Business 2 business marketing

Business markets have grown significantly in size and scope in recent times in developed economies

Business markets in order to succeed needs to be fully abreast of

Market structure and demand Nature of buying units Types of decision The decision process involved

Relationship marketing
Developing long term relations Cost effective Mutually beneficial relationship with customers (could bring out desired result for the business in the days ahead)

Organizational buying is the decision making process by which formal organization establish the need for

Purchasing products and services Identify Evaluate and choose amongst alternative brands and suppliers

Business mkt consist of all the orgnl that acquire goods and services used in the production of others products and services that are sold,rented or supplied to others

As compared to consumer market ,business market generally have fewer and larger buyers,a closer customer-supplier relationship &more geographically concentrated buyers

Demand in the business market is derived from demand in the consumer market and fluctuates with the business cycle

Business market needs to be aware of:

The

role of professional purchasers & their influences. The need for multiple sales calls Importance of direct purchasing reciprocity and leasing

The buyers center is the decision-making unit of a buying organisation. It consists of:
Initiators Users Influencers Deciders Approvers Buyers gatekeepers

To influence these parties, marketers must be aware of;

Environmental Organizational Interpersonal Individual factors

The buying process consists of eight stages called Buy-stages

Problem recognition General need description Product specification Suppliers search Proposal solicitation Suppliers selection Order routine specification Performance review

Problem recognition

The buy process begins when someone in the company recognizes a problem or need that can be met by acquiring a good or a service The recognizion can be triggered by internal or external stimuili

General need description

( for complex items)the buyers will work with
other engineers user- to define characteristics like

(for standard item's) the buyers determine the

needed item's general characteristic Reliability Durability or price Business marketers can help by describing how their products meet or even exceed the buyers needs

Product specification

Product value analysis(p.v.a) is an approach to cost reduction In which component are studied to determine if they can be redesigned or standardized or made by cheaper methods of production The pva team will examine the high-cost components in a given products

Suppliers search

The buyers tries to identify the most appropriate suppliers through

TRADE DIRECTORIES CONTACT WITH OTHER COMPANIES. TRADE ADVERTISEMENT AND TRADE SHOWS Business marketers also put products ,prices and other information on the internet The move to internet purchasing has far reaching implication for suppliers and will change the shape of purchasing for years to come

e-procurement(web sites are organized around

two types of e-hub)

Vertical hub centered around plastics,steel,chemical.papers Functional hubs logistics,media buyers,advertising,energy mngt

Cond..
Direct extranet links supplied by the company to its major suppliers Buying alliances Several companies joined forces to form a buying alliance called Transora

Transora

It is to use their combined leverage to obtain lower prices for raw material They also share data on less expensive ways to ship products and track inventory Companys buying sites (R.F.Ps ) request for proposal rade process network through increased negotiations terms and place orders

Proposal solicitation

The buyers invites qualified suppliers to submit proposals

If the item is complex or expensive the buyers will require a detail written proposal(qualified suppliers)
After evaluating the proposals,the buyers will invite a few suppliers to make formal presentation Business marketers must be skilled in researching, written and presentation proposals Written proposals should be marketing documents that describes value and benefits in customer terms Oral presenation should inspire confidence and position the companys capability and resources so that they stand out from the competition

Suppliers selection

Before selecting a supplier a buying center will specify desired supplier attributes and indicate their relative importance Business marketers need to do a better job of understanding how business buyers arrive at the valuation The choice and importance of different attributes varies with he type of buying situation,delivery,reliability, price and suppliers reputation are important for routine- order products

For procedural problem product, such as a copying machine, the three most important attribute are

Technical services Suppliers flexibility Product reliability

For political problem product that stir rivalry in the organizational (such as he choice of a computer system) the most important attributes are

Price suppliers reputation product reliability service reliability supplier repuation

Order routine-specification
After selecting the buyers negotiates he final order,listing the technical specification he quality needed, the expected time of delivery return policies, warranties and so on Many industrial buyers lease heavy equipment like machinery and trucks The lessee gains a number of advantages Conserving capital, getting the latest product, receiving beer services & some tax advantage

Cont..

He lessor often ends up with a larger net income and the chance to sell to customers who could no afford outright purchase In case of maintenance repair and operating items, buyers are moving towards blanket contracts rather than periodic purchase order A blanket contract establishes a long term relationship in which the suppliers promises to resupply the buyers as needed a agreed upon prices over a specific period of time because he stock is held by the seller blanket contract are sometimes called stockless purchase plans

The buyers become dissatisfied with the in suppliers ,price, quality or service

Companies that fear a shortage of key material are willing to buy and hold large with suppliers to ensure a steady flow of materials He business marketers are using the internet to set up extranet with important customers to facilitate the lower cost of transaction He customers enter order directly on the computer and these order are automatically transmitted to the suppliers

Some companies go further and shift the ordering responsibility to their suppliers in system called vendor manage inventory

These suppliers are privy o he customers inventory level and take responsibility to replenish,it automatically hrough continuous replenishment programmes
OTIFINE(summarises the desirable outcome of b2b tranction)

OT- delivery on time IF-in full NE- no errors

Performance review(the buyers

periodically reviews the performance of the chosen suppliers)

Three methods are commonly used The buyers may contact the end users and ask for the evaluation, the buyers may rate the suppliers on several criteria using a weighted score method or buyers might aggregate the cost of poor performance to come up with adjusted costs of purchase including price

The performance review may lead the buyer to continue,modify or end a suppliers relationship Many companies have set up incentive systems to reward purchasing managers for goods buying performance in much the same way that sales personnel's receives bonuses for good selling performance These system are leading purchasing managers to increase pressure on sellers for he best term

Business marketers must form strong bonds And relationship with their customers and provide them with their customers and provide them with their customers and provide hem added value some customers ,however may prefer more of a transactional relationship The institutional market consists of schools, hospitals ,nursing homes ,prisons and other institutional hat provide goods and services to people in their case

Buyers for government organizations tend o require a great deal of paperwork from their vendors and to favour open bidding and domestic companies,suppliers must be prepared to adopt their offers to the special needs and procedures found in institutional and government market

B2b marketing in india

The business market is defined to include organization that buy good and services,for use in the production of other product and serve that are sold,rented and supplied to others The full B2B market includes government purchase
quasi-government operation, commercial enterpriseNgo's hospitals,charities,resellers and other bodies and institutes engaged in purchase of physical goods and service

Factors which makes a difference in b2b mkt

Internal factors External factors

ENVIRONMENTAL FACTORS

Internal factors

Interdepartmental and crossfunctional co-ordination wider management responsibilities closer link between marketing strategies and corporate strategy

External factors

More rational decision -making Concentrated customer base Several buying influence and location Communication of benefits Direct purchasing Close suppliers-customer relation

Environmental factors
Technology Demand issues Value proposition distinctive measurable sustainable

Customer relationship

Know your customer well