B2B Marketing Overview

B2B Marketing

• B2B marketing focuses on businesses buying goods and services for use in their own operations or resale.

Organizational Markets

• Markets where companies buy goods and services.
• Types of organizational buyers include:
  • Industrial firms
  • Resellers
  • Government units
  • Non-profit organizations

Organizational Buyers

• Industrial firms process products before resale.
• Resellers are wholesalers and retailers who resell goods without reprocessing.
• Government units buy for their constituents.
• Non-profit organizations provide goods and services for society.

Characteristics of Organizational Markets

• Market Structure: Fewer, larger buyers geographically concentrated.
• A small number of customers account for a large portion of sales.
• The market size is usually considerably larger than consumer markets.

Demand in Organizational Markets

• Derived Demand: Demand for industrial products is driven by demand for consumer products.
• Inelastic Demand: The price change of B2B products does not significantly affect the quantity demanded.
• Fluctuating Demand: Business product demand fluctuates more than consumer product demand.

Characteristics of Organizational Markets - Order and Decision Process

• Purchase orders are typically larger than consumer purchases.
• Multiple people are involved in the buying decision.
• Decision-making processes are more complex, formalized, and reliant on many factors.
• Decision time is usually longer due to complexity. Involves higher risk.

Organizational Buying Behaviour

• B2B products/services are technically complex. Bought based on specifications.
• Time, technical support, and pricing are important considerations.
• Buying procedures are established and followed by qualified buyers.
• Explicit buyer criteria and seller evaluation procedures exist.
• Internet purchasing is common.

Organizational Buying Risk

• Organizational Risk: Risk associated with working with a particular organization.
• Personal Risk: Risk of being reprimanded for a wrong decision.

Organizational Buying Process

• The process consists of several steps, from problem recognition to post-purchase evaluation. Involves information gathering, evaluation of alternatives, and purchase decisions.
• Stages: Problem recognition, information search & value assessment, evaluation of alternatives & value assessment, purchase decision & value assessment, post-purchase behavior, and outcome evaluation. Detailed activities within each stage can include product specification, supplier search, proposal solicitation, supplier selection, order routine specification and performance review.
• Different buying roles exist within the buying center:
  • Users,
  • Gatekeepers,
  • Influencers,
  • Deciders,
  • Buyers

Organizational Buying Situations

• Different buying situations exist:
  • Straight rebuy,
  • Modified rebuy,
  • New buy