Slide 8.

Business-to-business marketing
Chapter 8
 Slide 8.2

Typical transactions of business markets

Figure 8.1 Business transactions involved in producing and distributing a pair of

shoes
Slide 8.3

Characteristics of business markets

Business markets differ from consumer markets by
structure and demand
Geographically concentrated
e.g. London for Financial services
Derived demand
Derived from the demand for consumer goods.
Inelastic demand
Total demand for a product that is not much affected by price
changes, especially in the short-term.
Fluctuating demand
Small change in consumer demand may result in large
business demand.
Slide 8.4

Nature of the purchase unit

More buyers
More professional purchasing process
Slide 8.5

Types of decision and the decision process

Business buyers generally involved in more complex

buying decisions
Buying process more formalised
Buyer and seller more dependent upon each other
Sellers frequently customise the products for the
buyers
Build close long-term relationships
Proactive planning
Slide 8.6

Other characteristics of business markets

Direct purchasing
Fewer intermediaries
Reciprocity
Leveraging products and services in associated
companies
Leasing
Predominantly in capital equipment, cash flow
management and tax advantages as well as upgrade
facilities
 Slide 8.7

Model of business buyer behaviour

Figure 8.2 A model of business buyer behaviour

 Slide 8.8

Business buyer behaviour

Figure 8.3 Three types of business buying situation

Source: Ben M. Enis, Marketing Principles, 3rd edn (1980). 1980 Scott, Foresman & Co.
Slide 8.9

Main types of buying situation

Straight re-buy
Routinely reorders something without
modification
Modified re-buy
Buyer needs to modify product specifications,
prices, terms or suppliers
New task
Order product or service for the first time
Slide 8.10

Participants in the business buying process

Buying centre
Users
Influencers
Buyers
Deciders
Gatekeepers
 Slide 8.11

Figure 8.4 The main inuences on business buying behaviour

Slide 8.12

Main influences on business buyers

Environmental factors
Economic environment influencing demand, interest rates etc.
Organisational factors
Upgraded purchasing mechanisms e.g. electronic data
interchange
Strategic materials management, TQM and JIT
Centralised purchasing
Long-term contracts
Purchasing performance evaluation
Interpersonal factors
Individual factors
Every buyer has unique personal attributes that will affect the
process.
 Slide 8.13

Table 8.1 Key stages of the business buying process in relation to important
buying situations
Source: Adapted from Patrick J. Robinson, Charles W. Faris and Yoram Wind, Industrial Buying and
Creative Marketing (Boston: Allyn & Bacon, 1967), p. 14.
Slide 8.14

How do business buyers make their buying

decisions?
Problem recognition
General need description
General characteristics and quantity needed
Product specification
Value analysis approach to cost reduction.
Supplier search
Key attributes specific to value adding partnerships
Proposal solicitation
Formalised process of quotations
Supplier selection
Preferred supplier status
Order-routine specification
Order generation
Performance review
Rating of supplier performance against set criteria
Slide 8.15

Institutional and Government markets

Institutional markets
Schools, hospitals, nursing homes, prisons and other
institutions that provide goods and services to people in their
care.
Characterised by low budgets, captive patrons and often have
unique needs.
Government markets offer huge opportunities for
many companies due to volume and regularity of
demand.
Predominantly tender or bid driven and practices vary from
country to country.
High level of bureaucracy
Slide 8.16

Svara p frgorna 327.