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B2B

B2B. Why Organizations Buy: Business-to-Business Markets and B2B E-Commerce. Business Markets. Generally, the same principles are true for business and consumer customers There are characteristics that make B2B buying more complex Multiple buyers Number of customers Size of purchases

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B2B

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  1. B2B • Why Organizations Buy: Business-to-Business Markets and B2B E-Commerce

  2. Business Markets • Generally, the same principles are true for business and consumer customers • There are characteristics that make B2B buying more complex • Multiple buyers • Number of customers • Size of purchases • Geographic concentration

  3. Types of Organizational Markets • Industrial Markets • Industrial firms • Reseller Market • Resellers • Government Markets • Government Units • Global Organizational Markets

  4. Type and number of organizational customers

  5. NAICS breakdown for information industries sector: NAICS code 51 (abbreviated)

  6. Key characteristics of organizational buying behavior

  7. Derived Demand • B2B demand is derived demand because a business’s demand for goods and services comes either directly or indirectly from consumers’ demands

  8. Derived Demand Demand for education Derived demand - textbooks Derived demand - paper Derived demand - pulp Derived demand - forestry products

  9. The Nature of Business Buying • The Buying Situation • The Professional Buyer • The Buying Center

  10. The Professional Buyer • Titles: purchasing agents, procurement officers, director of materials management • Focus on economic factors beyond the initial price of a product including transportation and delivery charges, accessory products or supplies, maintenance, disposal costs, etc. • Large firms practice centralized purchasing - one department does all buying

  11. The Buying Center • A cross-functional group of people in the organization who participate in the decision-making process • May include production workers, supervisors, engineers, secretaries, shipping clerks, and financial officers

  12. Roles in the Buying Center • Initiatorbegins the buying process • User needs the product • Gatekeeper controls the flow of information to other members • Influencerdispenses advice or shares expertise • Decider makes the final decision • Buyer executes the purchase

  13. The Buying Situation • A buy class framework identifies the degree of effort required of the firm’s personnel to collect information and make a purchase decision • Straight rebuy • Modified rebuy • New task buying

  14. How they buying situation affects buying center behavior

  15. ISO 9000 International Organization for Standardization (ISO) Geneva , Switzerland One standards organization per country: • USA – ANSI • Japan – JISC (MITI) • Germany – DIN • Australia – SAI

  16. Electronic B2B Commerce • Internet exchanges between two or more businesses or organizations • Allows marketers to link directly to suppliers, factories, distributors, and their customers • Reduces time necessary to order and deliver goods, track sales, and get feedback

  17. Intranets, Extranets, and Private Exchanges • An intranet is an internal corporate computer network that uses Internet technology to link company departments, employees, and databases • An extranet allows outsiders to the organization to access its intranet • A private exchange links invited groups of suppliers and partners over the Web

  18. Security Issues • Authentication - making sure only authorized individuals are allowed to access a site • Firewalls - combination of hardware and software that ensures only authorized individuals gain entry • Encryption - scrambling a message so that only another individual has the right “key” for deciphering it

  19. Comparing the stages in consumer and organizational purchases

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