Badm 320 ch 7 - notes from online lecture PDF

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notes from online lecture...

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Business-to-business (B2B) marketing: refers to the process of buying and selling goods or services to be used in the production of other goods and services for consumption by the buying organization and/or resale by wholesalers and retailers - Derived demand: reflects the link between consumers’ demand for a company’s output and the company’s purchase of necessary inputs to manufacture or assemble that particular output - B2B firms focus on serving specific types of customer markets by creating value for those customers B2B Markets - Manufacturers and service providers - Manufacturers buy raw materials, components, and parts that allow them to make and market their own goods and ancillary services - Resellers: marketing intermediaries that resell manufactured products without significantly altering their form - Institutions - Purchase all kinds of goods and services - Public institutions also engage in B2B relationships to fulfill their needs for capital construction, equipment, supplies, food, and janitorial services - Government - In most countries, the central government is one of the largest purchasers of goods and services The business-to-business buying process - Stage 1: Need Recognition - The buying organization recognizes, through either internal or external sources, that it has an unfilled need - Sellers actively work to prompt such need recognition - Stage 2: product specification - Write a list of potential specifications that vendors might use to develop their proposals - Stage 3: RFP process - Request for proposals (RFP): organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications - The purchasing company can simply post its RFP needs on its website or work through various B2B web portals or inform its preferred vendors directly - Web portal: an internet site whose purpose is to be a major starting point for users when they connect to the web - For smaller companies who may lack the ability to attract broad attention to their requests

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Portals can provide tremendous cost savings because they eliminate periodic negotiations - Stage 4: Proposal analysis, vendor negotiation, and selection - The buying organization, in conjunction with its critical decision makers, evaluates all the proposals it receives in response to its RFP - Many firms narrow the process to a few suppliers, often those with which they have existing relationships, and discuss key terms of the sale - Stage 5: order specification - The firm places its order with its preferred supplier - The order includes a detailed description of the goods, prices, delivery dates, and occasionally, penalties for noncompliance - Supplier then acknowledges the order and fills it by the specified date - Stage 6: vendor performance assessment using metrics - Firms analyze their vendors’ performance so they can make decisions about their future purchases - Formal and objective analysis The buying center: ranges from employees who have a formal role in purchasing decisions to members of the design team who will specify the equipment or raw materials needed for employees who will be using a new machine that is on order - 6 roles - initiator: the person who suggests buying the particular product or service - Influencer: the person whose views influence other members of the buying center in making the final decision - Decider: the person who ultimately determines any part of or the entire buying decision - Buyer: the person who handles the paperwork of the actual purchase - User: the person who consumes or uses the product or service - Gatekeeper: the person who controls the information or access, or both, to decision makers and influencers - Organizational culture - The firm’s culture often comprises a set of unspoken guidelines that employees share with one another through various work situations - Autocratic buying center: even though there may be multiple participants, one person makes the decision alone - Democratic buying center: majority rules - Consultative buying centers: use one person to make a decision but solicit input from others before doing so - Consensus buying center: all members of the team must reach a collective agreement that they can support a particular purchase

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The buying situation - New buy situation: a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item - Modified rebuy situation: the buyer has purchased a similar product in the past but has decided to change some specifications - Current vendors are likely to have an advantage in acquiring the sale - Straight rebuy situation: occur when the buyer or buying organization simply buys additional units of products that had previously been purchased...