Marketing Management Chapter 5: B2B
End User purchases
(e.g., ERAU purchases computers) Capital Equipment Materials, Repairs and Operational (MRO)
Buying Center
A number of individuals with a stake in the purchase decision come together to form a ___. It is VIRTUAL.
Geographic Concentration
Business markets tend to concentrate in certain locations. Technology in Silicon Valley. As a result, their suppliers congregated nearby
Define the need and product specification
Request for proposal (RFP) putting product specifications into a document for distribution
Players in B2B
Resellers Government Institutions
Organizational factor
Risk Tolerance
Fluctuating
Small changes in consumer demand can lead to considerable shifts in business product demand
Number and Size of Customers
The large size and small number of customers place a higher value on each customer
Relationship with Customers
The nature of business markets requires a more personal relationship between buyer and seller
Members of the buying center
User Initiators Influencers Gatekeepers Deciders
Pursuing the buying center
Who is part of the buying center? Who are the most significant influencers? What are the decision criteria for evaluating the various product options = BUYING CENTER TARGET MARKET
Users
are the actual consumer of the product
Seek sales proposals in response to RFP
are written so they can be studied and sent to various individuals inside the company
Personal Factors
refers to needs desires and objectives of those involved in the purchase decision
Institutions
such as non profits, hospitals, and other nongovernment organizations (NGO)
Problem recognition
triggered when identifies a need
Post Purchase Evaluation of Product and Supplier
Assess product performance Consider the level of support provided by seller Expect follow up after sale
Complexity of Buying Process
B2B takes longer and involves more people, making the seller's job more challenging
Resellers
Companies that buy products and then resell them to other businesses or consumers
Straight Rebuy
Companies use a wide range of products on a consistent basis (office supplies, raw materials) and simply reorder when needed.
Gatekeeper
Controls access to key participants in the process
Most fundamental criterion in vendor selection is _____
Reliability
Initiator
Could be user or executive who starts the process
Search for suppliers
Create a list of preferred or approved suppliers or identify potential suppliers
Derived
Demand for B2B products originates from the demand for consumer products
Demand for Products and Services
Derived from consumer demand, fluctuates with changes to consumer demand, and more inelastic (price sensitive).
Complexity of the supply chain
Direct from supplier to manufacturer.
Make purchase decision
Financial Criteria + Value Criteria + Service Criteria = Product Choice
Influencer
Individuals in and out of company that affect decision making
Government
Local, state, and federal gov't have unique and frequently challenging purchase practices
NAICS
North American Industrial Classification System. The system has been expanded to include businesses in Mexico and Canada. Six-Digit Hierarchal Code
Manufacturers
Original equipment manufacturer (OEM) End User purchases
Decider
Person(s) responsible for making final decision
Inelastic
changes in demand are not significantly affected by changes in price. ex Apple will not buy more Intel if intel lowers the price
New Purchase
is the purchase of a product or service by a customer for the first time
Supplier choice
multiple sellers will be offering the same product or very similar product configurations. As a result supplier qualifications become part of the purchase decision
Modified Rebuy
occurs when the customer is familiar with the product and supplier but is looking for additional information
Model of Business market purchase decision process
problem recognition define the need and product specifications search for suppliers seek sales proposal-response to rfp make the purchase decision post-purchase decision