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BUSINESS TO BUSINESS MARKETING Ing. Lucia Bartková, PhD. PRICE IN B2B MARKETING PRICE •as equivalent, has to be paid for product •reward to company for product or service supply •monetary expression of product value •instrument for value measuring and comparison PRICE MIX COMPONENTS •price setting process •price actualization •discounts •price strategies •payment tools •payment methods •price differentiations PRICE AS… •rent •school fee •charge •interest •road tool •insurance •transport charge •royalty •salary •deposit •tax •membership fee •commission FACTORS OF PRICE DECISION 1.internal factors -marketing goals -costs -marketing mix strategy -organization of price setting FACTORS OF PRICE DECISION 2.external factors -market and demand character -competition -value perceived by customer -another factors PRICE ADAPTATION •geographic aspect •price discounts •advertising pricing •discriminatory pricing •marketing mix pricing GEOGRAPHIC ASPECT - distant locality, finance shortage… • • • • barter compensation deal redeem (re-purchase) counter-claim PRICE DISCOUNTS - cash discounts given to everybody • • • • cash discounts bulk discounts functional discounts charge deduction ADVERTISING PRICING - early purchase support • • • free service, guaranty extension payment with low interest running psychological price DISCRIMINATORY PRICING • • • • according to the segment according to the product variant according to the time according to the place MARKETING MIX PRICING • • • • • price of special supplements fixed products packages secondary product capitation PAYMENT TOOLS • • • • • • • • • • • • documentary credit documentary collection clear payment bill of exchange cheque advance payment leasing payment e-commerce bank guaranty bank loan supply loan factoring, forfeiting PRICE SPECIFICS • • • • • • • • • • • bigger sensibility to price bigger amount of money individual price calculation price as result of compromise price as result of relationships price set by competition, tender discounts providing many payment tools price is not always competing tool price according to the law state regulations DISTRIBUTION IN THE B2B MARKETING DISTRIBUTION - distribution = all activities allowing transfer of physical and dispositional right for product from one subject to another - distribution channels = groups of independent organizations participate in accessing products for another usage or end consumption - middlemen = members of distribution channel helping producers to search and obtain customers and to realize transactions ARGUMENTS FOR USING DISTRIBUTION CHANNELS - economical advantages (spanning of distance, product completion) - solution of weaknesses in organization (lack of finance, lack of staff, lack of know-how, enterprise risk elimination) - customers’ expectations fulfilling FUNCTIONS OF DISTRIBUTION CHANNEL • • • • • • • • market research marketing communication contact obtaining negotiations range of goods transformation physical distribution risk acceptance financing DISTRIBUTION CHANNEL CREATION ON B2C MARKET producer consumer producer producer wholesale producer wholesale middleman retail consumer retail consumer retail consumer TRENDS IN WHOLESALE • • • • agreement with producer about expected functions of wholesaler information obtaining about producer by visit, conference, sales exhibition fulfilling obligations in payment discipline and in information providing towards producer searching and offering services to customers remaining customer value TRENDS IN RETAIL • • • • • new forms of retail and its combination shorter life-cycle of some forms of retail fast increase retail without selling places increase of competition among the same and among different types of retail wide-range of goods offering or specialty retailer ??? TRENDS IN RETAIL • • • • • shopping centers considered to be suite for “purchase under one roof” => services as coffee-bars, tea-houses, children corners, bookshops, cinemas, restaurants distributional channels are better and more professional managed IT as important competing tool big retailers with strong brands expansion from foreign countries DISTRIBUTION CHANNEL CREATION ON B2B MARKET B2B consumer producer B2B distributor B2B consumer producer sales department B2B distributor B2B consumer producer sales agent B2B distributor B2B consumer producer SUBJECT OF DISTRIBUTION CHANNEL ON B2B MARKET • • • • • producer = producing and delivering product sales department = organization division of producer sales agent = individual company b2b distributor = businessman with industrial goods and raw materials with a network of b2b customers b2b consumer = company buying raw materials and semi-products for another production or buying product for own consumption FACTORS OF DISTRIBUTION CHANNEL SELECTION • • • • • • • • • • • • purchase frequency product differentiation value of purchase unit credit of brand purchase bulk technical complexity of product investments to storehouses consumers’ arrangement type of market (b2b, b2c) size of market competition consumers with specific requests DISTRIBUTION CHANNELS ORGANIZATION 1. 2. 3. 4. traditional vertical close administrative contractual horizontal multi-channel DISTRIBUTION CHANNELS ORGANIZATION 1. traditional - individual producer, wholesaler and retailer - each of them try to maximize own profit - each of them works independently and don’t have dominant control in system DISTRIBUTION CHANNELS ORGANIZATION 2. • • • vertical producer, wholesaler and retailer as one system, one is dominant (e. g. owner) close (production and distribution in one owner unit) administrative (size and power of one subject in system) contractual DISTRIBUTION CHANNELS ORGANIZATION 3. horizontal - two or more organizations connection - they don’t have enough capital, know-how or production capacities for individual business - permanent or temporary cooperation DISTRIBUTION CHANNELS ORGANIZATION 4. multi-channel - combination of vertical and horizontal distribution channels - better market covering - lower distributional costs - comfortable purchase for customers - more efficient selling LOGISTIC • • • • • physical distribution orders processing storage inventories managing carriage (speed, availability, safety, capacity, frequency, costs) CARRIAGE • • • - truck, air, railway, ship, sea carriage by pipeline combined carriage piggyback (railway and truck) fishyback (ship and truck) trainship (train and ship) airtruck (air and truck) COVERING • • • • • • railway wagons oil-ducts, gas-ducts, pipelines tanks, cisterns barrels pallets boxes • • • • • ferryboats containers electrical networks by air technical progress INCOTERMS • international trade - E (removal) – EXW - F (main carriage not paid) – FCA, FAS, FOB - C (main carriage paid) – CFR, CIF, CPT, CIP - D (arrival) – DAF, DES, DEQ, DDU, DDP SPECIFICS OF DISTRIBUTION IN B2B MARKETING • • • • • • more direct and shorter distributional channels specific distributional channels higher demand for capacity and type of carriage higher demand for territorial covering by distributor untraditional covering direct sale require higher demands for selling staff PROMOTION IN THE B2B MARKETING MARKETING COMMUNICATION 1. informing about products, their attributes, benefits, quality, value, usage, utility 2. listening, receiving suggestions and request of consumers MARKETING COMMUNICATION MIX • • integrated and controlled system of communication tools and methods for presentation of organization and its products to consumers advertising, sales promotion, public relations, personal selling and direct marketing ADVERTISING • • - any paid form of impersonal presentation and promotion of ideas, goods or services to target market advertising strategy: advertising goals setting advertising message creation media plan budget for advertising plan realization advertising effectiveness measuring ADVERTISING STRATEGY • - advertising goals setting informative advertising persuasive advertising reminding advertising supporting advertising ADVERTISING STRATEGY • - advertising message creation according to the goals effort to attract consumers’ interest product attributes, features, usage presentation profit achieving or costs saving for consumer end b2b consumer or retailer ADVERTISING STRATEGY • - media plan reach, frequency, effect, advantages, weaknesses of every medium newspaper, journals, TV, radio, internet, address mail, bulletins, catalogues, brochure, folders, telephone, 3D items, untraditional forms (trucks, hot-air balloons, airships, transparent hung after airplane) ADVERTISING STRATEGY • - budget for advertising plan realization goal of advertising campaign product life-cycle stage market share competition and its communication advertising frequency substitute product influence ADVERTISING STRATEGY • - advertising effectiveness measuring advertising effect on informedness, knowledge or preferences advertising effect in relation to expenses and achieved results or to goals fulfilling marketing research SALES PROMOTION • - package of motivational tools with shortterm character created for faster of bigger purchase stimulation sales promotion for customers sales promotion for trade systems other forms of sales promotion SALES PROMOTION • - sales promotion for customers samples coupons discounts presents free trying of goods product guarantees product exhibiting and demonstration SALES PROMOTION • - sales promotion for trade systems discount charge deduction free goods SALES PROMOTION • - other forms of sales promotion trade fairs and exhibitions selling competitions advertising presents PUBLIC RELATIONS • • • communication focused on forming of attitudes towards organization goal is to create positive relationships of customer to organization and its products programs focused on organization presentation, defense of organization's image or image of products PUBLIC RELATIONS • - main activities: relations with press to positive inform about organization, results, intensions product publicity organizational communication (internal & external) lobbing with government consulting for management PUBLIC RELATIONS • - - - main tools: publications (annual reports, brochures, articles, own newspapers and journals, books, etc.) events (conferences, seminars, trips, exhibitions, competitions, anniversary celebrations, etc.) sponsoring PUBLIC RELATIONS • - - main tools: press (electronic, printed; news, speech, interviews, professional articles, meetings, analysis, etc.) public services (e. g. environment protection) internal PR (meetings, company-journals, reports, notice-boards, circular letters) PUBLIC RELATIONS • - - PR goals: building of awareness about organization building of credibility of organization selling staff or representatives stimulation decrease of promotional costs PERSONAL SELLING • • the most used type of marketing communication on b2b market “one-to-one” communication with one or more potential buyers focused on product presentation, drawing an attention, answering the questions and order acquirement PERSONAL SELLING • - main goals: to rouse excitement and interest on market before start of advertisement to built base of critical customers to built relationships with customers to change satisfied customer into promoters and advocates of organization to affect persons with some influence in favor of organization (doctors, teachers,…) to determine product positioning ROLES AND FUNCTIONS OF SELLER • • • • • • • deliveryman (of information or product) orders receiver (order completing) missioner (commerce establishing, trust excitation) technician (technical mechanism seller) consultant demand creator problem solutionist TASKS OF SELLER • • • • • • • to search new customers and new business opportunities to give his time to potential and existing consumers to communicate with consumers and to provide information for them to sell products to provide services, consultations, help,… to collect information by market research, market analysis, selling analysis to lay out products, to evaluate consumers, to set delivery order, delivery conditions specification,… SELLING NEGOTIATION • • • • • personally or by telephone / internet with group of consumers as a sellers’ team with group of consumers organization of selling conferences (presentation) organization of selling seminars (presentation and education) PERSONAL SELLIG PROCES 7. care after selling 6. business closing 5. objections handling 4. presentation and demonstration 3. contact establishment 2. preparation for contact establishment 1. searching and appraisal DIRECT MARKETING • • • • interactive marketing system using one or more media to reach measurable response from customers or to realize a transaction from anywhere the core is to create database of customers marketing of direct supply or marketing of direct relations long-time relationships with customers DIRECT MARKETING • - advantages for customer: comfort purchase in own organization time saving, visit of many shops comparison of each purchase advantage obtaining information without meetings with sellers possibility to call for free numbers goods delivering by mail DIRECT MARKETING • - advantages for seller: list of customers from any target group obtaining long-time relations with customers message timing more addressed promotional materials usage of secret selling and communication strategies measuring of responses to the campaign DIRECT MARKETING • - • • direct mail letters, hand-outs, bulletins, offering materials, CD with offers or with advertising programs, presents, samples lettershop – mass mail processing direct distribution – addressless mailing catalogue marketing DIRECT MARKETING • • • • • • telemarketing (selling dialogue through telephone) faxmailing teleshopping direct marketing in radio, TV, newspapers e-commerce order automat THANK YOU FOR YOUR ATTENTION