4MD3 Business Marketing Management B2B

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4MD3Business Marketing Management B2B

• Steve Howse
• January 11, 2007

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Administration

• Key dates
• World Congress Bonus Marks
• TA Derek Weidl
• http//www.business.mcmaster.ca/courses/com4md3

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Preview Nature Of Business Marketing

• BM transaction definition
• other names for BM
• who buys from business marketers?
• what do they buy?
• why do they buy?
• the BM process 
• differences between business marketers and
  consumer marketers   

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INTRO TO BUSINESS BUYER BEHAVIOUR

• well be looking at BBB for three full weeks!
• BM/CM differences
• relationships
• theories
• why is knowledge of BBB so important?  
•   

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INTRO TO BBB (CONTD)

• who are the buyers in BBB? 
• organizations
• individuals in them, acting alone or in groups
• purchase motivation thus very complex

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PREVIEW OF BM/CM DIFFERENCES

• demand
• buyer purchase criteria
• buyer behaviour
• buyers

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BM/CM DIFFERENCES DEMAND

• all business demand ultimately derived from
  consumer demand
• joint demand more common  
• elasticity lower at industry level  
• but elasticity same at company level owing equal
  ease of switching suppliers (contd)

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FACTOR AIDING SWITCHING - LOWER PRODUCT
DIFFERENTIATION

• less processing
• higher design input by customers
• more industry design codes
• products less styled
• less packaging

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FACTORS OPPOSING SWITCHING

• strong customer relationship with supplier
• high cost to customer of switching

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DEMAND (CONTD)

• business demand more cyclic
•  
• so prices more cyclic  
• as is the buyer-seller power balance  

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BM/CM DIFFERENCES - BUYER PURCHASE CRITERIA

• more stress on product function
• thus different response to failure
• also more stress on product quality
• and on custom design of the product
• and on product delivery
• less stress on price 
• (contd)  

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BUYER PURCHASE CRITERIA (CONTD)

• written contracts more often required
• heavier penalties for non-performance
• more concern about tax implications
• more stress on reciprocity

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BM/CM DIFFERENCES BUYER BEHAVIOUR

• more people involved
• not spending own money
• behaviour more rational
• behaviour more formal
• purchase process longer
• want closer relationships
  (contd)  

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BUYER BEHAVIOUR (CONTD)

• more loyalty to the "in" suppliers
• repeat purchases more common
• "multiple sourcing" more common 
• "make" option more feasible
• purchases larger but less frequent
• in-store buying rare  

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BM/CM DIFFERENCES - BUYERS

• far better informed and trained
• use sophisticated purchasing software
• often experts in your product
• often teach suppliers
• fewer in number
• but each bigger on average
• more concentrated geographically  

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BUSINESS BUYER BEHAVIOUR CEs vs. NPIs/GOVERNMENTS

• different organizational objective
• implication for business marketers
• implications for buying behaviour

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DIFFERENT BUYING OBJECTIVES FOR NPIs/GOVERNMENTS

• satisfy political goals
• increase employment
• implement policy 
• develop personnel
• maintain budget allocation
• please other governments

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FOR NPIs/GOVERNMENTS(Cont)

• domestic suppliers favoured
• more caution in general
• more price-sensitivity
• more bureaucracy
• responsiveness to political donations

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Preparing a Case

• Read it once
• Read the questions
• Read again with a hi-liter
• Write out the question
• Prepare bullet talking points
• Check them off as you go
• Make memory jogger notes so you can listen
  effectively
• Read your notes if you have too
• Jump start, add and relate, contradict or
  direction change, summarize with a conclusion

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Steves Tips

• Interview Skills
• Be early
• Dress professionally (focus on detail)
• Bring resume, business card
• Firm handshake, eye contact
• Think about your answers
• Ask questions
• Take notes