Chapter Six Business to Business Marketing Beginning Case Xerox is a synonym for copy company foundered in late 1990s and slid toward bankruptcy o Shift in focus meant Xerox moved more into service provision o Allowed companies to focus on their won growth and innovation rather than on operational efficiency or technological infrastructure o Help clients meet their own business goals o B2B of manufacturers or producers Acquire global imaging systems inc which provides document management and IT solutions and services for small to mid size businesses Bought out XMPie to help Xerox help its customers facilitate their personalized marketing campaigns across print Web e mail and mobile applications o Expansion into back office services also puts it into direct competition with powerful rivals o The massive sale force expansive contracts for document handling innovative new product launches aggressive acquisitions are notable especially in terms of their context All center on business to business relationships among companies Business to business marketing refers to process of buying and selling goods or services to be used in production of other goods and services for consumption by the buying organization and or resale by wholesalers and retailers o Market goods and services to other businesses but not to the ultimate customer o B2B transactions tend to be more complex and involve multiple members of both the buying and selling organization o Demand for B2B sales is derived from B2C sales in same supply chain Derived demand reflects link between consumers demand for companies output and companies purchase of necessary inputs to manufacture or assemble that particular output o Focus on services specific types of customer markets by creating value for those customers o Many B2B companies find it more productive to focus their efforts on key industries or market segments B2B Markets Make products they sell to others manufacturers and producers buy raw materials components and parts that allow them to manufacture their own goods o Purchasing agent receive product descriptions directly from suppliers online o Receive alerts of potential parts shortages before they occur so can focus on efficiencies instead of redundant paperwork Resellers are marketing intermediaries that resell manufactured products without significantly altering their form o Wholesalers and distributors buy products and sell them to retailers B2B o Retailers in turn sell those Xerox products to ultimate consumer B2C Institutions purchase all kinds of goods and services Government is one of largest purchasers of goods and services Adding Value wholesale buyers thus can inspect new lines of clothing and place orders build relationships with designers spread buzz about new fashions that will be available in their stores o TJ Maxx uses Internet bloggers to spread word about its lines Purchases whatever other store couldn t sell Refuses to advertise specific brand names protects high end image of brand and avoids a confrontation with regular priced department store customers Business to business Buying Process Step 1 Need Recognition is when buying organization recognizes through either internal or external sources that has an unfilled need Step 2 Product Specification is after recognizing the need the organization considers alternative solutions comes up with potential specifications vendors might use to develop their proposals Step 3 Request for Proposal RFP is common process through which organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications o Web portal Internet site whose purpose is to be major starting point for users when connect to the Web B2B partners connect to specialized or niche portals to participate in online information exchanges and transactions Provide cost savings because eliminate periodic negotiation paperwork Step 4 Proposal Analysis Vendor Negotiation and Selection o Buying organization in conjunction with its critical decision makers evaluates all proposals it receives in response to RFP o Some firms have policy that requires them to negotiate with several suppliers particularly if product or service represents critical component or aspect of the business Policy keeps suppliers on their toes they know that buying firm can always shift greater portion of business to alternative supplier if it offers better terms Step 5 Order Specification is when firm places its order with its preferred supplier o Order includes detailed description of goods prices delivery dates and in some cases penalties for noncompliance o Suppliers then sends acknowledgement that it has received order fills it by Step 6 Vendor Performance Assessment Using Metrics o Firms analyze their vendors performance to make decisions about future specified date purchases Buying team develops list of issues important to consider in vendor Determine importance of each issue assign importance score to each Buying team assigns number to reflect judgment on how vendor performs Multiply importance by vendors performance score Buying Center Participant s range from employees who have formal role in purchasing decisions to members of design team that is specifying particular equipment or raw material needed by employees who will be using new machine that is being ordered Initiator person who first suggests buying particular product or service Influencer person whose views influence other members of buying center in making final decision Decider person who ultimately determines any part of or entire buying decision Buyer person who handles paperwork of actual purchase User person who consumes or sues product or service Gatekeeper person who controls information or access or both to decision makers influencers o Ethical many medical societies have agreed to restrictions that prohibit gifts from pharmaceutical or medical device industries Organization Culture reflects set of values traditions and customs that guide its employees behavior Unspoken guidelines that employees share with one another through various work situations decision alone others first Autocratic buying center may be multiple participants but one person makes Democratic buying center majority rules Consultative buying center use one person to make decision but solicit input from Consensus buying center al members of team reach a collective agreement to support purchase Building B2B Relationships o Blogs and social media
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