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Chapter 6

CHAPTER 6.pdf

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Department
Marketing
Course
MKT 100
Professor
Asif Salam
Semester
Fall

Description
CHAPTER 6: BUSINESS 2 BUSINESS MARKETING B2B Marketing B2B Markets  Manufacturers/Producers  buy raw mat. components/parts, manufacturre own goods  ResellersRetailer  Institutions  Government spends $240 billion on goods/services Differences btw/ B2B and B2C  Market Characteristics o Demand for business products is derived derived demand o Fewer customers, more geographically concentrated, orders are larger o Demand is more inelastic, fluctuates more frequently  Product Characteristics o Products technical in nature, purchase based on specifications o Mainly raw, semi-finished goods o Heavy emphasis on delivery time, technical assistance, after sale service, financing  Buying Process Characteristics o More complex o Competitive bidding, negotiated pricing, complex financial arrangements o Qualified, professional buyers, more formalized buying process o Buying criteria and objective specified o Multiple participants in purchase decisions o Reciprocal arrangements are common o Close long-term relationships o Online buying is common  Marketing Mix Characteristics o Direct selling/physical distribution often essential o Advertising more technical, promotions emphasize personal selling o Price often negotiated, inelastic, affected by trade/quantity discounts B2B Buying Process  Step 1: Need Recognition o Can be generated internally/externally o Sources for recognizing new needs (suppliers/salespeople/competitors)  Step 2: Product Specifications o Suppliers use to develop proposals o Can be done collaboratively w/ suppliers  Step 3: RFP Process o Buying organizations invite alternative suppliers to bid on supplying their req’d components o Post on website, contact suppliers directly  Step 4: Proposal Analysis/Supplier Selection o Several vendors neg
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