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INTRODUCTION

TO
B2B
BY :-
Th ree Th eore tica l P ersp ectiv es
Conventional marketing
• Need for integration of b2b marketing and
supply
chain management theories
• Network Perspective
• Strategic partnership
• Social construction
• Relationship marketing
• Buyer-Seller interactions
Dominant Characteristics of the Conventional
Approach to B2B Marketing
Vendor-focused
• Transaction-oriented
– Complexity of purchase decisions
– Frequency of purchases
– Volume
– Product service range
Auctions
Standardized products
Known technology
Standardized quality measures
• High volume
• High frequency of usage
• Price as important marketing parameter
The Purchaser Perspective to B2B
Marketing
Purchasing officers have different
profiles
and do not think like sales people
– Strategic Importance of the
product/solution
– Cost savings vs. Solution enhancing
purchases
• Firm size influences purchasing
behaviour
Product Value Analysis
• Does the use of the item contribute value?
• Is its cost proportionate to its usefulness?
• Does it need all its features?
• Is there anything better foor its intended use?
• Can a usable part be made by a lower-cost
method?
• Can a standard product be found that will be
usable?
• Is the product made on proper tooling,
considering the
quantities that are used?
• Will another dependable supplier provide it for
Key F eature s of B2B Pr odu cts
• Fewer users and larger purchases
• Derived demand - esp. for raw materials and
components
• Fluctuating demand – 10% change in consumer
demand
can lead to more than 10% change in the demand
for inputs
• Rational buying decision process
– quality, --- technical, perceived
– dependability
– performance and service
Classification of Organizational Buyers

Producers
– Manufacturers
– Service firms
• Intermediate customers
• Public Sectors
– Institutions
– Projects
• Non-Government Organisations
Key Ch arac teris ti cs o f Bu si ness t o
Bu si nes s Cu st ome rs
• Use other peoples’ money
• Professional buyers – usually rational
• Collective decison process - buying
centre
• Key managers are usually involved
• Relatively fewer in number
• Purchases are usually substantial in
volume and
value
International Dimensions of Business to
Business Marketing
Transnationality of Business Activities
• Growing need for cross-national inter-firm
collaborative
arrangements
– Contract Production
– Out-sourcing of inputs
– Strategic Alliances
• Increasing demand for technology capacity
enhancement
packages in the emerging market economies
• Governments and international organizations as
target markets
Conventional Concepts and Models in
B2B Marketing
• The Buy Grid Model – Consists of 3
dimensions
• Buy Situation
– New task
– Modified Rebuy
– Straight rebuy
• Buying Phases
• Buying Centre
Two Dimensions of the Buygrid Model

Task dimensions of the model


• Buying situations/tasks,
• Buying phases
• Buying centre
• Non-task dimensions
• The individual
• The group
• Organisation
Buying Phases
• Problem recognition
• General need description
• Product/service specification
• Supplier search
• Proposal solicitation
• Supplier selection
• Order-routine specification
• Performance Review
Role of the Buying Centre
• Users
• Influencers
– Define specifications and provide information for evaluating
alternatives
• Deciders
– Decide on product requirements and/or on suppliers
• Approvers
– Authorise proposed action
• Buyers
– Selects suppliers and arranges terms of purchase
• Gatekeepers
– Prevents information from reaching members of the buying
centre
Contribution to Purchase Decisions by
Buying Centre Members
• Who originates the initial decision?
• Who surveys alternatives and determines the basic
characteristics of the
product required?
• Who identifies potential suppliers?
• Who collects tenders/information from suppliers?
• Who evaluates products offered?
• Who authorises the purchase?
• Who finally chooses the supplier?
• Who monitors and evaluates the performance of both the product
and the
supplier?
• Who is most likely to initiate decisions to change supplier?
• Who finally decides on a change in supplier and selects the new
supplier?
Buying Centre Analysis
• Buying centre members selectively
participate in
purchasing decision processes
• They have different choice criteria
• They possess different levels of purchase
knowledge
• Their degree of involvement shift with the
phases of the
buying process
• Their influence and authority shift from one
buying
Strategic Implications of Buying Centre
Analysis
• Identification of key decision-makers/influencers at
each
stage of the purchase decision process.
• Assessment of buying centre members' decision
variables
• Assessment of buying centre members' information
about/
attitude to one's firm and competitors
• Reinforcing positive opinion about one's firm
• Legitimacy-seeking strategies
• Reduce uncertainty about the expected quality of
one's performance.
– endorsement tactics,
International Perspectives on the
Buy Grid Model
• Countries differ in terms of their notions of logic
and
decision making procedures
• Countries differ in terms of their degree of
uncertainty
avoidance
• Countries differ in terms of their degree of
individualism
and consensus seeking
• Countries and organisations differ in terms of
respect for
Some Stra tegic Implica tio ns
• Influence those whose money is being used
(e.g. voters)
• Adoption of customer retention strategies
• Customized/Direct Marketing – E.g. Internet
• Long term marketing strategies
• Combination of rational arguments and
persuasive
negotiation
• Stimulating demand for potential customer
products
• Send high powered salespeople
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