Slide 8.1 Business-to-business marketing Chapter 8

Slide 8.2 Typical transactions of business markets Figure 8.1 Business transactions involved in producing and distributing a pair of shoes

Slide 8.3 Characteristics of business markets Business markets differ from consumer markets by structure and demand –Geographically concentrated e.g. London for Financial services –Derived demand Derived from the demand for consumer goods. –Inelastic demand Total demand for a product that is not much affected by price changes, especially in the short-term. –Fluctuating demand Small change in consumer demand may result in large business demand.

Slide 8.4 Nature of the purchase unit More buyers More professional purchasing process

Slide 8.5 Types of decision and the decision process Business buyers generally involved in more complex buying decisions Buying process more formalised Buyer and seller more dependent upon each other Sellers frequently customise the products for the buyers Build close long-term relationships Proactive planning

Slide 8.6 Other characteristics of business markets Direct purchasing –Fewer intermediaries Reciprocity –Leveraging products and services in associated companies Leasing –Predominantly in capital equipment, cash flow management and tax advantages as well as upgrade facilities

Slide 8.7 Model of business buyer behaviour Figure 8.2 A model of business buyer behaviour

Slide 8.8 Business buyer behaviour Figure 8.3 Three types of business buying situation Source: Ben M. Enis, Marketing Principles, 3rd edn (1980). © 1980 Scott, Foresman & Co.

Slide 8.9 Main types of buying situation Straight re-buy –Routinely reorders something without modification Modified re-buy –Buyer needs to modify product specifications, prices, terms or suppliers New task –Order product or service for the first time

Slide 8.10 Participants in the business buying process Buying centre Users Influencers Buyers Deciders Gatekeepers

Slide 8.11 Figure 8.4 The main influences on business buying behaviour

Slide 8.12 Main influences on business buyers Environmental factors –Economic environment influencing demand, interest rates etc. Organisational factors –Upgraded purchasing mechanisms e.g. electronic data interchange Strategic materials management, TQM and JIT –Centralised purchasing –Long-term contracts –Purchasing performance evaluation Interpersonal factors Individual factors –Every buyer has unique personal attributes that will affect the process.

Slide 8.13 Table 8.1 Key stages of the business buying process in relation to important buying situations Source: Adapted from Patrick J. Robinson, Charles W. Faris and Yoram Wind, Industrial Buying and Creative Marketing (Boston: Allyn & Bacon, 1967), p. 14.

Slide 8.14 How do business buyers make their buying decisions? Problem recognition General need description –General characteristics and quantity needed Product specification –Value analysis approach to cost reduction. Supplier search –Key attributes specific to value adding partnerships Proposal solicitation –Formalised process of quotations Supplier selection –Preferred supplier status Order-routine specification –Order generation Performance review –Rating of supplier performance against set criteria

Slide 8.15 Institutional and Government markets Institutional markets Schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care. Characterised by low budgets, captive patrons and often have unique needs. Government markets offer huge opportunities for many companies due to volume and regularity of demand. Predominantly tender or bid driven and practices vary from country to country. High level of bureaucracy

Slide 8.16 Svara på frågorna 327.