MBA 706 topic 4 B2B Marketing

market structure

the __ __, unlike the consumer market, you have few buyers. A lot of times these organizations place large orders, the arrangements between buyers and sellers are not only negotiated but they are also complex term contracts, multi-year contracts that list or explain the rights and responsibilities and duties of each party.

1. straight buy 2. modified rebuy 3. new task

there are three key buying situations.

others category

when we look at agriculture, listed in the __ __ it's somewhat of overlapping classification. Agricultural firms, or agriculture organizations purchase a lot of chemicals and materials. They could fall under industrial buyers, but then at the same time, the outputs that they have, they're very different than our traditional manufacturer. Then you have non-profit organizations, and entertainment, and professional sports organizations.

number of people involved

when you have more people that are involved, you have to understand their rules. You have to understand their preferences, you have to understand their motivations. That's where again the value of personal selling comes into play.

service organizations.

you have transportation and logistics companies; you have hospitality and accommodation service providers.

personal selling

A lot of B2B markets are dependent on __ __ because remember there are a few clients, and these are large clients and losing one of these large clients can be a significant loss for a supplier. it's only natural that you're going to want to maintain a close relationship with your buyer and a lot of that is accomplished through __ __.

trade shows

Another key element of B2B markets is the __ __. it is a very powerful and a very prevalent platform that brings both B2B buyers and sellers together. There are a lot of opportunities therefore from a seller's standpoint not just to generate leads but also to demonstrate your products and services or do some a demonstration of the capabilities that your product has.

centralized, decentralized

Buying center can be __ or __ depending on the scale and scope of an organization and also the organizational purchase culture that exists.

problem is well-defined

If a __ _ __, a lot of times that can be related to basic supplies that a business is purchasing. Maybe perhaps maintenance supplies that an organization purchases. You have the problem defined fairly, clearly and up until a change is desired, a lot of that is considered straight rebuy. The number of people involved as we move from straight rebuy to modify and new task, more people within the buyer organization are going to be involved.

multiple suppliers & third parties

If you look at the example of food processing firms, not only are they purchasing commodities to develop whatever food product that they are manufacturing, they are also going to need some sort of a packaging operation that will require not just packaging machinery, but also relevant packaging of raw materials. Cable TV operators is another example, you have multiple needs and multiple vendors. Some vendors are going to provide you network equipment to manage and operate your back-end functions, and then some are going to be customer interfacing. For instance, the set-top boxes and the remote controls that come along with those set-top boxes.

number of vendors,

There are __ _ __ a lot of very capable vendors that are there. A lot of them offer comparable products. They have very comparable capabilities. From a buyer's perspective, from a hospital's perspective, if you have not dealt with those EMRs before. A lot of times it is not as clear to completely or in a tangible way differentiate one vendor from the other. It's only natural that you're going to look at multiple renders. Some of them you are probably going to invite in-house, they may have to do, not just one but multiple presentations to be able to win over the contract.

buying center roles.

There are different __ __ __. There are users that are involved, there are people that are responsible for the finance side of things in terms of paying for those orders, then you have those that are involved in vendor evaluation, then you have technical staff that may be involved in designing these specifications.

Decision time frame

When we move from straight to modify to new task, the __ __ __ starts to expand as well.

new regulation

When you move from straight rebuy to modify and new task, a lot of these modified and new task purchases, are driven by any __ __ that may have come in and requires an organization to change the way it has done business, which then feeds into perhaps looking at different vendors or different types of products that can be sourced from the same vendor.

new task situation

Where an organization, typically does not have a history with the product or the vendor. example of a hospital implementing for the first time a electronic medical records system. As they migrated from a paper-based system to these EMR, EHR type solutions, a lot of these hospitals and even small physicians' practices didn't have a lot of history dealing with these Centralized Record Management Systems. Not just centralized from a patient interface perspective, but also the backend operations, the financial, the insurance, the claims processing perspectives. When you're facing a __ __ situation from a seller standpoint, it requires an even more close working and close collaboration, than perhaps a modified rebuy situation.

purchasing a complete solution

__ _ __ __ example of a manufacturing organization that is trying to upgrade or trying to purchase IT solutions. You have a hardware component that is involved, that is typically a software component on how you're going to control that hardware. Then you have services in terms of integration, in terms of implementation, in terms of installation of that IT solution. Then you have post implementation maintenance of that solution. Remember for a manufacturing organization, managing their IT systems is a critical function, but that's not their goal function

straight rebuy

__ __ , routine purchases, typically low level of involvement, and it can often also be done through automated reordering.

Buying centers

__ __ are often involved in B2B markets. It's a much more formalized purchase process. So you would have cross-functional teams not just from manufacturing but also from marketing and other organizational areas

complex requirements.

__ __ is when organizations often, specifically if it's a new product that they have not purchased before or if it's a new market that they're trying to enter, they may have very complex specifications. Some of those might get developed in-house or require interaction with different vendors to be able to understand what exact product specifications are going to be.

Direct marketing

__ __ utilizes the databases to be able to identify who these buyers are, trying to develop an understanding of their purchase processes. A lot of times there are e-mail lists that are purchased for key procurement officials and try to pitch them some solutions through perhaps a monthly newsletter or some other new product information that you may want to send them.

Government agencies

__ __ within the US market, you have federal state and local governments.

Business-to-business marketing

__ __, business-to-business purchasing, also called procurement, involves the marketing of raw materials and commodities, components which are finished products on their own but they have limited if any value up until they are integrated in a bigger product or until they are assembled together to bring a complete solution to the end-user.

Modified rebuy

__ __, buyer would modify a product or service specifications or other aspects of the purchase. If it is a manufacturer that is adding a new product to its portfolio, sometimes an existing supplier may or may not have the capability to provide the components or the ingredients that are needed for that product. There is some slight variation that can come into play. Yes, they might still be selling or manufacturing food products, but adding a new type of a food flavor, if you will. That might require some modification in the type of ingredients that are being purchased. As a result of the process is a little bit more convoluted than the straight rebuy. Take the example of professional sports leagues. A lot of times they change the equipment that the athletes use for various reasons. One of those big reasons is the player safety.

industrial buyers

__ __, that includes manufacturers, construction, mining, then you have resellers, wholesalers, and retailers. A lot of times when we look at retailers, it's not just the department stores, it's a lot of these resellers are food service companies that will go out and purchase food and beverage products, and then add value to them or process them, and then resell it to their own customers.

instituitional buyers

__ __, whether these are healthcare facilities, whether these are financial institutions, educational institutions, or real-estate organizations.

Buying objectives

__ __. What are the buying objectives process improvement? Maybe they're trying to be more efficient. Maybe they want to streamline the processes. Maybe they want to reduce the cost. Maybe a key purpose of many B2B buying situations is regulatory compliance. Whether it is occupational safety, whether it is some other type of a regulation that they may have to comply with.

Personal selling and direct marketing

_____ is a hallmark of B2B markets as opposed to advertising, as opposed to running some sort of a social media campaign.

-raw materials/commodities -components -industrial equipment/machinery -finished goods (retail or food) -services (janitorial to IT)

business-to- business involves the marketing of:

-market structure -complex requirments -multiple suppliers & third parties -buying center -derived demand -personal selling & direct marketing

characteristics of b2b markets

buying center

typically, a cross functional group which may comprise individuals with varying purchase objectives & preferences.

outsourcing

we have a lot more __ of business activities on the part of B2B buyers because their focus is on their core competencies as opposed to a lot of the auxiliary functions and capabilities and services that are needed to bring their solutions to the market.