B2B - MSc

Report
chapter 4
B2B
buying behaviour
learning objectives
• Understand the nature and structure of
B2B buying
• Appreciate the differences between B2B
buying and consumer buying
• Analyze the buying process and the
reasons why purchasing varies across
different buying situations
• Link B2B buying with the development of
marketing strategy
4-2
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
B2B Marketing Defined
B2B marketing is the
management process responsible
for the facilitation of exchange
between producers of goods and
services and their organisational
customers
4-3
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Flybe chose Embraer to
supply its new aircraft
4-4
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
B2B and Consumer Markets_1
B2B customers
Consumer customers
• Purchase products to
meet specific
business needs
• Purchase products to
meet individual or
family needs
• Emphasize economic
benefits
• Emphasize
psychological benefits
• Use formal, lengthy
purchasing policies
and processes
• Buy on impulse or with
minimal processes
4-5
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
B2B and Consumer Markets_2
B2B customers
Consumer customers
• Involve large groups
in purchasing
decisions
• Purchase as
individuals or as a
family unit
• Buy large quantities
infrequently
• Buy small quantities
frequently
• Want a customised
product package
• Are content with
standardised product
packages
4-6
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
B2B and Consumer
Markets_3
B2B customers
Consumer customers
• Experience major
problems if supply
fails
• Experience minor
irritation is supply
fails
• Find switching
suppliers difficult
• Find switching
suppliers easy
• Negotiate on price
• Accept stated price
4-7
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
B2B and Consumer
Markets_4
B2B customers
Consumer customers
• Purchase direct from
suppliers
• Purchase from
intermediaries
• Justify an emphasis
on personal selling
• Justify an emphasis
on mass media
4-8
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Types of B2B Customers
• Commercial enterprises
• Government bodies
• Institutions
4-9
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Figure 4.2 A Clothing
Manufacturer and its Suppliers
Suppliers
of labour
Suppliers of
raw materials
and
components
Suppliers of
manufacturing
equipment
Manufacturer
Suppliers of
services
4-10
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Suppliers of
other equipment
and supplies
Characteristics of B2B Markets
Nature of demand
Structure of demand
Complexity of
buying process
Buyer-seller
relationships
4-11
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Derived Demand
Goodyear’s
RunOnFlat Tyres are
featured on
•BMWs,
•Ferraris,
•Corvettes,
•Maseratis, and
•Mercedes
Source: © Goodyear Dunlop Tyres Europe
B.V. http://eu.goodyear.com
4-12
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Joint Demand
Demand for
Samsung’s Solid
State Disk (SSD) is
tightly coupled with
the demand for
computers and other
devices with memory
chips
4-13
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Inelastic Demand
Elasticity of demand refers to the
extent to which the quantity of a
product demanded changes when
its price changes;
If a product has inelastic demand,
demand does not change due to
price changes
4-14
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Should a company purchase
from multiple suppliers?
Supplier categories at Phillips:
• Supplier-partners
• Preferred suppliers
• Commercial suppliers
4-15
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Advantages of Single Sourcing
• Improved
communications
• Increased
responsiveness
• Shared design of
quality control
systems
• Elimination of
supplier switching
costs
4-16
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
• Improvement in
product cost
effectiveness
• Reduced prices
through larger volume
• Reduced prices
through reduced
supplier costs
• Enhanced ability to
implement JIT
systems
Disadvantages of Single
Sourcing
• Increased costs
through lack of
competitive
pressure
• Increased supply
vulnerability
4-17
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
• Reduced market
intelligence and
flexibility
• Improved supplier
appraisal capacity
Advantages and Disadvantages
of Multiple Sourcing
Advantages
Disadvantages
• Increased
competitive pressure
• Perceived lack of
commitment
• Improved supply
continuity
• Increased costs
• Improved market
intelligence
• Improved supplier
appraisal
effectiveness
4-18
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
• Less supplier
investment
• Reduced willingness
to adapt
• Higher operating
costs
Purchase Significance
New Task
Modified
re-buy
4-19
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Routine
re-buy
Buying Decision-Making Process
Precipitation
Product
specification
Supplier
selection
Commitment
4-20
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Roles in the Buying Process
• Purchasing - handle relationships with suppliers
• Production/operations - meeting targets for the
end product in both quantity and quality terms
• Engineering - the specification and design
• Research and Development (R&D) – look for
new solutions to problems
• Finance - devolve budgets to appropriate
managers
• Marketing - outputs of the production process
4-21
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Buyer-Seller Contact in B2B
Markets (Unit Production Model)
Supplier
Buyer
Production engineering
Production engineering
Design
Design
Sales
Purchasing
Quality
Quality
etc.
etc.
Source: Adapted from Johanson (1982), copyright 1982 © John Wiley & Sons Limited. Reproduced with permission.
4-22
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Buyer-Seller Contact
(Mass Production Model)
Production engineering
Design
Sales
Purchasing
Quality
etc.
Source: Adapted from Johanson (1982), copyright 1982 © John Wiley & Sons Limited. Reproduced with permission.
4-23
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Figure 4.7 Commodity Positioning
Matrix
4-24
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Buying Centres
Consumer
B2B
Initiator
User
Influencer
Influencer
Decider
Decider
Purchaser
Buyer
User
Gatekeeper
4-25
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Buying Criteria:
Economic Influences
Appropriate
prices
Product
specification
Quality
consistency
Supply reliability
and continuity
Customer
service
4-26
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Buying Criteria:
Non-Economic Influences
Prestige
Career security
Friendship
Other
personal needs
Trust
4-27
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Approaches to Supplier Handling
Adversarial
Collaborative
•
Multiple suppliers
•
Few suppliers
•
Regular price quotes
•
Long-term relationship
•
Adversarial negotiations
•
Partnerships
•
Sporadic communication
•
•
Little cooperation
Frequent, planned
communication
•
Quality and time scales to
meet lowest expectations
•
Integrated operations
•
Quality and time scales
‘designed in’
•
Emphasis on lowest overall
cost
•
Emphasis on lowest unit
price
4-28
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Relationship Life Cycle
Awareness
Exploration
Expansion
Commitment
Dissolution
4-29
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Key Terms_1
• Activities directed towards marketing by one
organisation to another are called _____.
B2B marketing
• A group of individuals that contribute towards or
take direct responsibility for organisational
purchasing decisions is called a _____.
Buying centre
• Another term for buying centre is _____.
Decision making unit
4-30
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Key Terms_2
• What form of demand for products or
components in B2B markets depends on
consumer demand further down the chain?
Derived demand
• What form of demand for one product or
component in a B2B market is dependent on the
supply or availability of another?
Joint demand
4-31
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Key Terms_3
• A _____ occurs when goods and services are
purchased relatively infrequently by
organisations that reevaluate their choices
before making a repeat purchase decision.
Modified re-buy
• _____ is the sourcing of a particular B2B product
from more than one supplier simultaneously.
Multiple sourcing
4-32
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Key Terms_4
• _____ occurs when products are purchased
infrequently by organisations, and involve a high
level of formalised information collection and
analysis before a purchasing decision is made.
New task purchasing
• The criteria to which an organisational purchase
must conform in terms of quality, design,
compatibility, performance, price, etc is called
_____.
Product specification
4-33
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Key Terms_5
• _____ refers to an organisation's preferences,
systems, and procedures for purchasing.
Purchasing policy
• The evolution of buyer-seller relationships in B2B
markets, through stages including awareness,
exploration, expansion, commitment and
dissolution is called the _____.
Relationship lifecycle
4-34
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006
Key Terms_6
• A _____ occurs when products are purchased
frequently by organisations from established
suppliers, with little or no formal decision-making
involved in the repeat purchase.
Routine re-buy
• The sourcing of a particular B2B product from
only one supplier is called _____.
Single sourcing
4-35
Brassington & Pettitt, Principles of Marketing 4e, © Pearson Education 2006

similar documents