UNIT 4 Strategic Marketing: Industrial Markets PDF

UNIT-4.pdf andreeafdeez Estrategia de Marketing 2º Grado en Comercio y Marketing Facultad de Comercio, Turismo y Ciencias Sociales Jovellanos Universidad de Oviedo Reservados todos los derechos. No se permite la e...

UNIT-4.pdf andreeafdeez Estrategia de Marketing 2º Grado en Comercio y Marketing Facultad de Comercio, Turismo y Ciencias Sociales Jovellanos Universidad de Oviedo Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6570093 UNIT 4 STRATEGIC MARKETING: INDUSTRIAL MARKETS 1. CHARACTERISTICS OF BUSINESS MARKETS A business market comprises all the organizations that buy goods and services to use them in the production of other products and services, or for the purpose of reselling or renting them to others at a profit. you are using what you buy to sell to others. Europe cars rent to businessmen to sell, which is a business exchange. The difference between business or consumer exchange: who is buying and for what. Tires sell to companies and tire shops (business) and then they sell to customers (consumer) SIMILARITIES TO CONSUMER MARKETS: - Both involve people assuming buying roles - Needs are needed There is always some psychology and there’s always a need. Typical need in business exchanges: economic (you buy something that helps you provide a value proposition to others with profit). DIFFERENCES TO CONSUMER MARKETS - Market structure and demand - Nature of the buying unit - Types of decisions - Decision process. MARKET STRUCTURE AND DEMAND: - Far fewer but larger buyers: Tires: millions of consumers (Renault will buy much more than customers) that is why businesses are better for relationship marketing; it is difficult to invest in relational marketing with individual consumers because the money you make from customers is so small that you cannot invest in a relation. - Geographically concentrated: Luxury firms concentrate in Paris, NY, Milano. Petrochemicals and synthetic fibers around Rotterdam or Amsterdam. - Derived demand: tire manufacturers buy rubber depending on how many tires they are selling which depends on how many cars Renault, seat, etc., are expecting to sell. - Inelastic demand (esp. in the short term). a drop in rubber’s price will not shift Michelin’s demand for it. You don’t buy just because the price went down; very different than in consumer market (if there is a promotion of yogurts, you may buy more). - Fluctuating demand: in many cases, the stocks accumulate and every time there’s a little disturbance in sells it goes back and back and the accumulation gets bigger and bigger. - NATURE OF BUYING UNIT: - Business purchase involves: o More decision participants o More professional purchasing effort - The more complex the purchase, the more likely is that several people will participate in the decision-making process. - Buying committees to decide what is right with: Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6570093 o Technical experts o Top management TYPES OF DECISIONS: - More complex. if I don’t like a bottle of water, the risk is 1€, but if I buy a machine, it is very risky. o Large sums of money o Complex technical and economic considerations Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. o Interactions among many people - More formalized o Detailed product specifications o Written purchase orders o Supplier approval PO (purchase order): hoja de pedido. Order number, Price, date of payment, quantity, items, shipping address… incoterms. BUYING PROCESS water bottles: I, as an individual customer, am not dependent on the brand and the brand is not dependent on me, but, if it’s an important customer, they are dependent. - Buyer and seller are much more dependent on each other - B2C keeps a distance - B2B distance is arm’s length close between buyer and seller, but not so much, but still may require close working together o Customizing Adapt to the needs of consumers when the business is relevant, e.g., use screwcaps instead of cork for a certain customer. The size of the business makes the possibility to collaboration (that is why relational business happens mostly in B2B) o Helping customer to solve their needs o Providing ad-hoc after-sale support. - B2B is the perfect ambient to let relationship marketing building. If you’re selling to someone that is reselling, you have to charge a price so that the buyer is able to make a profit, so sells have to be for everyone in order to stay in the long run. 2. THE BUSINESS BUYING PROCESS Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for its use in the production of other products and services that are sold, rented, or supplied to others. Problem General need Product Supplier recognition description specification search Proposal Supplier Order-routine Performance solicitation selection specification review ¡Trae a 10 colegas al Halloween de PortAventura Park y... La entrada os saldrá solo por 25€ a cada uno! Estrategia de Marketing Banco de apuntes de la a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6570093 PROBLEM RECOGNITION - Someone in the company recognizes a problem or need that can be met by acquiring a specific product or service. o Internal stimuli: we are about to launch a new product, and this means a new machine or a new raw material. I notice that I don’t offer any Australian wine. o External stimuli. We have been to a trade show, and we could improve our offer by adding a new feature by means of this new component. I went to a fair and I tasted an Australian Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. wine that I like. GENERAL NEED DESCRIPTION: - Buyer prepares a document in which the characteristics and quantity of the needed item are listed. o Checking with production department. Sellers in a retailer company (is it going to sale?) o Checking with accountancy department. Can we afford selling it? PRODUCT SPECIFICATIONS: - The buying organization develops the item’s product specifications: value analysis. I want a projector that is good for the space I have, reliable, consumption, colors… you prepare a document (we need 40 projectors with this xt, 20 with those xt…) then search suppliers. SUPPLIER SEARCH: who can sell projectors? Maybe you have from the past or look for new ones. Websites, magazines… - Finding the best vendors for the required item o The newer the buying task o The more complex and costly the item o … the greater the amount of effort that would be put in finding the right supplier. PROPOSAL SOLICITATION: - Buyer invites qualified suppliers to submit proposals, ranging from: o Price lists, catalogues (simple) o Ad-hoc propositions SUPPLIER SELECTION You go for one supplier. - Buying department will rank suppliers using: in big companies, suppliers are ranked: first G, if everything goes well, the second you are F… if you are A, they know you are a safe bet. o Quality products and services o On-time deliveries o Ethical corporate behavior o Honest communication and prices o Repair and servicing capabilities o Technical aid and advice o Performance history and reputation. ¡Trae a 10 colegas al Halloween de PortAventura Park y... La entrada os saldrá solo por 25€ a cada uno! a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6570093 ORDER-ROUTINE SPECIFICATION - Preparing the final order (PO): o Listing items, tech specifications, quantities o Expected time of delivery o Returns and warranties PERFORMANCE REVIEW: - Buying department will contact users (within the company): o Asses their satisfaction o Decide whether to go on with the purchase or not o Monitor the usefulness of the purchased items. 3. TYPES OF BUYING SITUATION AND PARTICIPANTS IN THE BUSINESS BUYING PROCESS If something works you buy again, if not, you modify. Straight rebuy: reordering something without any modifications. Modified rebuy: buyer wants to modify: I didn’t like it so much, do you have another type?. The purchase is not good enough for the customer. o Product specifications o Prices o Terms o Suppliers New task situation: the greater the costs or risks o The larger the number of decision participants o The greater the effort to collect information PARTICIPANTS IN THE BUSINESS BUYING PROCESS USERS - Members of the organization who will use the product or service production - They may be the initiators of a buying process department - Help to define specifications INFLUENCERS - Provide information for evaluating alternatives. Someone that advises. - Technical profile. Expert on that. BUYERS - Formal authority to select suppliers and terms of purchase buying - Select vendors and negotiate department - Formal or informal power to select buyers or offers DECIDERS - In routine purchases, buyers and deciders may coincide. the people that have the power to say: yes we buy, no we don’t buy. - Control the flow of information to others. they filter information. When you’re buying, you don’t want to show all your GATEKEEPERS cards; this happens in B2B and B2C. companies have to buy what they need without telling suppliers what they are into, because they supply other companies too. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6570093 MAJOR INFLUENCES ON BUSINESS BUYERS: business buyers are human and social as well. ENVIRONMENTAL ORGANIZATIONAL Economic developments INTERPERSONAL Objectives Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. INDIVIDUAL Supply conditions Authority Policies Age technological change Status income Buyers Procedures education Political and regulatory Empathy job position developments Organizational personality structure Persuasiveness risk attitudes Competitive developments Systems Culture and customs ¡Trae a 10 colegas al Halloween de PortAventura Park y... La entrada os saldrá solo por 25€ a cada uno!