Professional Documents
Culture Documents
B to B MARKETING
B to B MARKETING
TYPES
OF BUSINESS
MARKETS/
(CUSTOMERS)
BUSINESS MARKETS
BUSINESS MARKETS
The major industries making up the
business market are
Agriculture,
Forestry,
Fisheries;
Mining;
Manufacturing;
Construction;
Transportation;
Communication;
Public utilities;
Banking, finance,
Insurance;
Distribution;
Services.
RESELLER MARKET
Comprises
organizations that buy
products & services to
resell.
For instance, retailers
& wholesalers.
GOVERNMENT MARKET
Consists of government
agencies that buy
products & service to
help them carry out
their activities.
NON-PROFIT ORGANIZATIONS
Buy products & services to serve
BUSINESS
MARKETS
CHARACTERISTICS
PROFESSIONAL PURCHASING.
Business goods are often purchased by
trained purchasing agents, who must follow
their organizations' purchasing policies,
constraints, and requirements.
Many of the buying instruments-for
example, requests for quotations,
proposals, and purchase contracts- are not
typically found in consumer buying.
PROFESSIONAL PURCHASING.
Professional buyers spend their
careers learning how to buy better.
This means that business
marketers have to provide greater
technical data about their product &
its advantages over competitors
products.
DERIVED DEMAND.
DERIVED DEMAND.
Business buyers must also pay close attention
to current & expected economic factors, such as
the level of production, investment, consumer
spending, & the interest rate.
In a recession, business buyers reduce their
investment in plant, equipment, & inventories.
Business marketers can do little to stimulate
total demand in this environment.
They can only fight harder to increase or
maintain their share of demand.
INELASTIC DEMAND.
Demand is especially inelastic in the
short run because producers cannot
make quick changes in production
methods.
Demand is also elastic for business
goods that represent a small
percentage of the item's total cost, such
as shoelaces.
INELASTIC DEMAND.
The total demand for many business
goods & services is inelastic that is, not
much affected by price changes.
Shoe manufacturers are not going to
buy much more leather if the price of
leather falls, nor will they buy much less
leather if the price rises, unless they
can find satisfactory substitutes.
FLUCTUATING DEMAND.
There
is a concentration of
pharmaceutical & chemical industries in
industrial townships near Ahmedabad
in Gujarat.
Several software companies are
based in Bangalore in Karnataka.
The geographical concentration of
producers helps to reduce selling costs.
At the same time, business marketers
need to monitor regional shifts of
certain industries.
DIRECT PURCHASING.
ORGANISATIONAL
BUYING
BEHAVIOUR
INDIVIDUAL BUYING
BEHAVIOUR
ORGANISATIONAL BUYING
BEHAVIOUR
INDIVIDUAL BUYING
BEHAVIOUR
2. Size of Purchases:
Organisations generally
purchase, in larger
quantities.
2. Size of Purchases:
Individuals generally
purchase in smaller
quantities than
organisations
ORGANISATIONAL BUYING
BEHAVIOUR
INDIVIDUAL BUYING
BEHAVIOUR
4. People Involved:
Generally, more people
or departments are
involved in buying or
decisions.
4. People Involved:
Generally, only the
individual and family
and friends may be
involved in buying
decisions.
ORGANISATIONAL BUYING
BEHAVIOUR
INDIVIDUAL BUYING
BEHAVIOUR
6. Complexity of Products:
In case of organisational
buying, organisational
products may be more
complex in nature as
compared to consumer
products.
6. Complexity of Products:
In case of individual buying,
consumer products are not
so complex as compared to
organisational products.
ORGANISATIONAL BUYING
BEHAVIOUR
INDIVIDUAL BUYING
BEHAVIOUR
7. Advertising:
The organisational buying
is influenced mainly by ads
business magazines or
business journals.
7. Advertising:
The individual buying is
influenced in mainly by ads
in magazines, newspapers,
radio, T.V. etc.
8. Personal Selling:
Personal selling is
emphasized in case of
organisational buying
behaviour.
8. Personal Selling:
Personal selling may not be
emphasized in case of
individual buying
behaviour.
ORGANISATIONAL BUYING
BEHAVIOUR
INDIVIDUAL BUYING
BEHAVIOUR
9. Knowledge of Products:
Generally, organisational
buyers have a good
knowledge of products
which they buy for their
business purpose.
9. Knowledge of Products:
Generally, individual buyers
may not have complete
knowledge of the products,
especially technical
aspects.
ORGANISATIONAL BUYING
BEHAVIOUR
INDIVIDUAL BUYING
BEHAVIOUR
11.Channels of Distribution:
In case of organisational
buying, the goods are
mostly distributed through
direct channels.
11.Channels of Distribution:
In case of individual buying,
the goods are mostly
distributed through indirect
channels.
12. Pricing:
Organisational products
are priced low due to
bulk purchases.
12. Pricing:
The individual products
are priced high due to
purchases in smaller
quantities.
BUYING
SITUATIONS
BUYING SITUATIONS
BUYING SITUATIONS
BUYING SITUATIONS
STRAIGHT REBUY
A business buying
situation in which the
buyer routinely reorders
something without
any modifications .
BUYING SITUATIONS
MODIFIED REBUY
A business buying
situation in which the
buyer wants to modify
product specifications,
prices, terms, or suppliers.
BUYING SITUATIONS
NEW TASK
A business buying
situation in which the
buyer purchases a
product or service for
the first time.
BUYING SITUATIONS
BUSINESS
MARKETING
SEGMENTATION
Demographic
Industry: Which industries
should we focus on?
Company size: What size
companies should we focus on?
Location: What geographic
areas should we focus on?
OPERATING VARIABLES
Purchasing Approaches
Purchasing function organization: Should
we focus on companies with highly
centralized or decentralized purchasing
organizations?
Power structure: Should we focus on
companies that are Engineering dominated
or Financially dominated?
Nature of existing relationships: Should
we focus on companies with which we have
strong relationships or simply go after the
most desirable companies?
Purchasing Approaches
General purchase policies:
Should we focus on companies
that prefer leasing? Service
contracts? Systems purchases?
Sealed bidding?
Purchasing criteria: Should we
focus on companies that are
seeking quality? Service? Price?
SITUATIONAL FACTORS
Urgency: Should we focus on
companies that need quick delivery or
service?
Specific application: Should we focus
on certain applications of our product
rather than all applications?
Size of order: Should we focus on
large or small orders?
PERSONAL CHARACTERISTICS
Buyer-seller similarity: Should we
focus on companies whose people and
values are similar to ours?
Attitudes toward risk: Should we focus
on risk-taking or risk-avoiding
customers?
Loyalty: Should we focus on companies
that show high loyalty to their suppliers?
FACTORS
INFLUENCES/
AFFECTING CHANGING
ORGANISATIONAL
BEHAVIOUR
I.ORGANISATIONAL INFLUENCES:
3. INTERPERSONAL INFLUENCES:
In
3. INTERPERSONAL INFLUENCES:
4. ENVIRONMENTAL INFLUENCES:
5. MARKETING INFLUENCES:
ORGANISATION
BUYING
PROCESS
3. SUPPLIER IDENTIFICATION:
The
The
5. SUPPLIER SELECTION:
On
6. ORDER SPECIFICATION:
The
buyer places an order with the
suppliers and mentions the
specifications with respect to :
Quantity needed
Technical aspects
Delivery time, etc.
7. REVIEW:
In this stage, the buyer periodically reviews the
performance of the chosen suppliers.
Generally, the buyer reviews the performance
by obtaining the feedback from the users of the
suppliers products.
If the users are satisfied with the product, the
buyer may continue with the same supplier.
But, if the users are not satisfied, then, the
buyer may decide to modify or end the
relationship with the supplier.
BUSINESS
BUYER
BEHAVIOR
THE RISK-VALUE
PURCHASING
DECISION
MATRIX
THE DMU/
BUYING
CENTRE ROLE
IN BUYING
PROCESS
Influencers: Add
information or constraints
in the buying process.
Gatekeepers: Can
control the flow of
information into the
buying process.
TYPES OF
PURCHASING
PROCESSES
4. Bottleneck products.
These products have low
value and cost to the
customer but they involve
some risk (e.g., spare
parts).
The customer will want a
supplier who can
STAGES OF
BUSINESS
BUYER
TARGET
BUSINESS
SEGMENTS
2. Solution-oriented customers
(consultative selling). They want
low prices but will respond to
arguments about lower total cost
or more dependable supply or
service.
(quality
selling). They want the best
performance in terms of
product quality, assistance,
reliable delivery, and so on.
4. Strategic-value customers (enterprise
selling). They want a fairly
permanent sole-supplier
relationship with your
company.
3. Gold-standard customers
7) A Partnership-focused Segment,
BUSINESS
MARKETING
STRATEGY FOR
STP
GUIDE LINES
FOR
SUCCESSFUL
BRANDS
BUYERSUPPLIER
RELATIONSHIPS
BUYER-SUPPLIER RELATIONSHIPS
BUYER-SUPPLIER RELATIONSHIPS
5. Cooperative systems - although coupled
closely in operational ways, neither party
demonstrates structural commitment through
legal means or adaptation approaches.
6. Collaborative- much trust and commitment
leading to true partnership.
7. Mutually adaptive - much relationshipspecific adaptation for buyer and seller, but
without necessarily strong trust or cooperation.
8. Customer is king - although bonded by a
close, cooperative relationship, the seller adapts
to meet the customer's needs without expecting
much adaptation or change on the part of the
MANAGING BUSINESS
MARKETING CHANNELS
Facilitate
local
distribution
Process
returns
Provide a
trained
sales force
Provide
marketing &
research support
Gather
assortments
for customers
Industrial
Distributors
(Wholesalers)
provide some or all
of these functions
Purchase
large quantities
Provide
warehousing &
delivery facilities
Take
responsibility
for inventory
obsolescence
Handle
financial
records
Offer financing
Wholesaler
Retailer
Wholesaler
Retailer
The retailer (or final consumer) is the object of the manufacturers/ service
providers interests. The needs of the wholesaler are considered unimportant.
Direct distribution
Manufacturer has full responsibility
to perform all channel tasks
May be required as a result of
customer needs, control over the
selling job, size of customers, and
extensive negotiation
Indirect distribution
Use of middlemen in the channel
Business channels involve relatively
few alternatives
Manufacturer's representatives and
distributors are most prevalent
Distributors perform full range of tasks
Reps focus on the selling job
DEGREE OF DIRECTNESS
1. Greater tendency for direct distribution in
business markets
Information platform
Transactional platform
Managing customer relationships
TYPES OF
DISTRIBUTION
TYPES OF DISTRIBUTION
INTENSIVE DISTRIBUTION
Needed when the availability of product at places very
convenient to the customers is a very important
determinant of sales eg. Consumables, raw materials
etc
EXCLUSIVE DISTRIBUTION
A distributor is given exclusive rights over a particular
geography . This is common with high value and high
tech products particularly when customer servicing is
very important
The company can have an exclusive network by not
allowing its dealers to sell competitor products
SELECTIVE DISTRIBUTION
It imparts better channel control. Usually adopted
where the product requires specialised servicing
IMPORTANCE AND
ADVANTAGES OF
PERSONAL SELLING
TYPES OF
INDUSTRIAL
SALESMEN
NEW PRODUCT
INTRODUCTION
SIX TYPES OF
NEW
PRODUCTS
ADAPTATIONS
COPY
A new product to the company but not to the market
Intense competition the me too product has to face
Eg. Anchor Tooth paste / Colgate Tooth paste
NEXT GENERATION
Existing products in which better features are incorporated due to
technological
developments
eg . Petrol Dispensing Pumps
CHARACTERISTICS
OF INDUSTRIAL
PRICES
FACTORS
AFFECTING
PRICING
PRICING
METHODS /
APPROACHES
PRICING
POLICIES
PRICING POLICIES
Discount Pricing
Trade Discount
Policy discount to Channel Partners
Quantity Discounts
Basic discount on targeted volume
Additional discount for additional off take
Seasonal Discounts
Additional discount during low sales period
to stimulate sales
Cash Discounts
Discount for paying before due date
GEOGRAPHIC PRICING
EX- WORKS
Goods manufactured and left outside the factory premises
FOB Factory
Freight on Board i.e Goods loaded on to a transport vehicle but
transportation cost to destination not paid
FOB DESTINATION
Freight on Board i.e Goods loaded on to a transport vehicle &
transportation cost to destination paid
FREIGHT EQUALISATION
The supplier assumes a certain freight cost in his price & balance is to be
paid by the customer . This is to ensure that there is no disadvantage with
competition due to high freight cost . This was used in the steel industry
during the price control regime.
BASING POINT
Another form of freight equalisation in which the price is considered by to
an important city or town , after which , the freight cost to the destination is
levied
CIF
Cost , Insurance and Freight used for International sales
COMMUNICATION
MIX
COMMUNICATION MIX
ADVERTISING
Newspaper
Magazines General & Trade specific
Internet
Television
SALES PROMOTION
Trade Shows / Industrial Exhibitions
Contests
Road Shows / In shop demonstrations
Seminars / Product demonstration
Volume linked pricing
PERSONAL SELLING
Direct sales presentation to the prospective buyer by a company salesman
Used when the product is highly technical in nature , is high in unit value , and
the number of customers is limited
Very important medium in B2B markets
PUBLICITY
Variety of programs designed to promote a product eg. Positive news through
the media on order wins / product performance
ADVERTISING DEFINITION
FUNCTIONS OF
INDUSTRIAL
ADVERTISING
Informing
BENEFITS OF
INDUSTRIAL
ADVERTISING
MAJOR DECISIONS
IN INDUSTRIAL
MARKETING
COMMUNICATION
Budget Decisions
The size of the promotional budget and
apportioning the amount of this amount to the
different
elements of the promotional mix are very
important but difficult decisions
Affordable Method
Percentage of sales Method
Objective and Task Method
Competitive parity Method
Communication Mix Decisions
The mix varies based on the effectiveness of a
particular medium in a particular segment
TRADE FAIRS
AND
EXHIBITION
FACTORS
INFLUENCING
SALES
PROMOTION
ADVANTAGES
Customers have become more choosy / price
sensitive
Effect on consumers behaviour
Effect on trade behaviour
DISADVANTAGES
Decrease brand loyalty
Increased price sensitivity
Quality image may be tarnished
Dealers forward buy and divert stocks
Merchandising support from dealers is doubtful