Exam 2 Book Material 6 8 10 Chapter 6 o Chapter Intro Xerox Shifted focus to business over everyday consumer Long term contracts with hardware software and long term solutions First women and African American CEO successor Aggressive acquisitions o B2B marketing o B2B Markets Manufacturers or Producers The process of buying and selling goods or services to be used in the production of other goods for consumption by the buying organization and or resale by wholesalers and retailers Involves manufacturers wholesalers and service firms that market to other businesses not directly to consumer The key difference from B2C is the ultimate user not the product o Also more complex w more members involved o Demand is derived from B2C Derived demand reflects the link between consumers demand for a company s output and the company purchase of necessary inputs to make that output Similar They focus on serving specific types of customer markets o Focus efforts on key industries or market segments Splenda Coke Siemens Technology market Eg Volkswagen group communicates directly with suppliers to get parts Resellers o Significantly cut down search time and cost o Turns focus to improving efficiency over paperwork marketing intermediaries that resell manufactured products without significantly altering their form o Wholesalers and distributors Retailers are B2B when they buy merchandise for their stores capital investments leasing locations financing operations o Ex TJ Maxx hosting bloggers Sell high name at low price and deep discount Institutions Government Ex Hospitals educational orgs religious orgs all buy stuff Public Schools have up to 40 million for textbooks o Bulk discounts if schools work as part of system o Need capital construction food janitorial services Over 700 billion a year o A D consulting child support enforcement programs o B2B Buying process Need Recognition Product Specification RFP Process Proposal analysis and Supplier Selection Order Specification Vendor Performance Assessment using metrics Need Recognition Recognizes unfulfilled need Ex Airport convenience vendors Product Specification Alternative solutions potential specifications Ex Airport hours items they can sell RFP Request for Proposal Organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications Web portal internet site whose purpose is to be a major starting point for users o Streamline procurement or distribution processes o Lower costs o Ex Guru com Dispute resolution escrow for payments means to rate freelance quality Proposal Analysis Vendor Negotiation and Selection Narrow selection choices by existing relationships price quality delivery financing o Weight importance of factors and negotiate which keeps Order Specification suppliers on their toes Description of goods prices delivery dates and even penalties for non compliance Vendor Performance Assessment Using Metrics More formal and objective than B2C Customer service hours of operation product deliveries product quality o Weighed and evaluated o The Buying Center Range from procurement or purchasing departments to members of the design team that specify their needs Example Doctors 6 different roles Skewed information to help sales 1 Initiator Your Doctor person who first suggests buying the product 2 Influencer Medical Device Supplier the Pharmacy to push the idea onto others 3 Decider Hospital Ultimately determines any part of or the entire buying decision including if what how where to buy 4 Buyer handles paperwork 5 User The patient 6 Gatekeeper The insurance Company controls information or access to decision makers and influencers o Organizational Culture reflects the set of values traditions and customs that guide its employees behavior Ex Walmart no small gifts from vendors Organizational Buying Culture Can have a profound effect on buying decisions Autocratic vs Democratic o Alone v majority Consultative buying centers v consensus buying center o One decider with multiple inputs v multiple deciders Building B2B Relationships Ex Staples program challenge o May lead to acquisitions brand recognition gain loyalty Ex LinkedIn TweetDeck White papers provide valuable information that a businessperson can easily understand and that will help the company address its problems with new solutions New Buy situation customer purchases a good or service for the first o The Buying Situation time Buying decision is involved b c no experience Goes through all 6 steps in buying process o Ex New balance custom shoe o Buyer v designer keep access to designs before after Modified rebuy specifications Bought a similar item in the past but wants to change some o Price quality customer service level options o Current vendors have advantage o Ex OSU compare contract with UM for lower price Straight Rebuys Additional stock A majority of B2B transactions o B2B is influenced by the constitution of the buying center the culture of the purchasing firms and the context of the buying situation o Chapter Case UPS expand internationally competition size not weight 3PL Decision Green Chapter 8 Segmentation Targeting Positioning o Intro Victoria Secret using price points to segment its market customizing to appeal to target audiences locations production and promotion o STP segmentation targeting and positioning 5 Steps 1 Strategy or Objectives o Derived from mission and objectives o SWOT Ex Coke Zero target men 2 Segmentation Methods o Geographic Segmentation Organizes customers into groups on the basis of where they live Ex Competition for Chinese drivers age gender income o Demographic Not effective for activewear Nike lifestyle values o Psychographic How they describe themselves Self value goals for life Self concept self image Lifestyle way we live VALS tool Resources v Motivation for buying Identify target market and underlying buyer motivations More useful than demo but more expensive o Geo demographic urban birds of a feather flock together Retailors can tailor branch to their location o Benefits convenience prestige Crowdsourcing Unilever Axe new product Ex Hollywood movie themes o Behavioral How they use the product Occasion When purchase or consumed o Ex Suit for work or prom Loyalty Buy exclusively Investing in retention United Airlines o Using multiple segmentation methods Ex Saks 5th use psychographic and demographic Ex Chine Mobile Rural segmentation wealthy businessmen and college segments expansion
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