Download Characteristics influencing marketing

The Business-to-Business Market
B2B
Market

Business and Industry

Governments

Institutional Markets

Wholesalers/Retailers

Professions
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-1
The Business-to-Business Market
Characteristics influencing marketing:
1. Concentration and location of buyers
2. Joint and derived demand
3. Practical buying criteria
4. Formal buying process
5. Centralized decision-making
6. Relationships (CRM)
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-2
Demand Characteristics
Derived
Demand
Business demand is actually
derived from consumer
demand.
Joint
Demand
Production and marketing of
one good is dependent upon
another good.
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-3
Vendor Analysis
Assessing potential suppliers on predetermined
criteria.
Buying
Organization
Suppliers
Technology
Consistency
Quality
On-time Delivery
Quantity Needed
Price
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-4
Practical Buying Criteria
When selecting a supplier, a buyer will evaluate
competitive offerings. The key criteria include:

Price

Quality

Service and Services Offered

Continuity of Supply
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-5
The Buying Process
One individual may sign the order but
many individuals influence the decision.
 Buying Committees (formal)
 Buying Centres (informal)
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-6
The Buying Committee
Production
Marketing
Engineering
Finance
Key personnel from various
departments are involved in
the decision—a team
approach is taken.
Purchasing
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-7
The Buying Centre
Users
Influencers
Buyers
Deciders
The participating
individuals perform
certain roles in the
buying process.
Gatekeepers
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-8
Integration and Partnering
Customer relationship management practices
are common in B2B marketing.
Efficiency is the goal
 Closer links among channel members
 Electronic transfer of information (EDI)
 Project teams buy and sell
 Global sourcing
 E-commerce

Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-9
New Task Buying
Buying an expensive item for the first time.

High price

High risk

Formal process
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-10
Modified Rebuy
Lower in price and purchased infrequently.

Some risk

Search for value

Performance important

Buying centre
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-11
Straight Rebuy
Inexpensive items bought on regular basis.

Minimal risk

Ongoing source of supply

Repeat order routine
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-12
Organizational Buying Model
A clearly defined and
rational approach to
buying.
Problem Recognition
Need Description
Product Description
Supplier Search
Performance Review
Order Routine Specs.
Proposal Solicitation
Supplier Selection
Canadian Marketing in Action, 6th ed. Keith J. Tuckwell
©2004 Pearson Education Canada Inc.
5-13