1 B to B Marketing Monitoring the Buying Process

The Organizational Market The Buying Process The Make or Buy Decision The Buying Center Buying Situations and Decision Making 2

The Organizational Market 3

4 Back and Forth Benefit Cost Product or Service Features Price Customer Benefits + Margin = Downward marketing Selling Upward marketing Buying Offer Demand

5 A hidden Market as a Battlefield : Company Wins 2 : Competitor Wins 3 : Area of Overlap = Battlefield Service Product

6 Charateristics of organizational Buying Process Organizational Buying is a joint decision Organizational Buying is a planned process Organizational Buying is led by Professionnals Organizational Buying builds up a competitive edge

The Buying Process 7

8 Factors related to Environment Factors related to Environment Factors related to Organisation Factors related to Organisation Human Factors Industrial Need Industrial Need Purchase Analysis Purchase Analysis Purchase Procedure Purchase Procedure Post Purchase Evaluation Post Purchase Evaluation Organizational Buying Process Influences

9 The Stages in the Buying Process 1Problem Recognition Recognize a need can be met by acquiring a good 2Product Specification Determine item’s characteristics and quantities 3Supplier Search Identify the most appropriate suppliers 4Analysis of Proposals Evaluate alternative proposals from qualified suppliers 5Supplier Selection Assess Supplier value through scorecard 6Performance Review Evaluate the performance of supplier

10 Environment Legal constraints Economic Trends Technology change Organisation Structure & Style Company Policy Buying Center Influences in organizational Buying PESTE Political Economic Social Technological Environment Company Values People

The PESTE Model P : Politics –Tax system, Corporate law, liberalism E : Economics –Growth, credit rate, inflation, stagflation S : Social –Salary span, Trade Unions, unemployment rate T : Technology –R&D, patents, level of expertise, industrial practices E : Environment-Green economy –Recycling practices, eco compliance 11

The Make or Buy Decision 12

13 Make or Buy ? Relevant Manufacturing

Make or Buy Analysis 14 Make Internal Resources Yes No Industrial Capacity YesNo Reliable Supplier NoYes Strategic YesNo Buy Costs & Benefits

15 Dependence on Suppliers

16 Especially true with Demand Pull Manufacturing

17 The Double Bind SupplierCustomer Bind of mutual Dependance The Manufacturer depends on its supplier’s shipments The Manufacturer depends on the quality level of supplies

18 Apple has no Plant The i Pod, made in China, sourced from Japan, Taiwan etc

The Buying Center 19

20 Roles in the Buying Center Source : F E Webster & Y Wind User Influencer Decider Gatekeeper Buyer Initiator

21 Buying Center Decision is a Role Process Initiators : request something be purchased Influencers : affect the decision by supplying information for alternative solutions, often technical. Gatekeeper : control the information flow to the members of the buying center Decider : make the buying decision Buyer : has formal authority to arrange the purchase terms User : will use the product or service Source : F E Webster & Y Wind

BlackBerry CRM Migration 22 INITIATORCOMMERCIAL DIRECTOR USERAFTER SALES SERVICE INFLUENCERIT DIRECTOR GATEKEEPERMARKETING DIRECTOR DECIDERFINANCE DIRECTOR BUYERHEAD OF PURCHASING

23 Article « US plays for fighter domination” –By Jeremy Lemer and Gerrit Wiesmann The Financial Times June 15, 2009

The Buying Situations 24

25 Types of Industrial Buying Situations Buying Situation Newness of Problem Information Requirements Consideration of New Alternatives New Task Modified Rebuy Straight Rebuy High Medium Low Maximum Moderate Minimal Important Limitate None Source : Robinson et al

26 Stages in the Buying Process Buying Situation New TaskModified RebuyStraight Rebuy Problem Recognition Product Specification Supplier Search Analysis of Proposals Supplier Selection Performance Review Source : Patrick J Robinson, Charles W Faris, Y Wind

27 Participants in the Buying Process UserInitInflGateDecBuy Problem Recognition Product Specification Supplier Search Analysis of Proposals Supplier Selection Performance Review Source : FE Webster & Y Wind

Making Decisions in Buying 28

Call for Tender

Performance Score Card 30 CriteriaWeight/ Technology9CBA Reliability4ABC Delivery7BCA Compatibility8ACB Service4CBA Price3ABC Veto A : 9x4 + 4x1 + 7x5 + 8x1 + 4x4 + 3x2 = ? B : 9x2 + 4x2 + 7x3 + 8x3 + 4x1 + 3x3 = ? C : 9x1 +

The Buying Decision Grid 31 Commercial Uncertainty Product Low Complexity High Board Senior ManagerAll Departments Low BuyerTechnician Manufacturing, Process Source : L. Fisher

32 Commercial Uncertainty Product Low Complexity High Low Source : L. Fisher 4 Examples for a Buying Decision Grid

33 Brand Relevance New Task Modified Rebuy Straight Rebuy High Brand Relevance Weak Source : Philip Kotler 1.Pb Recognition Performance Review BtoB brands yet have power

34 Conclusions