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marketing > Chp 5: business to business marketing > Flashcards

Chp 5: business to business marketing Flashcards

1
Q

define business to business (B2B) marketing

A

process of buying and selling goods or services to be used in the production of other goods and services, for consumption of the buying organization, or for resale by wholesalers and retailers

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2
Q

what is the difference between B2B and B2C

A

not the product/service but rather the ultimate purchaser/user of that product/service

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3
Q

LO1: just like B2C, what does B2B focus on and give example

A

Just like B2C, B2B focus their efforts on serving specific types of customer markets to create value for those customers ex. Shopify helps companies establish online stores

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4
Q

LO1: what do many firms find it productive to do?

A

focus on key industries or market segments rather than on ultimate consumers

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5
Q

LO1: 4 B2B markets

A

resellers, institutions, government, manufacturers

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6
Q

LO1: B2B markets - 2 points to manufacturers/producers

A

1) Manufacturers buy raw materials, components and parts that allow them to manufacture their own good
2) Many B2B companies are demanding, as a condition for doing business, that suppliers demonstrate a social responsibility

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7
Q

LO1: B2B markets: define resellers

A

marketing intermediaries that resell manufactured products without significantly altering their form

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8
Q

LO1: B2B markets - 4 examples of resellers

A

1) Example: wholesalers buy jeans from Levi and sell to retailers and those retailers sell to consumers
2) Wholesalers, distributors, retailers are all resellers

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9
Q

LO1: B2B markets - 2 points to institutions

A

1) Like hospitals, universities

2) Purchase goods and services for the people they serve

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10
Q

LO1: B2B markets - 1 point to government

A

Tends to be one of the largest purchasers of goods/services

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11
Q

LO1: 3 key challenges of reaching B2B clients

A

1) marketers must identify the right persons/decision markers within org who can authorize or influence purchases
2) they must understand the buying process of each potential client
3) they need to identify the factors that influence the buying process of potential clients

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12
Q

LO1: example of key challenging of reaching B2B clients

A

institutions like universities tend to have small budgets so seek best value when buying products/services for org. Unlike governments with large budget but they have are subject to public scrutiny on purchases

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13
Q

LO1: how can marketers avoid the challenge of reaching B2B clients

A

Many companies have salespeople dedicated to specific clients to address complexity of B2B markets

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14
Q

LO2: 4 market characteristics of B2B compared to B2C

A

1) Demand for business products is derived from B2C sales in same supply chain, fluctuates more, and more frequently
2) Fewer customers, more geographically concentrated, orders are larger
3) Demand is more inelastic - demand is not as affected by price in short run
4) In B2C: consumers buy goods to satisfy own individual needs and are heavily influenced by price, personal taste, brand reputation, and personal recommendations of friends/family

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15
Q

LO2: define derived demand

A

linkage between consumers demand for company’s output and its purchase of necessary inputs to manufacture particular output

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16
Q

LO2: 4 product characteristics of B2B compared to B2C

A

1) Products are more technical in nature and purchased based on specifications by the buyer
2) Mainly raw and unfinished products purchased
3) Heavy emphasis placed on delivery time, technical assistance, after sale service, and financing assistance
4) In B2C: consumers buy finished goods for own personal consumption

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17
Q

LO2: 8 buying characteristics of B2B compared to B2C

A

1) More complex
2) Buying may involve competitive bidding, negotiated pricing, and complex financial arrangements
3) Buying involves qualified, professional buyers who follow more formal buying process
4) Buying criteria and objectives are specified, as are procedures for selecting vendors/products by organization
5) Multiple people with varied interest participate in buying decisions
6) Reciprocal arrangements exist - where 2 firms agree to buy each other’s products/services
7) Buyers and sellers usually work closely to build close long term relationships
8) Online buying over internet is common

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18
Q

LO2: 4 marketing mix characteristics of B2B compared to B2C

A

1) Direct selling is primary form of selling and physical distribution often essential
2) Advertising is technical in nature and promotions emphasize personal selling
3) Price is often negotiated, frequently affected by trade and quantity discounts, price usually includes service or maintenance component
4) In B2C: a salesperson is not really involved in fast moving consumer goods like grocery stores. In B2B, a salesperson is an integral part of a transaction.

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19
Q

LO3: define NAICS - define, who is it done by, spell it out

A

classification scheme that categorizes firms into a hierarchical set of 6 digit codes. Done by Statistics canada. (north american industry classification system)

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20
Q

LO3: benefit of NAICS code

A

Can represent product’s potential because it has info on number, size, and geographical dispersion of firms within each type

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21
Q

LO3: 2 points - ways B2B firms classify and segment markets

A

1) B2B firms can segment and target markets based on firms in the NAICS code that corresponds to the product they are selling.
2) Markets can be segmented also based on geography, account size, etc.

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22
Q

LO4: what buying process step occurs in both B2B and B2C

A

Both B2B and B2C start with need recognition

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23
Q

LO4: 3 ways buying process steps differ in B2B and B2C

A

1) Typically B2B buyers specify needs in writing and ask suppliers to submit formal proposals, whereas B2C buying is made by individuals and sometimes unplanned
2) Formal performance evaluations of vendor and product sold typically do not occur in B2C, but they do experience postpurchase dissonance and evaluate purchase decision
3) info search and alternative evaluation stages are more formal and structured in B2B

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24
Q

LO4: recall 5 steps in B2C consumer buying process

A

1) need recognition
2) info search
3) alternative evaluation
4) purchase decision
5) post decision behaviour

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25
Q

LO4: 6 steps in B2B buying process

A

1) need recognition
2) product specification
3) RFP process
4) proposal analysis and supplier selection
5) order specification (purchase)
6) vendor performance assessment using metrics

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26
Q

LO4: explain stage 1 of B2B buying process: need recognition

A

Firm recognizes it has an unfilled need

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27
Q

LO4: explain stage 2 of B2B buying process: product specification

A

Write a list of potential specifications that vendors might use to develop proposals like screen size for computers

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28
Q

LO4: explain stage 3 of B2B buying process: RFP process - define request for proposal (RFP)

A

buying organizations invite suppliers to bid on supplying their required components/specifications

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29
Q

LO4: explain stage 4 of B2B buying process: proposal analysis and supplier selection

A

Evaluate proposals, narrow selection and discuss price, quality, delivery, financing

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30
Q

LO4: explain stage 5 of B2B buying process: order specification (purchase) - 2 points

A

1) Firm places order with preferred supplier(s)
2) Order includes description of goods, prices, delivery dates, and maybe penalties if it is not filled in time and supplier sends acknowledgement

31
Q

LO4: explain stage 6 of B2B buying process: vendor performance assessment using metrics - what do metrics include

A

Metrics include delivery (based on promised delivery date), quality, customer service, issue resolution

32
Q

LO4: explain stage 6 of B2B buying process: vendor performance assessment using metrics - 4 steps of performance assessment

A

1) buying team develops list of issues it believes are important to consider in vendor evaluation
2) assign importance score to each (which add up to 1)
3) assign numbers that reflect its judgement about how well vendor performs using 5 point scale where 5 means excellent
4) multiplies importance with score to get overall evaluation on 5 point scale

33
Q

LO5: 3 factors B2B buying process may be influenced by within purchasing organization

A

1) buying centre
2) buying org’s philosophy or corporate culture
3) buying situation

34
Q

LO5: define buying centre

A

group of people typically responsible for the buying decisions in large organizations

35
Q

LO5: what must marketers understand about roles within buying process and example

A

Marketers must understand who plays a role in buying process and adapt to it in marketing and sales efforts ex. Employee who uses machine vs CEO who approves it

36
Q

LO5: can some people take on multiple roles in buying centre?

A

yes

37
Q

LO5: list 6 buying roles within buying centre

A

1) initiator
2) influencer
3) decider
4) buyer
5) user
6) gatekeepers

38
Q

LO5: define initiator role in buying centre

A

person who first suggests buying particular product/service

39
Q

LO5: example of initiator role in buying centre

A

your doctor determines treatment for your illness

40
Q

LO5: define influencer role in buying centre

A

person whose views influence other members of buying centre in making final decision

41
Q

LO5: example of influencer role in buying centre

A

medical device supplier, pharmacy. Retailer of particular bandaid influenced doctor’s decision to use that bandaid on you

42
Q

LO5: define decider role in buying centre

A

person who ultimately determines any part of or the entire buying decision, whether what to buy, how to buy, where to buy, what to buy

43
Q

LO5: example of decider role in buying centre

A

hospital is ultimately responsible for deciding whether to buy that band aid brand

44
Q

LO5: define buyer role in buying centre

A

person who handles paperwork of actual purchase

45
Q

LO5: example of buyer role in buying centre

A

hospital’s materials manager is the actual buyer of the bandaid

46
Q

LO5: define user role in buying centre

A

person who consumes or uses product/service

47
Q

LO5: example of user role in buying centre

A

the patient, you may decide that another bandaid suits your needs better

48
Q

LO5: define gatekeeper role in buying centre

A

person who control info or access, or both, to decision makers and influencers

49
Q

LO5: example of gatekeeper role in buying centre

A

purchasing department. May believe that brand is too expense or other band aids are better so it may ask hospital to reconsider purchase

50
Q

LO5: what must final purchase decision take into consideration?

A

Final purchase decision must take into consideration every single buying centre participant

51
Q

LO5: organizational culture

A

reflects set of values, traditions, customs that guide employees behaviour

52
Q

LO5: define culture

A

comprises set of unspoken guidelines that employees share with each other through various work situations

53
Q

LO5: example of org culture and how this impacts buying process

A

walmart buyers are not allowed to accept even cup of coffee from vendor, this highlights overall corporate culture

54
Q

LO5: 4 general types corporate buying centre culture may be divided into

A

1) autocratic
2) democratic
3) consultative
4) consensus

55
Q

LO5: why is knowing corporate buying centre culture important for marketers

A

Knowing which buying centre culture is prevalent in org helps seller decide how to approach that particular client and to whom to deliver important info

56
Q

LO5: define autocratic buying centre culture

A

there may be multiple participants, but one person makes decision along

57
Q

LO5: define democratic buying centre culture

A

majority rules

58
Q

LO5: define consultative buying centre culture

A

uses one person to make decision but they solicit input from others before doing so

59
Q

LO5: define consensus buying centre culture

A

all members must reach collective agreement before supporting purchase

60
Q

LO5: 3 things that can help build B2B relationships

A

1) social media/blogs
2) twitter
3) white papers

61
Q

LO5: explain how social media/blogs is helpful to build B2B relationships

A

blogs/social media can build awareness, provide search engine results, educate potential and existing clients about products, and warm up a seemingly cold corporate culture

62
Q

LO5: explain how twitter is helpful to build B2B relationships

A

Twitter is useful because B2B marketers can communicate with other businesses

63
Q

LO5: explain how white papers are useful to build B2B relationships - explain, what it provides, and example

A

1) B2B marketers can use white papers for marketing efforts and majority of B2B buyers read them before making a purchase.
2) Provides info about industry and its challenges in educational context, rather than promotional.
3) Example: helpful for technical product to be explained for how it solves the firm’s problem

64
Q

LO6: 3 types of buying situations that affect B2B decision/buying process

A

1) new buys
2) modified rebuys
3) straight rebuys

65
Q

LO6: define new buys

A

customer purchases good/service for first time

66
Q

LO6: 5 implications of new buys

A

1) Means buying decisions is likely to be involved because buyer does not have experience with item
2) Likely to proceed through all 6 steps in buying process and involve many people
3) willing to spend time and effort
4) careful search and evaluation of info
5) medium to high involvement (whole new decision)

67
Q

LO6: define modified rebuy

A

buyer has purchased similar product in past but has decided to change some specifications, like desire price, quality level, customer service level and options

68
Q

LO6: 4 implication of modified rebuy

A

1) Current vendors likely to have advantage in acquiring sale in this situation
2) moderate level of involvement and perceived risk
3) willing to compare few alternatives
4) tend to use shortcuts or rely on recommendations

69
Q

LO6: define straight rebuy

A

when buyer simply buys additional units of products they had previously purchased

70
Q

LO6: 5 implications of straight rebuy

A

1) Buyer is often only member of buying centre involved in process
2) Can go directly to 5th step of buying process
3) Similar to B2C process
4) recognize a problem and make a purchase
5) little time and effort spent

71
Q

LO6: what does different buying situation call for?

A

different marketing and selling strategies

72
Q

lecture: what is new buy in B2C

A

extended or complex problem solving

73
Q

lecture: what is modified rebuy in B2C

A

limited problem solving

74
Q

lecture: what is straight rebuy in B2c

A

routine buying

marketing (18 decks)

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