CHAPTER 6: BUSINESS 2 BUSINESS MARKETING
B2B Marketing
B2B Markets
Manufacturers/Producers buy raw mat. components/parts, manufacturre own goods
ResellersRetailer
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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