Kinds of

Organizational Purchases Straight rebuy

o a routine repurchase that may have been made

many times before Modified rebuyo the in-between process where some review of

the buying situation is donethough not asmuch as in new-task buying

New-task buyo a firm has a new need and the buyer wants a

great deal of information


22/48


23/48

Multiple Roles in the

Buying Center

BuyingCenter

Users

Buyers

Gatekeepers Deciders

Influencers


24/48

SEGMENTING B2B

MARKETSSegmentation helps marketers develop the most appropriatestrategy.

SEGMENTATION BY DEMOGRAPHICCHARACTERISTICSo Grouping by size based on sales revenues or number of

employees.

SEGMENTATION BY CUSTOMER TYPE

Grouping in broad categories, such as by industry.

Customer-based segmentation Dividing a business-to-businessmarket into homogeneous groups based on buyers productspecifications.


25/48

SEGMENTATION BY END-USE APPLICATION

End-use application segmentation Segmenting a business-to-

business market based on how industrial purchasers will use theproduct. Example: A supplier of industrial gases that sells hydrogen to some

companies and carbon dioxide to others.

SEGMENTATION BY PURCHASE CATEGORIES

Segmenting according to organizational buyer characteristics. Example: Whether a company has a designated central purchasing

department or each unit within the company handles its ownpurchasing.


26/48

Common

Bases forSegmentation

By productoffered

By industry inwhich thecustomer

participates

By size ofthe customers

company

By buyingbehavior

By technologyused by thecustomer

By sizeof account

By geographicregion


27/48

Attractiveness of SegmentsMarket

Attractiveness

CompetitiveAttractiveness

ChannelAttractiveness

InternalAttractiveness

Attractiveness Other

Considerations


28/48

Market Attractiveness

MarketAttractiveness

Large and fast growingsegments are more attractivethan smaller and slow-growingsegments

This necessitates accuratelypredicting future growth.

Other issues includeo Adaptability of market

segments,o Existing relationships with

the buying center members,and

o Available customers budget


29/48

Competitive Attractiveness

CompetitiveAttractiveness

What is the likely existenceor emergence of

competition in the marketsegment?

Are there barriers to entryfacing competitors?

Does being first to market

provide an advantage?


30/48

Channel Attractiveness

ChannelAttractiveness

It is preferable to targetcustomers already served bywell-established marketing

channels, or if an existingchannel can be adapted, itmay serve the segment.

When there is no suitableexisting channel, a marketview of competition may benecessary.o How is the existing need

being met?o

Will customers switch

?


31/48

Internal Attractiveness

InternalAttractiveness

A segment is more attractivewhen the segments needscan be met by the firms corecompetencies.

This is identified throughenvironmental analysis.


32/48

Attractiveness OtherC

onsiderations

Attractiveness Other

Considerations

Other factors that mightcause a segment to ratedhigher or lower include:o Public policy (excessive

government regulationcan cause a segment tobe downgraded)

o Organizational goals(market share goals maymake firms moreaggressive in targeting)


33/48

THE BUSINESS BUYING

PROCESS More complex than the consumer decision process. Takes place within formal organizations budget, cost,

and profit considerations.

INFLUENCES ON PURCHASE DECISIONSo Environmental factorso Organizational factors

o Social Factorso Personal Factors


34/48

Stages of Organizational Buying

Process

Problem Recognition General Description of need

Product specifications Supplier search Acquisition and analysis of proposals Supplier selection

Selection of order routine Performance review


35/48

Straight rebuy example :

buying office suppliesStage Result

Definition Monthly rebuy of office supplies; office manager fills inthe order form

Selection Minimal consideration; decided to use their regularsupplier; order faxed to supplier

Deliver solution Supplier delivers order

End game Supplies used; invoice arrives and is paid; suppliercalls to check on satisfaction


36/48

New Task example : acquiring automated

sales and customer management system

Stage Result

Definition Recognised problem; analysed with help of consultant;supplier helps write specifications and RFP; supplierssubmit proposals

Selection Discussions and negotiations with suppliers; supplierselected (the one who helped initially); contratnegotiated and signed

Deliver solution System delivered in modules; fested, user trained,system modified as needed

End game System operated; result observed and analysed;discussions begin with supplier for acquisition of new

modules and upgrades


37/48

The Marketing Mix:The 4 Ps of Marketing

Product Price

Promotion

Place

TheMarketing

Mix


38/48


39/48


40/48


41/48

Types of Negotiating Situations inB2B

SalesSituation

Stand-alone

Transaction

Balanced between

Transaction andRelationship

Effectivebargainingstyles

Competitive;

Problem solving

Problem solving;

Compromising

Effectiveapproach Use of leverage

Seek commoninterests


42/48

Marketing Mix: Place

Place is about getting the product to thecustomer in order to maximize economic utility.

Economic

Utility

Form Utility (having the product in the rightsize package, quantity, etc.)

Time Utility (having product available atuseful times)

Place Utility (getting the product to thecustomer where & when it is expected)

Possession Utility (making it easy totransfer ownership to the buyer)


43/48

Marketing Mix:Promotion

Consumermarketing Emphasis is frequently

on advertising. Communication with

customers is often amonologue. Relationship is often

brief.

Industrialmarketing Emphasis is frequently on

personal selling. Communication with

customers should be adialogue. Relationship is often long-

lasting.

Business-to-business marketing requires a differentemphasis on different parts of the promotional mix


44/48

Factors in designing promotion

mix strategies


45/48

Advertising is only oneaspect of the entiremarketing strategy.

The advertising decision

process begins with theformulation ofadvertising objectives.

Equally important is theevaluation and selection

of the media.

The Decision Stages forDeveloping the Business-to-Business Advertising Program


46/48

B2B Selling Characteristics

1. Repeated, ongoing relationships

2. Solution-oriented, total systemeffort

3. Long time period beforeselling effort pays off

4. Continuous adjustment of needs

5. Creativity in problem solving oftendemanded by buyer of seller


47/48

The Product Life Cycle


48/48

ma p b2b marketing

Documents