MKTG 426
Referrals (B2B vs B2C)
-About 84% of B2B purchases start with a personal referral. -About 92% of B2C purchases start with a trusted referral.
Marketing Funnel: B2C
-Awareness: search for info -interest: learn about products -consideration: read reviews, and compare products -intent: put product in cart -evaluation: review shopping cart and go to checkout -purchase: sales transaction is complete
Key Differences between B2B and B2C markets
-B2B: fewer customers, large-value transactions, customized products, negotiated price, length and complex selling process, usage determines value, derived demand. -B2C: many customers, smaller-value transactions, mass-produced products, fixed prices, brief and retail-focused selling process, multiple factors influence value, individual buying decision-maker, and media-stimulated demand.
Typology of buyer benefits: economic intangible benefits
-Burden of proof is on the vendor. Typical approaches include benchmark studies, pilot tests, or guarantees to offset customer risk -Low ability to communicate benefits to customers.
Typology of buyer benefits: economic tangible benefits
-Focus on comparing with current alternatives available to customers and show superior price to performance. -High ability to communicate benefits to customers
Stages in the B2B buying process
-State 1: Need recognition and benefits sought (what problem must be solved? What benefits must the solution provide? etc.) -Stage 2: Establish specifications and potential sources of supply (What specific features are required? Are there other requirements like delivery terms? etc.) -Stage 3: request for proposals (Have RFPs been issued to all qualified vendors?) -Stage 4: post-purchase evaluation (are we gathering sufficient feedback on vendor performance? What knowledge should we exchange?)
Types of value proposition: resonating focus
-The one or two points of difference (and maybe a point of parity) whose improvement will deliver the greatest value to te customer for the foreseeable future. -Answers: whats most worthwhile for our firm to keep in mind about your offering? -requires knowledge of how own market offering delivers superior value to customers compared to next best alternative. -potential pitfall is it requires customer value research
Goals of purchasing organizations
-Uninterrupted flow of materials -Manage inventory -improve quality -developing and managing supplier relationships -achieve lowest total costs -reduce administrative costs -advance the firm's competitive position
Marketing funnel: B2B
-awareness: search for info -interest: buyers examine specific product and reviews -consideration: buyers share research on products and brands with other stakeholders -intent: buyer gets product demo -evaluation: buyer gets contract proposal -purchase: sales transaction is completed.
Unqualified Leads (Salesforce)
A type of lead that has decided that they are not interested in what you have to offer.
Nurturing Lead (Salesforce)
A type of lead that is a potential customer who is not interested in buying at the moment but does anticipate a future need. You maintain contact w them using things like newsletters or product announcements.
New leads (Salesforce)
A type of lead that is any potential customer you know something about, such as someone that visited your website and entered their email or someone who signed up for a mailing list.
Working Lead (Salesforce)
A type of lead that is anyone with whom you're having an active conversation such as someone who follows you on social media or that you are speaking w/ on the phone.
Qualified Leads (Salesforce)
A type of lead who has shown interest in your offerings and wants to do business. These leads are known as sales leads.
Which of the following is not discussed as a benefit of segmentation? A. improved CRM B. Better understanding of customer needs and characteristics C. Decreased costs due to longer production runs and less product variations D. Evaluating market competition
C
Which of the following is the most important criteria for a viable segment? A. It must be possible to market to all individuals in a given segment via the same advertising medium B. Segmented individuals/firms must be in similar geographic areas C. Each customer within a segment must be similar to others in the segment yet distinctly different from customers in another segment.
C
Typology of buyer benefits: non-economic tangible benefits
Focus on building market reputation and brand image -high ability to communicate benefits to customers
The social bases of power: legitimate
Power based on elected, selected or appointed position of authority
______________ and ___________ approaches in segmentation tend to work best since they allow the data to better differentiate among the segments.
Predictive, post-hoc
This type of segmentation strategy determines in advance the number and types of segments
Priori method
When dealing with OBCs, this participant will be most concerned with negotiating prices and managing vendor performance
Purchasing
This type of Lead is someone who has shown interest in your offerings and wants to do business
Qualified lead
In B2B markets, it is negotiated pricing vs. the fixed pricing that is commonly found in B2C markets. (True/False)
True
This person within the decision making unit (DMU) actually makes the buying decision, whether or not they have formal authority to do so.
Decider
This agency buys the supplies used in common by all branches in the military
Defense Logistics Agency
Buying center role: initiator
initially perceives a problem and initiates the buying process to solve it.
Functional OBC particpants: manufacturing
make-or-buy decisions order and delivery patterns evaluation of performance by existing suppliers
Functional OBC participants: purchasing
managing vendor performance negotiating prices accumulating info about the supply environment coordinating input from functional participants
The example of the software consultant who cut vacation short to fix a problem falls under the _______,________ in the four types of benefit perceptions
non-economic, intangible benefit
The social bases of power: informational
possessing knowledge that others want or need
Functional OBC Participants: engineering
product performance requirements and technical specifications. screening and formal qualifications of vendor pool evaluation of alternative products
When selecting a market, questions revolving around the fit such as "What alternatives are available", "Who are the competitors", and "does the firm need to develop alliance partners and collaborators to provide the total end-user solution" fall under:
product-related factors
Institutional purchasing
purchasing is often influenced by political considerations or social goals -as with commercial enterprises, efficiency and cost containment are important -timing of purchases is sensitive to budget cycles -group purchasing consortium are becoming a trend to gain purchasing power -need institutional market specialists to craft a specialized market strategy
True/False Focusing on benefits of the product, don't want to work to understand those benefits, message must be simple, and it's a shorter purchasing process describes B2B marketing
False, this describes B2C.
In _________ markets, geography is more often used in segmentation because of the practical implication of reaching target customers within the constraints of a firm's coverage mode. A. Business to Business B. Business to Consumer C. Export
A
Straight rebuy
A business buying situation in which the buyer routinely reorders something without any modifications
Types of buying situations: New task Buy or "Design-In" Phase
A buying situation that is new and very different from anything that the buyer has faced previously. -customer is usually designing a new offering for downstream customers and is looking for both innovation and the highest value-added ingredients -This requires: --need for info search is high --extensive problem solving --engineering support often needed --buying criteria not well defined.
RFP (Request for Proposal)
A document that is sent out to potential vendors requesting them to provide a proposal on a product or service.
RFQ (Request for Quote)
A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors.
When looking at how B2B marketing interacts with B2B strategy, __________ describes what the firm does differently, better or as well as the best. It can be tied to virtually any value, proposition, including price, quality, service, speed or innovation.
Advantage
Types of value proposition: favorable points of difference
All favorable points of difference a market offering has relative to the next best alternative. -Answers: why should our firm purchase your offering instead of your competitor's? -requires knowledge of own market offering and the next best alternative. -potential pitfall: value presumption
Buying Behaviors (B2B)
As B2B offerings become more commoditized, the subjective and sometimes personal concerns of the business become more important. Research shows that with some purchases, considerations other than prices, such as reducing anxiety and enhancing the buyer's reputation, play important roles in the purchasing decision.
Buying process (B2B)
At least 31% of respondants confirmed that B2B purchases are taking longer than they used to. Buying cycles can take anywhere from weeks or months to unfold. This directly impacts how you attract awareness, generate leads, or even drive sales.
Points of parity
Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands
Buying process (steps)
Awareness > Evaluation > Purchase Awareness: whitepaper, ebook, kit, tip sheet, checklist, info webinar, etc. Evaluation: product webinar, case study, sample, FAQ, etc. Purchase: free trial, live demo, consultation, estimate, etc.
What is the first step in developing a marketing strategy based on the framework outlined in the article? A. Situational analysis B. Setting strategic objectives C. Positioning and targeting D. Customer relationship management
B
Which of the following is an example of a macro segmentation variable? A. group of answer choices B. A firm's industrial classification C. Key players in a firm's buying process D. The decision-making timeline of a firm E. The pricing structure of a firm's product offering
B
The system used to generate leads based on specific criteria and information. Companies collect information about potential buyers, and then tailor marketing methods and sales pitches to those prospects' needs
CRM
Consumer Relationship Management (CRM)
Collecting and managing detailed information about potential buyers and carefully manage customer touch points tailor marketing methods to maximize target buyer's needs. This is used to generate leads.
B2C Consumer Basics
Consumers focus on the benefits of the product and the decision is more emotional. They are less likely to be interest in lengthy marketing messages, messages should be simple and easy to understand. They desire a much shorter purchasing process.
B2B Consumer Basics
Consumers focus on the logic of the product and its features. The focus is more on people using the products than on the product itself. Marketing materials need to be more in-depth. Messages should focus on saving time, money, or resources and the expected ROI. The purchase process is much longer and involves detailed demos and trial periods.
Two major purchasing branches of the government
Department of defense, general services administration
Government Purchasing: requirements
Doing business with the government requires: -knowledge of complex rules of doing business -being aware of departmental purchasing needs -hiring specialized experts in government purchasing -often a different market unit to serve government accounts
Functional Organizational Buying Center (OBC) Participants
Engineering, manufacturing, marketing, general management, and purchasing. Each participant has its own priorities and interests.
Which social base of power is based on knowledge, experience, and skill set.
Expert
The social media platform topped with B2B buyers influencing them in a decision.
This buying center role controls the information to be reviewed by members of the buying group.
Gatekeeper
The two types of major purchasing branches in the federal government covered in class were the Department of Defense and ____
General Services Administration
In the organizational buying center (OBC), this role builds and maintains relationships with suppliers, communities, and other external stakeholders.
General management
Purchasing by Department of Defense
Includes military divisions which are responsible for their own major purchases, and the defense logistics agency, which supplies are used in common by all the branches.
Buying center roles
Initiator, influencer, gatekeeper, decider, buyer, and user
B2B Business strategy: marketing strategy components
Market, communication, distribution, price.
Straight rebuy
Most common type of business buying situation -buyer purchases a part, material, or service routinely, with little thought going into the buying process. These buyers have lots of experience, routine problem solving, long-term contracts usually involved, and supply chain is very important
In the _____ buying situation, the buying criteria is not well-defined.
New task buy
5 types of leads (salesforce)
New, working, nurturing, unqualified, and qualified.
Purchasing by General Services Administration
Non-defense procurement. This centralizes the procurement of many general-use items. the GSA Global Supply consolidates purchasing for the federal government and acts as a retailer for government units.
Branding and the vendor reputation are part of ________, tangible benefits
Non-economic
Typology of buyer benefits: non-economic intangible benefits
Not a viable option for acquiring customers, but the glue that holds buy to seller relationships together over time. -Low ability to communicate benefits to customers.
The salesperson's challenge
Organizational buying rarely involves just one individual, salespeople must ask: -who is involved in buying process? -what is each person's relative influence in the decision? -what criteria are important to each person in evaluating my products and services? -what benefits does each person seek?
When competition increases for the most valuable customers, you should move them to _____
Partners
B2B business strategy components
Scope, objectives, advantage
Th "secret sauce" in B2B marketing when it comes to the buying process is stage ____ within the request for propsals
Stage 2
Functional OBC participants: general management
Strategic or policy matters building and maintaining relationships with suppliers, communities, governments, and other external stakeholders
Purchasing
The activity of acquiring goods or services to accomplish the goals of an organization.
Total cost of ownership
This involves more than the purchase price. it considers: -factors that drive cost such as transportation -costs of acquiring, using, and managing products and services -quality, reliability, and other attributes over the product's complete life cycle -the value of the product to the firm and its customers --The least expensive product may not be the least costly product
These types of customers should only be in a company's portfolio temporarily
Underperformers
A lead with whom you're having an active conversation. This person could be signed up for your email lists, following you on social media, or on the phone with you right now.
Working lead
Modified rebuy
a business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers. Typically occurs when buyers are displeased with current suppliers performance or when the buyer is looking to reduce costs -requires moderate effort in info search
Functional OBC participants: marketing
impact of product design and costs on promotability, functionality, and price.
Types of value propositions: all benefits
includes all benefits customers receive from the market offering -Answers: why should our firm purchase your offering? -requires knowledge of own market offering -potential pitfall of benefit assertion
Buying center role: decider
actually makes the decision, whether or not they have formal authority to do so. Could be the owner, an engineer or even the buyer.
Buying center role: user
actually uses the product in question. Can be inconsequential or major in the buying process
Buying center role: influencer
affects the purchasing decision by providing technical info or other relevant (internal or external) info.
The social bases of power: referent
based on affiliation with a group that shares similar beliefs or experience
The social bases of power: expert
based on knowledge, experience, or skill set
Buying center role: gatekeeper
controls the info to be reviewed by members of the buying group (for example, buyer may screen advertising material and even salespeople)
Buying center role: buyer
has the formal authority to select and purchase products or services and the responsibility to implement and follow all procurement procedures.
The most common type of buying situation
straight rebuy
To acquire customers, companies must be on par with rivals on tangible financial benefits and use _________,_________ to differentiate their products
tangible, and non-financial benefits (branding)
The social bases of power: coercive
the ability to provide financial punishment, to dismiss an employee
The Social Bases of Power: reward
the ability to provide promotions, bonuses, other rewards
Points of difference
those characteristics of a product that make it superior to competitive substitutes