SUMMARY OF B2B MARKETING.
IT DESCRIBES B2B MARKETING AS A BUSINESS(BUYING/SELLING) DIRECTED TOWARDS AND DEALING WITH BUSINESS CUSTOMERS AS OPPOSED TO END CONSUMERS SUCH AS YOURSELF.
IT INCLUDES COMMUNALITIES BETWEEN B2B AND B2C MARKETS, B2B BUYING,CONCEPTS AND CONTEXT OF BUSINESS STRATEGY, MARK...
There are communalities between B2B and B2C markets. In both instances, the aim is to satisfy
customer needs at a profit to the organisation. BUT, there are differences between them as well. The
major difference being that in B2B markets, products are bought to satisfy the organisational needs,
while B2C markets products or services are bought for personal consumption. It was pointed out that
the market structures of B2B and B2C differ as well as the buying behaviour and marketing practices in
these markets. We have used five areas of business highlight the main differences between B2B and B2C
marketers and their customers. These criteria are the types of buyers in B2B and B2C markets, the
structural characteristics of B2B and B2C markets, the difference in the buying behaviour of B2B
customer firms and B2C consumers, the main differences in the marketing approach of B2B and B2C
organisations, and the types of products B2B marketing firms sell.
,CHAPTER 2 B2B BUYING
B2C – consumers purchase goods and services for their own personal consumption
B2B – buy products and services from other companies for business use – for production and
operational purposes.
Involves making decisions of “what to buy”, “how to and” whom” Sourcing –related activities to support
the objectives of the business. Matching the needs of the customer to the organisations.
Strategic Importance:
Profitability – Money spent on buying G+S impact on profits. higher cost paid for G+S must be recovered
in higher prices set in the price the customer pays which might not be feasible and could have a negative
impact on profits.
The quality of good and services - Woolworths and BMW has positioned on quality. They would need to
buy high quality raw materials to produce products and services of high quality.
Competitive Advantage – B2B can contribute largely to a company’s competitive advantage. Companies
like Pep and Shoprite who market their products as affordable must buy goods and services at lower
prices than other retailers.
Imported Products and Process Design – Buying can introduce technology, in order to achieve this, they
need to work closely with suppliers to help generate innovative ideas on how to continually add value to
products and services.
Timely marketing and delivery of products – Buying acts as liaison between the selling business and the
department in the buying business. Buying organisations can source suppliers early during the product
development process, which will lead to improvements in material costs, quality as well as product
development times. Suppliers must be credible and reliable as failure means goods won’t reach the
market on time.
, Balancing the inventory – constant rising costs means organisations have to find a balance between
having too little + too much inventory. Buyer plays an important role to achieve this balance.
Roles and Responsibility of the Buyer
· Doing Price/Cost Analysis
Purchasing represents the largest share of the organisations costs. Buyer needs to obtain goods and
services at the highest quality, lowest cost at the right time and at the right place. Price/cost/spend
analysis - ongoing analysis of price and cost trends are carried out.
· Doing Market Research
Market research is conducted to learn about the suppliers, needs of the buying organisation and the
organisations customers. Estimates the future needs of the buying organisation, needs are
communicated to the suppliers who must deliver the goods and services that meets the expectations.
Also determines the needs of the buying’s business’s customers to buy products and services that will
meet the needs and expectations of their customers.
· Maintaining and Improving Quality
Continuous improvements of the quality of suppliers which is linked to the organisations ability to
compete effectively. Ensure materials/services sourced meet the minimum requirements for quality. If
not done the end product will not meet buying organisations expectations or will do so at the cost that
is higher than acceptable.
· Developing Contracts and Negotiating with Suppliers
This involves developing appropriate contracts and satisfactory terms to both parts.
· Providing an Uninterrupted Flow of Materials, Supplies and Services Required for the Operation of the
organisation
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