Transcript 7 Business Buying Behavior

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Business Marketing
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Business Marketing
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Organization market is larger than consumer
market (B2B marketing/industrial marketing)
Easy to define need: do not have the “less
rational” needs of consumers (fewer
customers)
Organizations purchase for:
1. Resale
2. Use in business
3. Or to produce other items
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B2B internet marketing is huge
(disintermediation)
Internet B2B Trends
Relationship Marketing
• Decrease in costs: changes in traditional
relationship (long-term interaction, not just
1 transaction)
– Cooperation (strategic alliances):
• Mutual goals (still difficult; why Japanese
experience during troubled times)
– Info. Sharing:
• Provide data to enhance decisions (web – Dell)
• Potential for abuse (GM sends specs to others)
– Keiretsu
Relationship Commitment
• Adaptations:
– Make changes for one customer (NUMMI;
McDonald’s & China potatoes)
– May hedge bets with multiple suppliers
• Operational linkages (outsourcing: train
other jobs; IBM)
– Ties with internal processes (place people in
plants)
– Allows better coordination (Mark @ VSU,
windshields, Rubbermaid)
McDonald’s in Saudi Arabia
Legal Bonds
• Firestone-Ford, Maytag-Hoover, B2C, over
$150, 2 round trip tickets 200,000)
– Formalized? But locked in
– “Hand shake” allows flexibility (other risks)
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Business Customers
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Producers
Resellers
Governments
Institutions
NAICS
• North American Industry Classification
System
• Utility maximization:
– Personal selling: customized, large orders
– Purchasing specs: precise description of what
firm wants
• Demand: derived, inelastic, or joint
• More volume
• B2B = geographically concentrated
Buying Center
• Roles – auto parts
– Users: work with product, often generate
specs (line workers)
– Influencers: can modify outcome; dev. Specs,
evaluate alternatives (engineers)
– Buyers: complete transaction, negotiate
(purchasing manager)
– Deciders: select or approve (upper/middle
management; may be same as buyer)
– Gatekeepers: control info. Within buying
center (secretary)
Buying Situations (1)
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Buying process: 3 types (goes with
individual as well)
1. Straight rebuy
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Small, recurring items like office supplies
Little buyer’s time, little info needed
Reminder ads, automate process
Purchasing manager and no one else
Buying Situations (2)
2. Modified rebuy (contract with dining hall ends)
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Some review
Dissatisfy: look for opportunity
Comparison ads: your product
Your client: protect, attention to changing needs
3. New task buying (plant overseas)
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Unique situation
Lots of information, effort, and time
Develop product and vendor specs
Many influences
Dell Commercial
Summary
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Types of business products, negotiations
B2B and the internet
Buying situations
Multiple influences – roles
Relationship marketing
NAICS
Buying center
Any questions?