B2B Marketing Slide 2b

B2B MARKETING
The Business
Market:
Perspectives on
the Organizational
Buyer
1. The nature and central characteristics of each
market sector.
2. How the purchasing function is organized in
each sector.
Session Objectives 3. The dramatic role that online purchasing
assumes in the business market.
4. The need to design a unique marketing
program for each sector in the business market.
Eight stage model of the
organizational buying process
Problem recognition
Determine product dimensions and quantity
Precise description of product characteristics
Search and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and supplier selection
Selection of an order routine
Performance feedback and evaluation

Commercial Enterprises
• Although only a small percentage (<10%)

Number of of US manufacturers employ over 100
Manufacturers workers, these few firms account for most
manufactured products.
• Serve fewer but larger customers

Business compared to consumer product
Marketers marketers. They may tailor marketing
strategies for each large customer.
Small • Represent a dominant market segment,

but are difficult to serve due to their
Businesses diverse needs and limited buying power.
• Manufacturers are concentrated in

Geographical specific regions, requiring focused
Concentration marketing efforts and strategic
distribution centers.
New Task
• Firm has no experience in purchasing the
product; requires extensive problem solving
• Strong predispositions toward suppliers do
not exist
• Two distinct buying decision approaches are
employed
o Judgmental new task: when unfamiliar
with parts, technology, etc.
o Strategic new task: when decision is
extremely important to the firm
New Task
Information needs are low; little need to
evaluate alternative solutions
Routinized response behavior; selection of
vendor from a list of acceptable vendors
Choice criteria are well developed
Strong predisposition to certain suppliers
Purchasing Goals
Uninterrupted flow of MRO&S
Inventory management
Quality improvement
Supplier relationship development
Cost reduction
Administrative cost efficiency
Competitive advantage through supply chain management

Segmenting Purchase
• Leading firms segment purchases based on:
o Procurement complexity: Technical complexity,
supply chain coordination, and life cycle costs.
o Revenue impact/business risk: Impact on
customer perceptions of value.
• This helps identify purchases with the greatest
effect on revenue or risk.
• Business marketers should assess their offerings'
position within a customer's purchasing portfolio.
• The most profitable opportunities lie in strategic
purchases with high revenue and customer value
impact.
E-Procurement
• E-procurement is the use of online tools
and platforms to streamline and improve
purchasing processes.
• It enables efficient information exchange,
process automation, and data-driven
decision-making.
• E-procurement software examples include
Ariba, Emptoris, and Oracle.
\
Capabilities of E-procurement
• Online negotiations: Buyers can request
proposals (RFPs), quotes (RFQs), or information
(RFIs) and conduct reverse auctions.
• Collaboration tools: Facilitate internal
collaboration for defining purchase
specifications and communication with
suppliers through RFPs.
• Knowledge management: Provides a central
repository of supplier performance data, cost
information, and best practices.
\
• Analytical tools: Support detailed analysis of
purchasing costs and overall spending across
the organization.
Benefits of E-procurements
• Material cost savings: Up to 14% according to
studies.
• Process efficiency: Can cut purchasing cycle
time in half.
• Reduced administrative costs: Up to 60%
according to studies.
• Enhanced ability to identify new suppliers:
Enables global sourcing opportunities.
\
Government Sector
• E-government: Governments use online platforms to improve
accessibility, efficiency, and service delivery. This creates opportunities
for businesses selling technology products and services. (See Figure 2.4)
• Government purchasing is complex:
o Involves many influences beyond the originating agency.
o Affected by social programs like compliance, set-asides, and minority
subcontracting.
o Governed by laws and contractual guidelines.
o Requires understanding different contract types:
o Fixed-price: Agreed price upfront, full payment upon delivery.
o Cost-reimbursement: Reimbursement for allowable costs + profit.
o Incentive: Rewards for below-target costs, penalties for exceeding
them.
Government Sector
• Procurement methods:
o Formal advertising (open bid): Lowest bidder wins for standardized
products.
o Negotiated contract: Used for complex products, services, or few
suppliers.
Institution Sector
• Diversity: The institutional market is highly diverse, with buyers ranging from small
hospitals to large universities. Each buyer has different needs and purchasing processes.
• Example: Hospitals may have purchasing agents, committees, or outsourced operations.
• Budgetary Pressures: Institutions often aim to use their entire budget and may purchase
based on available funds.
• Outsourcing: Many institutions outsource operations like food service to improve
efficiency.
• Multiple Buying Influences: Both professional staff (doctors, professors) and purchasing
departments can influence buying decisions.
• Targeted Strategies: Business marketers need to cater to both sets of influencers.
• E-commerce: Leading companies like GE Healthcare use online platforms to offer value to
customers.
• Group Purchasing: Hospitals, schools, and universities join cooperatives to leverage bulk
discounts.
Institution Sector
• Challenges for Marketers:
o Develop strategies for individual institutions and cooperative groups.
o Consider discount pricing and efficient distribution for group purchases.
o Respond individually to institutions despite contracts with cooperatives.
• Institutional Purchasing Practices: similar to large commercial firms in some ways, but with
differences:
o Cooperative buying preferences.
o Local vendor preferences.
o Delegation of purchasing responsibility for specific items

B2B Marketing Slide 2b

Uploaded by

Copyright:

Available Formats

B2B Marketing Slide 2b

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

B2B Marketing Slide 2b

Uploaded by

Copyright:

Available Formats

B2B MARKETING

Determine product dimensions and quantity

Precise description of product characteristics

Search and qualification of potential sources

Acquisition and analysis of proposals

Evaluation of proposals and supplier selection

Selection of an order routine

Performance feedback and evaluation

• Although only a small percentage (<10%)

• Serve fewer but larger customers

Small • Represent a dominant market segment,

• Manufacturers are concentrated in

Supplier relationship development

Administrative cost efficiency

Competitive advantage through supply chain management

You might also like