7-1 CHAPTER BUSINESS-TO- BUSINESS MARKETING 7 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

7-2 LEARNING OBJECTIVES Describe the ways in which business-to- business (B2B) firms segment their markets. List the steps in the B2B buying process. Identify the different roles within the buying center. Describe the different types of organizational cultures. Detail different buying situations. Business-to-Business Marketing LO1 LO2 LO3 LO4 LO5

7-3 General Electric ZUMA Press, Inc./Alamy

7-4 B2B Marketing Who is the end user? ©1998 EyeWire, Inc C Squared Studios/Getty Images

7-5 B2B Markets ResellersInstitutionsGovernment Manufacturers/ Service providers U.S. Census

7-6 Manufacturers and Service Providers Buy raw materials, components or parts Manufacture their own goods Gear Expo News Clip Car Culture/Getty Images

7-7 Resellers ManufacturerResellerRetailer Courtesy Eastman Chemical Company

7-8 In what kind of publication might this appear? Courtesy Pepsi-Cola Company

7-9 Chipwich Teaches Business”

7-10 Institutions Schools, Museums and Religious Organizations Annie Reynolds/PhotoLink/Getty Images Royalty-Free/CORBIS

7-11 Government  US Government spends $2.1 trillion procuring goods  State and local governments also make significant purchases  Firms specialize in selling to government Getty Images Hisham F Ibrahim/Getty Images

7-12 Adding Value: Paris Runways Photo by Eric Ryan/Getty Images

7-13 Check Yourself 1.What are the various B2B markets?

7-14 B2B Buying Process Need recognition Product specification RFP process Proposal analysis and supplier selection Order specification Vendor/ performance assessment using metrics

7-15 Stage 1: Need Recognition  Can be generated internally or externally  Sources for recognizing new needs:  Suppliers  Salespeople  Competitors Times Photo by Toni L Sandys/Newscom Sylvain Grandadam/The Image Bank/Getty Images

7-16 Stage 2: Product Specifications  Used by Suppliers to develop proposals  Can be done collaboratively with suppliers Royalty-Free/CORBIS

7-17 Stage 3: RFP Process (Request for Proposal)Request for Proposal ©Toyota Motor Engineering & Manufacturing North America, Inc. Federal Business Opportunities Website

7-18 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 Courtesy The Goodyear Tire & Rubber Company

7-19 Step 5: Order Specification  Firm places the order  The exact details of the purchase are specified  All terms are detailed including payment Digital Vision/Getty Images

7-20 Step 6: Vendor Performance Assessment Using Metrics

7-21 Check Yourself 1.Identify the stages in the B2B buying process. 2.How do you perform a vendor analysis?

7-22 The Buying Center Buying center InfluencerDeciderBuyerUserGatekeeperInitiator

7-23 Wine Entrepreneur

7-24 Organizational Culture Buying culture DemocraticConsultativeConsensusAutocratic

7-25 Buying Situations Buying situations New buy Straight rebuy Modified rebuy

7-26 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 dynamicgrapics/Jupiterimages

7-27 Modified Rebuy  Purchasing a similar product but changing specifications  Current vendors have an advantage RubberBall Productions

7-28 Straight Rebuys  Buying additional units or products that have been previously purchased  Most B2B purchases fall into this category Ryan McVay/Getty Images

7-29 Identify the Buying Situations New buy Straight rebuy Modified rebuy Benjamin, the new sales manager for Burns & Company, was alarmed that the representatives used paper to track customer information. He made a decision to upgrade to a CRM system. For Benjamin, this represented a(n) __________ situation. The manager for a Kroger supermarket considers re- ordering items for his store. He will negotiate price concession and quality improvements. The manager is engaging in a(n) __________ situation. Denise is sharing with coworkers, “This customer just make a another big order, and they just keep on coming." Denise is likely selling to a customer in what kind of buying situation?

7-30 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?

7-31 Return to slide 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. Glossary

7-32 Return to slide Buying center participants are people responsible for the buying decisions. Glossary

7-33 Return to slide The request for proposals (RFP) is a process through which buying organizations invite alternative suppliers to bid on supplying their required components. Glossary

7-34 Return to slide Resellers are marketing intermediaries that resell manufactured products without significantly altering their form. Glossary