1. B2B Buying Behaviour
Lecture 4

2. learning objectives Understand the nature and structure of B2B buying
Appreciate the differences between B2B buying and consumer buying
Analyze the buying process and the reasons why purchasing varies across different buying situations
Link B2B buying with the development of marketing strategy
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3. B2B marketing defined
B2B marketing is the management process responsible for the facilitation of exchange between producers of goods and services and their organisational customers
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4. B2B and Consumer Markets
B2B customers
Purchase products to meet specific business needs
Emphasise economic benefits
Use formal, lengthy purchasing policies and processes
Consumer customers
Purchase products to meet individual or family needs
Emphasise psychological benefits
Buy on impulse or with minimal processes
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5. B2B and Consumer Markets
B2B customers
Involve large groups in purchasing decisions
Buy large quantities infrequently
Want a customised product package
Consumer customers
Purchase as individuals or as a family unit
Buy small quantities frequently
Are content with standardised product packages
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6. B2B and Consumer Markets
B2B customers
Experience major problems if supply fails
Find switching suppliers difficult
Negotiate on price
Consumer customers
Experience minor irritation if supply fails
Find switching suppliers easy
Accept stated price
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7. B2B and Consumer Markets
B2B customers
Purchase direct from suppliers
Justify an emphasis on personal selling
Consumer customers
Purchase from intermediaries
Justify an emphasis on mass media
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8. Types of B2B Customers Commercial enterprises Government bodies
Institutions
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9. Characteristics of B2B Markets
Nature of demand
Structure of demand
Complexity of
buying process
Buyer-seller
relationships
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10. Derived Demand Goodyear’s RunOnFlat Tyres are featured on BMWs,
Ferraris,
Corvettes,
Maseratis, and
Mercedes
Source: © Goodyear Dunlop Tyres Europe
B.V.
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11. Joint Demand
Demand for Samsung’s Solid State Disk (SSD) is tightly coupled with the demand for computers and other devices with memory chips
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12. Inelastic Demand
Elasticity of demand refers to the extent to which the quantity of a product demanded changes when its price changes;
If a product has inelastic demand, demand does not change due to price changes
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13. Advantages of Single Sourcing
Improved communications
Increased responsiveness
Shared design of quality control systems
Elimination of supplier switching costs
Improvement in product cost effectiveness
Reduced prices through larger volume
Reduced prices through reduced supplier costs
Enhanced ability to implement JIT systems
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14. Disadvantages of Single Sourcing
Increased costs through lack of competitive pressure
Increased supply vulnerability
Reduced market intelligence and flexibility
Improved supplier appraisal capacity
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15. Advantages and Disadvantages of Multiple Sourcing
Increased competitive pressure
Improved supply continuity
Improved market intelligence
Improved supplier appraisal effectiveness
Disadvantages
Perceived lack of commitment
Increased costs
Less supplier investment
Reduced willingness to adapt
Higher operating costs
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16. Purchase Significance
New Task
Modified
re-buy
Routine
re-buy
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17. Question for discussion
From the supplier’s point of view, how might the marketing approaches aimed at a customer making a new task purchase differ from those aimed at a routine re-buy customer?

18. Buying Decision-Making Process
Precipitation
Product
specification
Supplier
selection
Commitment
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19. Buying Centres Consumer B2B Initiator User Influencer Influencer
Decider
Decider
Purchaser
Buyer
User
Gatekeeper
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20. Buying Criteria: Economic Influences
Appropriate
prices
Product
specification
Quality
consistency
Supply reliability
and continuity
Customer
service
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21. Approaches to Supplier Handling
Adversarial
Multiple suppliers
Regular price quotes
Adversarial negotiations
Sporadic communication
Little cooperation
Quality and time scales to meet lowest expectations
Emphasis on lowest unit price
Collaborative
Few suppliers
Long-term relationship
Partnerships
Frequent, planned communication
Integrated operations
Quality and time scales ‘designed in’
Emphasis on lowest overall cost
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22. Relationship Life Cycle
Awareness
Exploration
Expansion
Commitment
Dissolution
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23. Buying Criteria: Non-Economic Influences
Prestige
Career security
Friendship
Other
personal needs
Trust
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24. Question for discussion
You are the purchasing manager of a large organisation with an
enormous annual spend. Most of your contracts are awarded by
tender. What would your attitude be to the following offers from
potential suppliers, and to what extent would they influence your
decision-making:
a bottle of whiskey at Christmas?
an invitation to lunch to discuss your requirements?
an offer of the free use of the supplier’s managing director’s Spanish villa for two weeks?
(d) £1500?