Studied by 3 people
B2B Marketing and STP
B2B Markets include:
Resellers, Government, Institutions, and Manufacturers/service providers
B2B Marketing examples
Manufacturer —>Manufacturer
Manufacturer —>Reseller
Manufacturer —>Government and institutions
Reseller —>other businesses, government, and institutions
Service provider —>other businesses, government, and institutions
Is B2C or B2B bigger?
B2C dominates in terms of the number of customers and transactions, the B2B market is significantly larger in terms of total revenue and transaction value.
B2B: Government
One of the largest purchasers of goods and services. Includes local, state, and federal.
B2B Buying Process
Need recognition—>Product specification—>RFP process—>Proposal analysis, vendor negotiation, and selection—>Order specification—>Vendor performance assessment using metrics
Types of buying situations:
New Buy, Modified Buy, Straight Buy
New Buy
Most likely when purchasing for the first time and usually quite involved. probably uses all six steps in the buying process and involves many people.
Modified Rebuy
Purchasing a similar product but changing specifications such as price, quality level, customer service level, options, etc.Current vendors have an advantage and often skip RFP and vendor selection.
Straight Rebuys
Buying additional units of products that have been previously purchased. Most B2B purchases fall into this category. Usually, the buyer is the only member of the buying center involved
Stage 1: Need Recognition
Customer needs a product/service. Can be generated internally or externally
Stage 2: Product Specification
Create a list of potential specifications. Used by suppliers/ vendors to develop proposals
Stage 3: RFP Process (request for proposal)
Vendors or suppliers are invited to bid on supplying required components and services.
Step 4: Proposal Analysis, Vendor Negotiation, and Selection
The buying organization evaluates all the proposals received in response to an RFP. Pricing becomes an important compensatory factor.
Step 5: Order Specification
Firm places the order with its preferred supplier (or suppliers). It is known as PO (Purchase Order)
The exact details of the purchase are specified, including penalties for noncompliance. All terms are detailed, including payment.
Stage 6: Vendor Performance Assessment Using Metrics
Firms analyze their vendors’ performance so they can make decisions about their future purchases.
Who is involved in the buying center?
Initiator, Influencer, Decider, Buyer, User, Gatekeeper
Buying Center: INITIATOR
First suggests buying the product
Buying Center: INFLUENCER
Influences other members in buying decision
Buying Center: DECIDER
Ultimately determines the buying
Buying Center: BUYER
Handles the paperwork of the actual purchase
Buying Center: USER
Consumes or uses the product
Buying Center: GATEKEEPER
Controls information or access to decision-makers and influencer
What do we need to know about the buying center?
Who is the decider? Need to contact initiator/influencer to meet Decider. Satisfy Gatekeepers not to stop/block the sales process. Talk to Users to increase benefits and efficacy.
What are four components of Organizational Buying Culture?
Autocratic, Democratic, Consultive, Consensus
Buying Culture: AUTOCRATIC
One person makes the buying decision alone even though there may be multiple participants (e.g., small private company owned by one person)
Buying Culture: DEMOCRATIC
The majority rules (e.g., public institutions)
Buying Culture: CONSULTIVE
One person makes the decision but solicit input from others (e.g., large corporations)
Buying Culture: CONSENSUS
All members of buying center should agree to buy (e.g., some cooperatives)
Why do we do segmentation?
To enhance our understanding of customers and to aid targeting and positioning decisions
What are segmentation variables?
Splits the market into groups of current or potential customers who are likely to have similar needs with respect to our product or service. Many variables because customers differ in demographics, behaviors, attitudes, lifestyle, etc
Demographic Variables
Those which we can physically observe and measure. Age, gender, educational status, household size, income, etc. Readily available to access
Demographic variables have served as default segmentation variables for several reasons. Which of the following is not a reason?
Because they are physical variables, demographics are quite reliable. This means we can use them to predict the future; if the segment of 30- to 40-year-olds is quite large this year, it is reasonable to predict that the segment of 40- to 50-year-olds will become larger over the next 10 years
What are behavioral variables?
The variable that describes the specific actions of consumers or potential consumers. Usage: Heavy users and light users
Week-day users vs. weekend users
Coupon users vs. non-coupon users
Switchers vs. loyals
What are attitudinal variables?
Describes the thoughts, feelings, and beliefs of consumers. Attitudes drive behaviors. This data can be risky because attitudes can change.
Risk-averse vs. risk takers
Satisfied vs. unsatisfied
What are benefit variables?
Benefits that customers seek. The segmentation method most directly related to the satisfaction of consumer needs and wants. Marketers should choose/identify main benefit and dynamic benefit
Main Benefit
The primary benefit provided by the category that differentiates the category leader
Dynamic Benefit
A benefit used by a competitor to take share from the category leader
How to find the benefit variables?
1. Do anything to uncover needs and wants that are important.
(customer interviews or customer comment reviews)
2. See if the company can back up those benefits with product features.
Feature-benefit-value Ladder
Done by first listing the most important brand features, and then listing their connected benefits and values.
Features
An inherent physical or functional attribute of a product or service.
Benefits
Describes what the customer stands to gain from using the product or service. Benefits are directly linked to features. So, for example, if this book is available in digital form (feature), it will be easy to access (benefit).
Values
High-level attitudes or aspirations that help describe the status or image conferred to the user of the product (“I am an innovator,” “I am sophisticated,” “...”).
Benefit variables that make it to our segmentation short list:
(a) are most important to the customers in the category.
(b) are something our brand features can support to provide.
(c) have the potential to differentiate our brand in the category
What are different types of targeting strategies?
-Undifferentiated targeting strategy (mass marketing).
-Differentiated targeting strategy (multi-segment marketing).
-Concentrated targeting strategy.
-Micromarketing or one-to-one marketing.
When to adopt undifferentiated targeting?
When consumer tastes, needs, and wants are the same(Homogeneous market), when the company has a strong marketing power and resources, and when there is no strong competitor.
When marketers have to select one or several target segments, assess each segment is
Identifiable, Substantial, Reachable, Responsive, and Profitable
Segment Attractiveness: IDENTIFIABLE
Firms must be able to identify who is within their market to be able to design products or services to meet their needs.
Segment Attractiveness: SUBSTANTIAL
The market segment size should be substantial.
Segment Attractiveness: REACHABLE
Firms should be able to reach customers in the market segment.
Segment Attractiveness: RESPONSIVE
Customers in the market segment must react similarly and positively to the firm’s offering.
Segment Attractiveness: PROFITABLE
The market segment should be profitable. Consider the current market growth rate, future growth rate, market competitiveness, and market access costs.
Segment size adoption rate price purchasing frequency profit margin – fixed cos
How to describe the target customer?
Present a one-line description of the target and develop a persona of a typical target customer (Include Name, Habitat, Revealing behaviors, Consumption habits, Demographics, Attitudes, perceptions, values, aspirations, Benefits sought
What is positioning?
The answer to how a product/brand should be perceived in the market among target customers.
Positioning Statement
A statement of the desired image/value/benefit of offering to be perceived by customers, a crisp consumer proposition. This statement will marry our entity’s core competence and understanding of the target consumer.
STP HOW, WHO WHAT
v informs us how we will define and segment our market.
Targeting describes specifically whom we will attempt to reach.
Our positioning statement outlines what we will say to them.
Why is the positioning statement so important?
It is the final step on the bridge between strategy and execution. Marketing mix is then guided by positioning.
Note 
Flashcard (49)