© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

6-2 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin LEARNING OBJECTIVES Learning Objectives How do B2B firms segment their markets? How does B2B buying differ from consumer buying behavior? What factors influence the B2B buying process? How has the Internet changed B2B marketing?

6-3 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin B2B Marketing Who is the end user?

6-4 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin B2B Markets U.S. Census Website

6-5 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Manufacturers or Producers Buy raw materials, components or parts Manufacture their own goods Gear Expo News Clip

6-6 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Resellers ManufacturerResellerRetailer

How is this B2B ad similar to B2C ads?

In what kind of publication might this appear?

6-9 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Institutions Schools, Museums and Religious Organizations London Museum News Clip

6-10 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Government US Government spends $2.1 trillion procuring goods State and local governments also make significant purchases Firms specialize in selling to government

6-11 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Adding Value: Paris Runways

6-12 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 1. Identify the various types of B2B markets. 2. What are NAICS codes and how are they used? Check Yourself

6-13 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin B2B Buying Process

6-14 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Stage 1: Need Recognition Can be generated internally or externally Sources for recognizing new needs:  Suppliers  Salespeople  Competitors

6-15 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Stage 2: Product Specifications Used by Suppliers to develop proposals Can be done collaboratively with suppliers

6-16 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Federal Business Opportunities Website Stage 3: RFP Process (Request for Proposal)Request for Proposal

6-17 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Step 4: Proposal Analysis, Vendor Negotiation and Selection Often several vendors are negotiating against each other Considerations other than price play a role in final selection

6-18 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Step 5: Order Specification Firm places the order The exact details of the purchase are specified All terms are detailed including payment

6-19 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Step 6: Vendor Analysis

6-20 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Check Yourself 1. Identify the stages in the B2B buying process. 2. How do you do a vendor analysis?

6-21 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Factors Affecting the Buying Process Buying Process Buying Situation Organization Culture The Buying Center

6-22 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Buying Center

6-23 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Organizational Culture

6-24 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Buying Situations

6-25 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin New Buy Purchasing for the first time Likely to be quite involved The buying center will probably use all six steps in the buying process

6-26 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Modified Rebuy Purchasing a similar product but changing specifications Current vendors have an advantage

6-27 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Straight Rebuys Buying additional units or products that have been previously purchased Most B2B purchases fall into this category

6-28 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Power of the Internet Putting Volkswagen Together Realigned purchasing Introduced iPAD (internal purchasing agent desk) Cut time per order from 60 to 20 minutes Online connection to suppliers Online connection to suppliers

6-29 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Role of the Internet in Business-to-Business Marketing Sales support Virtual trade shows Private exchange Product design Online auctions

How is this ad B2B and B2C?

6-31 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Check Yourself 1. What factors affect the B2B buying process? 2. What are the six different buying roles? 3. What is the difference between new buy, rebuy, and modified rebuy?

6-32 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Glossary Business-to-business (B2B) marketing refers to the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, and/or for resale by wholesalers and retailers. Return to slide

6-33 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Glossary Buying center participants are people responsible for the buying decisions. Return to slide

6-34 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Glossary A private exchange occurs when a specific firm (either buyer or seller) invites others to participate in online information exchanges and transactions. Return to slide

6-35 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Glossary The request for proposals (RFP) is a process through which buying organizations invite alternative suppliers to bid on supplying their required components. Return to slide

6-36 © McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Glossary Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. Return to slide