B2B Marketing mba class material for study

B2B Marketing mba class material for study

1. B2B Marketing
Perspective of B2B Marketing

2. Introduction

3. Evolution
Industrial B2B
Organisational
?

4. Nature
Customer is an organisation
Enterprises
Users
OEMs
Dealers & distributors
Institutions
Government

5. The B2B-B2C dichotomy
Differences in
Market structure
Buying behaviour
Marketing practices

6. Market Structure
Demand
Derived vs. direct
Volatility of demand
Greater
Elasticity of demand
Less elastic vs. more elastic –perverse (?)
Market size
Larger
Geographic concentration
Often clustered vs. usually dispersed

8. Buying Behaviour
Buying influences
Many vs. few
Purchase cycles
Often long vs. usually short
Transaction value
Higher
Process complexity
More complex
Formal, written rules
Common vs. uncommon

9. Buying Behaviour Contd.
Buyer-seller interdependence
Often very close
Importance of relationships
Mostly very high
Degree of interactivity
High vs. low
Purchase professionalism
High vs. low

10. Marketing Practices
Selling process
Systems vs. product
Personal selling usage
Extensive vs. limited
Promotion
Customer-specific vs. mass marketing
Branding
Limited vs. extensive
Marketresearch
Limited vs. extensive

11. Marketing Practices Contd.
Use of relationships
Extensive vs. limited
Segmentation
Rudimentary vs. sophisticated
Product complexity
Greater

12. Customer Value Proposition
Particular set of benefits that matter most to target
customers
Demonstrate the value of this superior performance
Communicate to convey a sophisticated understanding
of the customer’s business (process, priorities)

14. Classification of Goods
Entering
Raw materials –farm products, natural products
Manufactured materials & parts
Foundation
Installations
Accessories
Facilitating
Supplies / MRO items
Services

15. The Market

16. B2B Market
Commercial Enterprises
Institutions
Government

17. Commercial Enterprises
Distribution by size
Geographical concentration
Purchasing organisation-strategic procurement

18. Size
Buying firms are bigger in size
MSMEs
26 million units
45% of the manufacturing

19. Geographical Concentration
Concentrated marketing efforts –sales personnel,
distributors
Warehouses and/or distribution centres–effective
coverage
Concentrated HQ coverage

20. Purchasing Organisation
70% of costs (manufacturing firms) –straight impact
on bottomline
Centralisedprocurement strategy
Buyers –responsible for specific group of products
Development of technical expertise
Emergence of purchase engineers
material evaluation, cost studies

21. Purchasing function: Key deliverables
•Materials, services, supplies to keep operations movingUninterrupted flow
•MinimiseinvestmentInventory
•Careful evaluation and selection of products and services Quality
•Find competent suppliers
•Establish collaborative relationships
Supplier relationships
•Lowest total cost Total cost
•Lowest possible level of purchase administration costsAdministrative costs
•Reduce supply chain costs
•Capitaliseon supplier capabilities
Competitive position of firm

22. Procurement as Strategy
Leveraged
Buy
(Buy for
less)
Linked Buy
(Buy better)
Value Buy
(Consume
better)
Integrated
Sell
(Sell better)

23. Marketing Strategy
Understand items having
Criticality in operations
Business risk dimensions –customer’s customer’s value
Focus on strategic purchases
High revenue & high customer value impact
For less strategic purchases
Provide complete assortment, timely service/supply support,
simplified ordering

24. Government
Public procurement in India
Central Government –Ministries & departments
States & Union territories
Municipal and other local bodies
PSUs
20-22% of GDP
INR 66.2 lakh crores (FY 2023-24)
Defenceprocurement –10.2%

25. Organisations
Governed by GFR (General Financial Rules, 2017)
Mandatory procurement through GeM
UptoINR 50,000: any supplier
50,000 –30,00,000: lowest from 3 different manufacturers
Above 30,00,000: through online bidding
Purchasing norms (outside GeM)
UptoINR 25,000: purchase without quotation, with undertaking
25,000 –250,000: local purchase committee
Above 250,000: through tendering

26. Strategy
Understand the complex rules and standards
Develop system to keep abreast of procurement plans
of each purchasing agency
Product development and R&D strategy in line with
government needs
Develop a communications strategy
Generate a negotiation strategy to secure favourable
terms –payment, contract completion, overruns

27. Institutions
Similar to governments
Dictated by law
Constrained by political
considerations
Privately managed
Broader range of purchase than
corporates
Value of efficient buying
acknowledged
•Budget limit based buying
•Staffed with professionals
▫Dedicated materials management department
•Group purchasing

28. Strategy
Evaluate budgetary status
Attention to third-party contractors
Cultivate professional staff for product benefits

29. Effect of IT on Purchase Behaviour
Communicating with external markets
Independent third parties
Industry consortia
Electronic marketplaces –Auctions, Catalogue purchasing
Types
Vertical -related to core operations
Horizontal –widespread
Internal coordination
Inter-& intra-firm coordination -SCM

30. Vertical Marketplace

31. Horizontal Marketplace

32. E-Procurement
Use of Web-based applications, decision support tools,
and associated services to streamline and enhance
strategic sourcing processes and knowledge management
Purchasing managers
Look out for new vendors
Communicate with current suppliers
Transact

33. Evolution
Traditional
procurement
mainly paper
based
Electronic
systems to
support
traditional
procurement
Mainframe, PC,
ERP, EDI
Web as
communication
channel to
support
traditional
procurement
E-mail, websites
Internet tools
and platforms to
complement
traditional
procurement
online supplier
databases, e-
catalogs, web-
enabled EDI
Internet tools
and platforms to
replace
traditional
procurement
fully integrated e-
markets,
automatic stock
replenishment
Time
Technology

34. Capabilities
Online negotiations
Create RFP, RFQ, RFI
Conduct reverse auctions
Collaboration tools
With internal stakeholders –specs, priorities
Description of requirements in RFP
Knowledge management
Repository of procurement data
Analytical tools
Cost and spending analysis –top management

35. Auctions
English –highest bidder
Sale of scrap
Reverse –lowest bidder; online form of tender purchasing
One buyer –several pre-qualified sellers
Dynamic, real-time, competitive bidding
Used for entering and facilitating goods

36. Market-centredOrganisation
Marketing
Market
Research
Sales
Advertising
Markets
Commercial
Segments
1…n
Government
Institutions

37. Thank You!