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Business to Business Marketing. Professor Lawrence Feick University of Pittsburgh. Organizational markets compared to consumer markets . Fewer buyers Larger purchases Derived demand. Organizational markets compared to consumer markets (continued). Differences in the purchasing process

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Business to business marketing

Business to Business Marketing

Professor Lawrence Feick

University of Pittsburgh


Organizational markets compared to consumer markets
Organizational markets compared to consumer markets

  • Fewer buyers

  • Larger purchases

  • Derived demand


Organizational markets compared to consumer markets continued
Organizational markets compared to consumer markets (continued)

  • Differences in the purchasing process

    • professional buying

    • the buying center

    • buyclass


Organizational buying process
Organizational Buying Process

Obtain Feedback and Evaluate Performance

Select Order Routine

Evaluate Proposals and Select Supplier

Acquire and Analyze Proposals

Search for and Qualify Sources

Describe Characteristics and Quantity

Determine Characteristics and Quantity

Recognize Problem and General Solution


The buying center
The Buying Center

  • Participants in an organization’s buying decision


The buying center1
The Buying Center

G

A

T

E

K

E

E

P

E

R

S

BUYERS

DECIDERS

INFLUENCERS

USERS


Organizational buyclasses
Organizational buyclasses

  • Straight rebuy

  • Modified rebuy

  • New task purchase


Figure 9.9a

Chrysler’s Vendor Analysis Form

Supplier Rating Chart: Commodity:__________

Supplier Name:__________ Annual Sales Dollars:__________

Shipping Location:__________

5 4 3 2 1 0

Ex. Good Sat. Fair Poor N/A

Quality 40%

Supplier defect rates ___ ___ ___ ___ ___ ___

SQA program conformance ___ ___ ___ ___ ___ ___

Sample approval performance ___ ___ ___ ___ ___ ___

Responsiveness to quality problems ___ ___ ___ ___ ___ ___

Overall quality rating ___ ___ ___ ___ ___ ___

Delivery 25%

Avoidance of late or overshipments ___ ___ ___ ___ ___ ___

Ability to expand production capacity ___ ___ ___ ___ ___ ___

Engineering sample delivery performance ___ ___ ___ ___ ___ ___

Response to fluctuating supply demands ___ ___ ___ ___ ___ ___

Overall delivery rating ___ ___ ___ ___ ___ ___


Figure 9.9b

Chrysler’s Vendor Analysis Form

5 4 3 2 1 0

Ex. Good Sat. Fair Poor N/A

Price 25%

Price competitiveness ___ ___ ___ ___ ___ ___

Absorption of economic price increases ___ ___ ___ ___ ___ ___

Submission of cost savings plans ___ ___ ___ ___ ___ ___

Payment terms ___ ___ ___ ___ ___ ___

Overall price rating ___ ___ ___ ___ ___ ___

Technology 10%

State-of-the-art component technology ___ ___ ___ ___ ___ ___

Sharing research development capability ___ ___ ___ ___ ___ ___

Capable and willing to provide circuit

design services ___ ___ ___ ___ ___ ___

Responsiveness to engineering problems ___ ___ ___ ___ ___ ___

Overall technology rating ___ ___ ___ ___ ___ ___

Buyer:__________ Date:__________

Comments:_______________________________________________________


Summary comparing business to business marketing and consumer marketing text table 9 2

Product

Relatively technical, exact form often variable, accompanying services very important

Standardized form, service important but less than for business products

Price

Competitive bidding for unique items, list prices for standard items

List prices, little individual negotiation

Promotion

Emphasis on personal selling

Emphasis on advertising

Summary: comparing business to business marketing and consumer marketing (text: Table 9.2)

Business-to-Business Marketing

Consumer-Goods Marketing


Summary comparing business to business marketing and consumer marketing continued

Distribution

Relatively short, direct channels to market

Often complex channels with multiple intermediaries

Customer relations

Relatively enduring and complex

Usually transaction-focused; relationship of relatively short duration

Decision-making process

Involvement of diverse group of organization members in decision

Individual or household members make decision

Summary: comparing business to business marketing and consumer marketing (continued)

Business-to-Business Marketing

Consumer-Goods Marketing

Source: Based on Michael Hutt and Thomas Speh, Business Marketing Management, 5th ed. (Fort Worth, Tex: The Dryden Press, 1995), pp. 11-13.


Implications
Implications

  • Importance of relationships

  • Importance of personal selling

  • Understanding our customer’s customers

  • Affecting final consumer demand

  • Solving our customers’ business problems


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