B2B Relationship Development Quiz

2024 Business to Business Marketing Notes

• Covid 19 is real: Stay at home (if possible), Mask up, Maintain Social distance and Sanitize
• Prescribed material: IMM Graduate School. (2024) BBM001B, Business to Business marketing e-study Guide. South Africa: IMM Graduate School

Introduction to Business to Business Marketing

• B2B marketing environment is different from the general Business-to-consumer (B2C) marketing environment.
• B2B marketing has an increased focus on relationship building.
• Design and development of the marketing mix within a B2B context is more complex.
• B2B marketing involves inter-organisational relationships.
• B2B marketing communications need to be adapted to the unique characteristics of this particular type of marketing environment.
• Business-to-business markets are sometimes referred to as Industrial Markets.
• Business-to-Business Marketing refers to markets for products and services, local to international, bought by businesses, government bodies, and institutions for incorporation, consumption, use or resale.
• B2B marketing describes the transactions (products and services) that take place between businesses for purposes other than general consumption.
• B2B marketing is defined as the behind-the-scenes transactions that take place in the production and delivery of goods and services to the final consumer.
• Illustrative product example: Cotton, Spinning, Weaving, Tailoring, Distribution, Shirt

Similarities and Differences between B2B and B2C Markets

• Basic principles of marketing apply to both B2B and B2C markets.
• In B2B markets, the customer is an organisation.
• In B2C markets the customer is an individual person.
• Illustrative B2B to B2C table given in file

Dimension of similarity

• Product, Price, Promotion, Place, People, Process, Physical evidence, Satisfying customer needs, Segmentation, targeting and positioning, Customer acquisition, Customer retention, Customer insight
• Key Differences: Derived demand, Fluctuations of demand, Joint demand

Types of B2B Customers or Buyers

• B2B buyers can be non-profit organisations or businesses who aim to make a profit.
• B2B customers are categorized into four basic types: Resellers, Producers, Government, Institutions
• Resellers: Individuals or businesses that purchase products or services produced by other businesses with the intention of selling these products or service to another party for a profit.

Types of Products in Business-to-Business Marketing

• A product is a physical good that is produced to satisfy a want or need.
• A service is an intangible offering that is delivered to satisfy a want or need.
• B2B products can be classified into different groups: Capital goods, Revenue items

B2B Reason to Buy & Corresponding Product

• Reason to Buy, Type of Product
• Incorporation, Raw and processed materials; Component parts.
• Use, Maintenance, repair, and operations supplies; Capital goods; Tools and accessories; Services; Systems
• Resale, Finished goods

Business-to-Business Services

• Business services include intangible products businesses buy to facilitate their production and operating processes e.g. advisory support and financial services.
• Pure service: Only service with no product offering such as recruitment or tax consulting
• Product offering accompanied by a service: This is a combination of product and service. Services that support products for example repair and maintenance of machinery where parts and labour are needed.
• Defining characteristics of a service offering (Service Quality criteria or dimensions): Reliability, Assurance, Responsiveness, Empathy, Tangibles

Pricing in Business-to-Business Marketing

• Pricing is not something that is just “thought up” based on gut feeling but it is a process that includes careful research.
• Interdependence of pricing with the other elements of the marketing mix
• Setting prices that will be agreeable to others within the supply chain including the including the final consumer
• Differences between B2B and B2C pricing practices.
• B2B buyers usually don't use their own money.
• Purchases are made within a business' budget
• B2B buyers are spending business funds based on clear specifications where all decisions need to be justified.
• Buyer is held accountable for any purchases made.
• B2B buying process tends to be more complex.
• A B2B purchase decision is influenced by more than one member of the buying organisation involved.
• A formal process that needs to be followed and more time allowed for the final decision to be made.
• Cost and risk involved in business buying decisions also makes the process more complex
• B2B buyers are acting in their professional capacity:
• B2B buying process is more formal, the decisions made are more serious, the costs involved are generally high and there are more risks involved.
• B2B marketers need to be transparent in their pricing clearly indicating where value is being added, and what benefits are being offered to the B2B buyer at what costs

The Role of Supply Chain Management in Business-to-Business Marketing

• Supply chain management concept implies that there is a chain of suppliers.
• Supply chain management is the management of the flow of goods and services from the point of origin to the point of consumption.
• Supply chain brings producers and consumers together by providing the right product at the right time and in the right place
• In the supply chain: Raw materials are sourced from suppliers; Products are produced and kept in stock; Goods are delivered;

Relationship Building in Business-to-Business Marketing

• Relationship building is the development of long-term relationships with business-to-business customers with the primary goal of providing value-added services and products.
• It is argued that in the end relationships are what makes a business-to-business organisation successful.
• Relationships are built over time and in stages. Dainty (2014) identified five stages or tiers of B2B customer relationship building.

Inter-Organisational Networks & Relationship Building

• Inter-organisational networks refer to B2B organisations interacting with multiple stakeholders in a network of relationships.
• B2B marketing requires businesses to interact with one another as well as other stakeholders in order to deliver the best possible value and satisfaction to the final consumer
• Interaction leads to networks of interdependent organisations
• The ability of a B2B marketer to achieve the objectives set will be dependent on the inter-organisational network it belongs to, as well as its position within that network
• Benefits of inter-organisational networks: Greater impact, More resources, New and better ways, Shared risk, Sharing of costs

Marketing Communication in Business-to-Business Marketing

• Marketing communication is the “collection of all elements of a brand's 4Ps (Product, place (distribution), price, and promotion)
• Dibb et al (2019) explained marketing communication as the strategies an organisation uses to create awareness and persuade customers.
• DRIP model: the four objectives for marketing communications

The Role of B2B Marketing

• Strategic importance of B2B marketing:
• Marketing influences the entire organisation
• The vision and mission of a B2B organisation will impact the direction the B2B marketers will follow
• B2B marketers act as information sources
• B2B marketers are also involved in setting objectives
• B2B marketers are responsible for converting general organisational objectives into marketing-specific goals and strategies
• Example of Organisation objective and marketing strategy

Business-to-Business Marketing Mix: Product

• A product is essentially the item that an organisation offers to the customer
• A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services and ideas.
• Products can be viewed as consisting of three layers: Core benefit, Actual product, Augmented product

Business-to-Business Marketing Mix: Place

• The place element of the marketing mix is concerned with the delivery of the physical product or services to customers,
• Direct and indirect distribution channels for consumer and industrial goods.
• Complete supply chain

Test your knowledge on the phases and goals of relationship development in B2B marketing. This quiz covers key concepts, benefits of inter-organizational networks, and factors influencing innovation. Perfect for marketers looking to deepen their understanding of B2B dynamics.