Umesh Chandra

Introduction to Business-to-
Business
Business markets are
markets for products and services, local to international,
bought by businesses, government bodies, and institutions
(such as hospitals) for incorporation (for example,
ingredient materials or components), for consumption (for
example, process materials, office supplies, consulting
services), for use (for example, installations or equipment),
or for resale. The only markets not of direct interest are
those dealing with products or services which are
principally directed at personal use or consumption such as
packaged grocery products, home appliances, or consumer
banking.
TYPES OF BUSINESS MARKET CUSTOMERS
CHARACTERISTICS OF BUSINESS MARKET
CUSTOMERS
Comparing & Contrasting Industrial V/s
Consumer Marketing
Business Markets versus Consumer-
Goods Markets
Distinctive Capabilities
Managing Customers as Assets
Emphasizing a Profit Focus
Partnering for Increased Value
What matters most for B2B
Marketing
Derived Demand
Fluctuating Demand
Stimulating Demand
Price Sensitivity
A Global Market Perspective
Value Proposition
The value chain
Value is the sum of the benefits that a customer
receives in the process of buying and using the product
or services less the cost involved

Evaluated price: It is the total cost of owning and using

the product, which includes such as transportation,
inventory, financing costs etc.,

The value chain: is the chain of activities that creates

some thing of value to the customers.
Contribution to value
Supportive activities or Direct activities or
value enabling value creating

Infrastructure Input logistics

People management Operations
Technology development and Delivery logistics
management Service
Resource acquisition
Trends and changes in business
marketing
Hypercompetition
Formation of partner networks
Adoption of information technology and internet
Supply chain management
Time compression
Classification of b2b markets
Classification of customers
Classification of b2b products
A FRAMEWORK FOR BUSINESS MARKETING
MANAGEMENT
Organizational Buying Behavior

Consumer buying decision making process

Need recognition --- Information search

Evaluation of Alternatives Purchase decision Post
purchase decision
Buying center: collection of
individual who make
purchase decisions in the
organization
 Initiators who request the purchase of an item
User those who initiate and sometimes involved in the specification
process,
Influencer help to set the technical specification for proposed
purchase and to evaluate alternative potential supplier,
Decider who make purchase decision and are sometimes difficult to
identify. They may not have formal authority to make a purchase
decision, but may have sufficient influence internally in purchase
decision.
Buyers - Select suppliers and manage the process whereby the required
products are procured. They also influence the frame work with in which
the decision is made.
Gate keepers - Have the potential to control the type and flow of
information to the organization and the members of the Decision
Making Unit.
Different disciplines contributing to the
buying center
 Forces Influencing Organizational Buying
Behavior Economic Outlook:
Domestic & Global
Environmental Pace of Technological
A projected change in Change
business conditions Forces
Global Trade Relations
can drastically alter
buying plan. Goals, Objectives, and
Organizational Strategies
Forces Organizational Position
Organizational of Purchasing
Buying
Behavior Roles, relative
Group influence, and patterns
Forces of interaction of buying
decision participants

Job function, past

Individual experience, and buying
Forces motives of individual
decision participants
 2. General
1. Problem 3. Product
Description
Recognition Specifications
of Need

5. Acquisition
4. Supplier Organizational and Analysis
Search of Proposals/
Buying Process Proposal solicitation

7. Selection
6. Supplier 8. Performance
of
Selection Review
Order Routine
Three Buying Situations

1. New task
2. Modified rebuy
3. Straight rebuy
Three Buying Situations
1. New Task

New taskthe problem or need is totally different

from previous experiences.
Significant amount of information is required.
Buyers operate in the extensive problem solving stage.
Buyers lack well defined criteria.
Lack strong predispositions toward a solution.
Three Buying Situations
2. Modified Rebuy

Modified rebuydecision makers feel there are

benefits to be derived by reevaluating alternatives.
Most likely to occur when displeased with the
performance of current supplier.
Buyers operate in the limited problem solving stage.
Buyers have well defined criteria.
Three Buying Situations
3. Straight rebuy

Straight rebuythe problem or need is a recurring

or continuing situation.
Buyers have experience in the area in question.
Require little or no new information.
Buyers operate in the routine problem solving stage.