Lecture 3 Business to Business Marketing
Page 1: Introduction
Marketing 222: Marketing Fundamentals - Lecture 3
Focus: Business to Business/Organizational Marketing
Presented by Dr. Alan Gilchrist (a.gilchrist@lancaster.ac.uk)
Page 2: Definition of B2B Marketing
What is Business to Business (B2B) Marketing?
Defined as the management process facilitating exchanges between producers of goods/services and organizational customers.
Example: Tyre manufacturers (B2B) selling to retail outlets (B2C).
Page 3: Understanding Business Customers
Diverse categories of business customers exist.
Example: Schools require toilets, which need supplies (water, tissue, soap) from various suppliers.
There are large-scale "super buyers" in business settings who procure significant items in bulk.
Page 4: The Invisible Supply Chain
Questions posed:
Why can we have avocados year-round?
How come clothing from Primark and Shein is so cheap?
Page 5: Dimensions Defining a Business
Example Dimensions:
Ship Owners International Paint & Operators:
Marine Coatings
Customer Protection
Decoration Paint
Customer Technology Needs: Lancaster University Management School.
Page 6: Market Structure and Demand
B2B marketers work with fewer but larger buyers compared to B2C marketers.
The success of larger organizations in B2B relies on a few significant buyers.
Derived Demand: Demand for B2B products stems from consumer demand (e.g., HP and Dell need Intel processors for laptops).
Page 7: B2B Emphasis on Solutions
B2B focuses less on individual products, more on comprehensive solutions.
Packages include physical products, services, advice, adaptation, and logistics.
Page 8: Differences Between Business and Consumer Markets
B2B purchases are more complex, involve multiple decision participants, and necessitate professional purchasing efforts.
Supply management functions are now prevalent, employing skilled marketers to handle super buyers.
Page 9: Mutual Relationships in B2B
Marketing and purchasing are interconnected.
The buying process can involve significant complexities, requiring substantial investment to finalize deals.
Transactions are interconnected, emphasizing a mutual dependence within the supply chain.
Page 10: Long-Term Commitments
In situations like HS2, lasting relationships are crucial to recouping values on both sides due to high initial costs (design, legal, engineering fees).
Page 11: Buying Situations and Their Complexity
Three types of buying situations:
Straight Rebuy
Modified Rebuy
New Task
As the situation complexity increases, so does uncertainty and opportunity for new solutions.
Page 12: Organisational Decision Processes
Complexity increases with buy type:
High Involvement: Larger group, higher decision complexity, longer time, etc.
Medium Involvement: Moderate complexities in terms of decision criteria and importance.
Low Involvement: Straight Rebuy and Modified Rebuy classifications.
Page 13: Seeking Solutions over Products
A business marketer needs to deliver a well-rounded offering tailored to customer needs.
Solutions are intertwined with values and sustainability aspects.
Page 14: Value Proposition as a Solution
An offering's value is its ability to solve specific customer problems.
Variations might exist based on customers' unique needs even if the core product is the same (e.g., aircraft customization).
Page 15: Importance of Customer Insight
Identifying key customer challenges:
Cost struggles
Lost business opportunities
Process improvement potentials
Risk reduction in downstream markets
Value creation through enhanced offerings.
Page 16: B2B Selling Focus
B2B is about solutions rather than just product features.
Sellers must focus on features, benefits, and incentives rather than merely listing product features.
Page 17: Understanding Firms as Customers
Key factors in the buying team:
Understanding and assessing roles within the team.
Identifying who makes final purchase decisions and how evaluations of suppliers are conducted.
Page 18: Influence of Internal Decision Makers
Identify all internal decision-makers and strategize the influence they have on the purchasing process.
Page 19: Complexity of B2B Relationships
Business relationships involve numerous interconnections ('micro-relations') at various organizational tiers, including:
Corporate, division, unit, and plant levels.
These relationships encompass commercial, technical, legal, social, and ethical dimensions.
Page 20: Understanding the Buying Stack
Importance of comprehending the entire buying team, including their values and influence points.
Page 21: Building the Value Stack
Create a Value Stack by educating all units about the offerings' total value to their organization.