MKT 100 Lecture Notes - Lecture 3: Organizational Culture, Medical Device, North American Industry Classification System
4 Jul 2018
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Chapter 5 Business to business (B2B) marketing
B2B marketing is the process of buying and selling goods or services to be used in the
production of other goods and services, for consumption by the buying organization or
for resale by wholesalers and retailers
B2B marketing involves manufacturers, wholesalers, retailers and service firms that
market goods and services to other business but not to ultimate consumer
Distinction between b2b and b2c transaction is not product or service; the ultimate
purchaser and user of that product or service
B2B Markets
Focus their efforts on serving specific types of customer markets to create value for
those customers
Manufacturers or producers
Manufacturers buy raw materials, components, and parts that allow them to
manufacture their own goods
B2B companies are demanding, as a condition for doing business, that suppliers
demonstrate social responsibility by putting in place policies and practices to reduce
their carbon footprint
sustainable marketing explains how a small company saves money while improving its
corporate image as a socially responsible organization by implementing eco-friendly
printing technology
Resellers
are marketing intermediaries that resell manufacture products without significantly
altering their form
Institutions such as hospital, educational organizations, prisons, religious organization
and other non-profit organization also purchase all kinds of goods and services for the
people they serve
Public institutions engage in B2B relationships to fulfill their needs for capital
construction, equipment, supplies, food and janitorial services
Government
Central government tends to be one of the largest purchasers of goods and servers
Key challenges of reaching B2B clients
must master 3 key challenges for each business customer they want to serve
1) identify the right persons or decision makers within the organizations who can
authorize or influence purchases
2) markets must understand the buying person of each potential client
3) identify the factors that influence the buying process of potential clients
to address the complexity of B2B markets, companies have salespeople or a sales team
dedicated to specific clients
Differences between B2B and B2C markets
Market Characteristics
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in B2C markets, consumers buy goods to satisfy their own individual or household needs
and are heavily influenced by price, personal tastes, brand reputation or personal
recommendations of friends and family
in B2B markets, demands for good and services is often derived from B2C sales in the
same supply chain
derived demand is the linkage between consumers demand for a company’s output and
its purchase of necessary inputs to manufacture or assemble that particular output
Market characteristics: demand for business products is derived, fluctuates more and
more, fewer customers, more geographically concentrated and orders are larger,
demand is more inelastic
Product characteristic: products are technical in nature and purchased based on
specifications, mainly raw and semi-finished goods are purchased, heavy emphasis is
placed on delivery time, technical assistance, after-sale service, and financing assistance
Buying process characterises: buying decision is more complex, buying may involve
competitive bidding, negotiate pricing and complex financial arrangements, buying
involves qualified, professional buyers who follow a more formalized buying process,
buying criteria and objective are specified, as are the producers for evaluating and
selecting vendors and products, multiple people with varied interest participate in
purchase decisions, online buying over the internet is common
Marketing mix characterises: direct selling is the primarily form of selling and physical
distribution is often essential, advertising is technical in nature and promotions
emphasize personal selling, price is often negotiated, inelastic, frequently affected by
trade and quantity discounts
Product characterises
Products ordered are primarily raw materials and semi-finished goods that are processed or
assembled into finished good for ultimate consumers
Technical services and financing assistance are important aspects of B2B buying behaviour
B2C markets, consumer buy finished goods for their own personal consumption
Buying processes characteristics
For routine purchases or small dollar value purchases, only one or a few individuals
within a department or the company may be responsible for the buying decision
Purchases of highly technical or complex products involving thousands or millions of
dollars, buying effort is more structured, formalized, and professional
More people are usually involved in complex buying decisions
Usually trained and qualified professional and they represent different interest
Group of people involved in the buying decision is often referred to as the buying entre
Major diff between b2b and b2c buying lies in the nature of the relationship between
firm and suppliers
In b2b markets, buyers and sellers strive to develop close relationships with each other
so will often provide help or advice to ensure a win - win situation for both parties
Some firms may engage in reciprocal buying arrangements- practice where two firms
agree to buy each other’s products and services
Marketing mix characteristics
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find more resources at oneclass.com
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Document Summary
B2b marketing is the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization or for resale by wholesalers and retailers. B2b marketing involves manufacturers, wholesalers, retailers and service firms that market goods and services to other business but not to ultimate consumer. Distinction between b2b and b2c transaction is not product or service; the ultimate purchaser and user of that product or service. Focus their efforts on serving specific types of customer markets to create value for those customers. Manufacturers buy raw materials, components, and parts that allow them to manufacture their own goods. Resellers are marketing intermediaries that resell manufacture products without significantly altering their form. Institutions such as hospital, educational organizations, prisons, religious organization and other non-profit organization also purchase all kinds of goods and services for the people they serve.
