Chapter Six
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.



Understand the characteristics of businessto-business markets, B2B market demand,
and how marketers classify B2B customers
Appreciate opportunities for using ecommerce and social media in business-tobusiness settings
Identify and describe the different business
buying situations and the business buying
decision process
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

Business-to-business marketing The marketing of goods and services that
businesses and other organizations buy for
purposes other than personal consumption
◦ Business-to-business (organizational)
markets include manufacturers,
wholesalers, retailers, and other
organizations such as hospitals, and
government
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

Business markets differ from consumer
markets in several ways:
◦ Multiple buyers are involved
◦ Fewer organizational customers exist
◦ Order quantities and cost are much larger
◦ Business customers are more
geographically concentration

These differences make B2B marketing
more complex
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.


Business-to-business demand differs from
consumer product demand
Demand is:
◦ Derived
◦ Inelastic
◦ Fluctuating
◦ Joint
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.


Derived demand:
◦ Demand for organizational products is
caused by demand for consumer goods
◦ Changes in consumer trends can impact
B2B sales
Inelastic demand:
◦ Changes in price have little or no effect on
the amount demanded
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.


Fluctuating demand:
◦ Small changes in consumer demand create
large increases or decreases in business
demand
◦ Life expectancy of the product can cause
fluctuating demand
Joint demand:
◦ Demand occurs for two or more goods
that are used together to create a product
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.


Producers:
◦ Individuals or firms that purchase
products for use in the production of
other goods and services
 Example: Dell buys RAM chips for
integration into their PCs
Resellers:
◦ Individuals or firms that buy finished
goods for reselling, renting, or leasing
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

Organizations: Government markets:

Organizations: Not-for-profit firms:
◦ Federal, state, county, and local governments
that buy goods and services to carry out
public objectives, and support their
operations
◦ Organizations with charitable, educational,
community, and other public service goals
that buy goods and services to support their
functions and to attract and serve their
members
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.


Marketers use the North American Industry
Classification System (NAICS) to identify
their customers and to find new customers
NAICS is a numerical coding of industries in
the United States, Canada, and Mexico
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

B2B E-Commerce
Internet exchanges between two or more
businesses:
◦ Includes exchanges of information, products,
services, and payments
◦ Allows business marketers to link to
suppliers, factories, distributors, and their
customers
◦ B2B Internet site provides technical support,
item and order status information, and
customer service
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.



Intranets:
◦ Link a firms’ departments, employees, and
databases
Extranets:
◦ Allow authorized suppliers, customers,
and other outsiders to access the firm’s
intranet
Private exchanges:
◦ Link an invited group of suppliers and
partners over the Web
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.



Hackers threaten security:
◦ Customer credit card number theft
◦ May destroy firm records or steal trade
secrets
◦ Authenticating transactions is critical
Well-meaning employees can be security
threats
Firewalls and encryption safeguard
e-commerce transactions
`
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.



Games generate buzz and drive brand
awareness
B2B marketers use social networking sites
to promote themselves
Linked in is the most prominent social
networking site for B2B marketers and
offers several advantages
http://www.youtube.com/watch?v=QzZyUaQvpdc&feature=related
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.


Buy class framework
◦ Identifies the degree of effort a firm needs
to collect information and make a decision
Three buy classes:
◦ Straight re-buy
◦ Modified re-buy
◦ New-task buy
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

Trained professional buyers typically carry
out buying in business-to-business
markets:
◦
◦
◦
Purchasing agents
Procurement officers
Directors of materials
management
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

The group of people in an organization who
participate in a buying decision:
◦
◦
◦
◦
◦
◦
Initiator
User
Gatekeeper
Influencer
Decider
Buyer
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.


Factors prompting recognition:
◦ Vary by buying situation
Actions resulting from problem recognition:
◦ Initiation of a purchase requisition or
request
◦ Formation of a buying center, if needed
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

In this stage, buying center members:
◦ Search for info about products and suppliers
 Marketers must provide information where and
when business buyers need it
◦ Develop product specifications
 Written descriptions of the quality, size, weight,
color of the item to be purchased
◦ Identify potential suppliers/obtain proposals (bids)
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

The buying center assesses proposals:
◦ Price is a primary consideration
◦ Other factors may be considered, such as
extra services or other perks
◦ Customer reference programs, product
demos, and presentations can help sell
the marketer’s products to firms
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.



Single sourcing:
◦ Business practice of buying a particular
product from only one supplier
Multiple sourcing:
◦ Buying from several different suppliers
Reciprocity:
◦ Trading partnership in which two firms
agree to buy from one another
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.



Outsourcing:
◦ Obtaining vendors to provide goods /
services that might otherwise be supplied
in-house
Crowd-sourcing:
◦ Pulling together expertise from around the
globe to work on solving a problem
Reverse marketing:
◦ Buyers try to find capable suppliers and
“sell” their purchase to the suppliers
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

Organizational buyers assess whether the
performance of the product and the
supplier live up to expectations:
◦ Users are surveyed to determine
satisfaction
◦ Producers may also research ultimate
consumer satisfaction with the final
product
◦ Changes in demand are analyzed
◦ Supplier performance is documented
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

Metrics used by organizational buyers:
◦ Satisfaction
◦ Quality
◦ Customer engagement
◦ Purchase intentions
◦ Promptness and effectiveness
of problem resolution
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.