CHAPTER 7 BUSINESSTOBUSINESS MARKETING 7 1 BusinesstoBusiness Marketing

CHAPTER 7 BUSINESS-TOBUSINESS MARKETING 7 -1

Business-to-Business Marketing LEARNING OBJECTIVES LO 1 Describe the ways in which business-tobusiness (B 2 B) firms segment their markets. LO 2 List the steps in the B 2 B buying process. LO 3 LO 4 LO 5 Identify the different roles within the buying center. Describe the different types of organizational cultures. Detail different buying situations. 7 -2

B 2 B Markets Resellers Manufacturers/ Service providers B 2 B Markets Institutions Government U. S. Census 7 -3

Manufacturers and Service Providers Buy raw materials, components or parts Manufacture their own goods Car Culture/Getty Images Gear Expo News Clip 7 -4

Resellers Manufacturer Reseller Retailer Courtesy Eastman Chemical Company 7 -5

Institutions Schools, Museums and Religious Organizations Royalty-Free/CORBIS Annie Reynolds/Photo. Link/Getty Images Royalty-Free/CORBIS 7 -6

§ State and local governments also make significant purchases § Firms specialize in selling to government Hisham F Ibrahim/Getty Images § US Government spends $2. 1 trillion procuring goods Getty Images Government 7 -7

Check Yourself 1. What are the various B 2 B markets? 7 -8

B 2 B Buying Process Need recognition Product specification RFP process Proposal analysis and supplier selection Order specification Vendor/ performance assessment using metrics 7 -9

Stage 1: Need Recognition § Sources for recognizing new needs: Times Photo by Toni L Sandys/Newscom § Can be generated internally or externally § Salespeople § Competitors Sylvain Grandadam/The Image Bank/Getty Images § Suppliers 7 -10

Stage 2: Product Specifications Royalty-Free/CORBIS § Used by Suppliers to develop proposals § Can be done collaboratively with suppliers 7 -11

Stage 3: RFP Process (Request for Proposal) ©Toyota Motor Engineering & Manufacturing North America, Inc. Federal Business Opportunities Website 7 -12

Step 4: Proposal Analysis, Vendor Negotiation and Selection § Often several vendors are negotiating against each other § Considerations other than price play a role in final selection Courtesy The Goodyear Tire & Rubber Company 7 -13

Step 5: Order Specification § Firm places the order § The exact details of the purchase are specified § All terms are detailed including payment Digital Vision/Getty Images 7 -14

Step 6: Vendor Performance Assessment Using Metrics (2) Importance Score (3) Vendor’s Performance (4) Importance x Performance (2) x (3) Customer Service . 40 5 2. 0 Issue Resolution . 20 4 0. 8 Delivery . 10 5 0. 5 Quality . 30 3 0. 9 Total 1. 00 (1) Key Issues 4. 2 7 -15

Check Yourself 1. Identify the stages in the B 2 B buying process. 2. How do you perform a vendor analysis? 7 -16

The Buying Center Influencer Initiator Decider Buying center Gatekeeper Buyer User 7 -17

Organizational Culture Democratic Autocratic Buying culture Consultative Consensus 7 -18

Buying Situations New buy Buying situations Modified rebuy Straight rebuy 7 -19

CHECK YOURSELF 1. What factors affect the B 2 B buying process? 2. What are the six different buying roles? 3. What is the difference between new buy, rebuy, and modified rebuy? 7 -20