B2B Marketing mba class material for study

B2B Marketing mba class material for study

1. B2B MARKETING
MODULE 2
ORGANISATIONALBUYING BEHAVIOUR

2. INTRODUCTION
No firm is an island
Buying is a process –generally well-drawn out
Access to supply markets is imperative
Factors for reaching supply markets & products
External
Organisational
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3. ORGANISATIONALFACTORS
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Form of operations
Business strategy
Purchasing orientation

4. FORM OF OPERATIONS
Unit production
Bespoke
Technological complexity and scale affect
competitiveness
Design and production capabilities of
suppliers
Mass production
Efficiency determined by equipment,
integration among sections, raw material
costs
Highly inflexible –suppliers to adjust their
logistics and processes to be compatible
Suppliers contribute in NPD process,
crucial for survival and growth
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5. FORM OF OPERATIONS
Process production
High volume, continuous, efficient
Continuity is imperative
Mostly produce intermediates & raw
materials
Infrequent big-ticket equipment
purchases
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6. BUSINESS STRATEGY
Product leadership
Relentless innovation
Technical and creative abilities
Suppliers –knowledge of customer’s business; offer design and
product expertise to contribute to innovation; responsiveness
to innovativeness
Cost leadership
Ongoing process of cost containment -central theme of
dealing with suppliers
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7. BUSINESS
STRATEGY -
Social
Social
responsibility
strategy may affect
dealing with
suppliers
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8. PURCHASING A COMPONENT
Imagine you are a purchase manager for a PC
manufacturer. Your boss has asked you to order a
large quantity of an important electronic component.
There are 3 potential suppliers –A, B & C. To the
best of your knowledge, they are equal in product
quality and availability.
In each of the following situation, which supplier
would you place your order on?
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9. SITUATIONS
Supplier A Supplier B Supplier C
Situation 1150 per unit 155 per unit 170 per unit
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Situation 2150 per unit 155 per unit 170 per unit
More traditional
design. Installation
cost:12 per unit
Your manufacturing
managersays the
component has a special
modular design that has an
installation cost of 5 per
unit
More traditional design. Installation
cost:14 per unit
Situation3 150 per unit 155 per unit 170 per unit
No premium
expected
No premium expected Your marketing manager says C has
spent crores in successful campaign
to promote the brand equity of this
component. Consumers are
expected to pay extra 50 per PC
for having this component.

10. PURCHASING ORIENTATION
Three types (Dobler& Burt, 1996)
Buying
Reductions in monetary value –L1; based on its own price to the
customer
Maximisesbuyer power –playing a supplier against another
Procurement
Based on total cost of ownership (TCO)
Reducing TCO needs willingness to share information with
suppliers -target cost to supplier
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11. PURCHASING ORIENTATION
Supply management
Maximisevalue along the supply chain –extensive collaboration
Focus on end-customers
Assessment of competencies and capabilities to determine
which activities to be done in-house and which to outsource
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12. MARKETING IMPLICATIONS
Buying orientation + less important (MRO)
→Focus on efficiency
→Innovation in the offering
Supply management orientation + high complexity &
high risk
→Strive to become key contributor in customer strategy;
technical, human & financial resources necessary
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13. SEGMENTING PURCHASE DECISIONS
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Advertising
Telemarketing
Office supplies
Travel
Materials
Logistics
Professional services
Critical components
High-technology
products
Purchase complexity
Business risk
Low
High
High

14. PURCHASE PROCESS
Performance feedback & evaluation
Selection & establishment of order routine
Proposal evaluation & supplier selection
Search & qualification of potential sources
Determination of specification & quantity
Organisationalproblem recognition
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15. BUYING SITUATION
Based on familiarity with products or process
New task
Judgmental
Strategic
Straight re-buy
Casual
Routine low priority
Modified re-buy
Simple
Complex
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16. LIMITATIONS
Only focus on tasknewness
No importance on
purchase function
market conditions
power of buyer relative to suppliers
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17. TRANSITION OF BUYING DECISIONS
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New Task
Recognition
Selection
Solution
delivery
Evaluation
Straight Rebuy
Modified Rebuy
SATISFIED
DISSATISFIED
DISSATISFIED
SATISFIED
Simple
Complex
SATISFIED
Solution
delivery
Evaluation

18. BUYGRIDFRAMEWORK
New taskModified re-buyStraight re-buy
Problem recognition Yes Possibly No
Determination of specificationYes Yes No
Source search & qualificationExtensive Limited No
Proposal evaluation & supplier
selection
Extensive Limited No
Selection of order routine Yes Possibly No
Performance feedback &
evaluation
Yes Yes Yes
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19. MARKETING IMPLICATIONS
New task
Get involved at an early stage
Obtain information on the nature of the purchasing problem
Identify specific product requirements
Formulate proposals to match the requirements
In-suppliers to monitor changing needs & support the
customer in such situations
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20. MARKETING IMPLICATIONS CONTD.
Straight re-buy
In-suppliers
Regular contact to ensure no complaints
Identify and resolve problem areas quickly
Reduce customer buying effort –automated re-ordering
Out suppliers
Price cutting not an attractive option for customer
Move to modified re-buy by reducing the total cost of ownership
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21. MARKETING IMPLICATIONS CONTD.
Modified re-buy
Happens when customer sees potential benefits from re-
looking into alternative supply solutions
In-suppliers
Move decision-makers from modified to straight re-buy thus reducing
perceived benefits
Invest into understanding purchase requirement and extinguish
problems fast
Out suppliers
Ensure the purchase stays in modified re-buy as long as possible
Offer performance guarantees
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22. FORCES SHAPING OBB
•Roles, relative influences,
and patterns of
interaction of buying
centremembers
•Job function
•Past experience
•Buying motives
•Goals, objectives,
strategies
•Organisationalposition
of purchasing
•Economic outlook
•Pace of technological
change
•Global trade
relations
EnvironmentalOrganisational
Group Individual
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23. ENVIRONMENTAL FORCES
Economic
Shapes a firm’s ability and willingness to buy
Emerging economies turning into sourcing hubs
PMI
Technological
Internet
Pace of change importance of purchasing manager 
More intense but less time-intensive search
Tracking social media buzz
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https://www.pmi.spglobal.com/

24. GROUP FORCES
Buying Centre
Initiators
Deciders
Buyers
Influencers
Users
Gatekeepers
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25. FUNCTIONS vs.ROLES
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Operations
Purchasing
Engineering
Finance
Marketing Gatekeeper
Buyer
Decider
Influencer
User

26. MARKETING TO DMU
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27. PERCEIVED RISK
Risk is inherent in business markets –uncertainty & negative
consequences
Types
Financial
Performance
Social
Perceived risk heightens with new task or complex modified re-buy
With increased risk
Buying centrecomposition changes –number & authority
Increased information search
Deliberate investment of effort in the buying process
Suppliers with proven track records preferred
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28. INFLUENCES
Corporate culture –innovative/bureaucratic
Degree of risk aversion
Reward system
Degree of vertical and horizontal management involvement
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Communicator
Liaison
Boundary person
Diplomat

29. THE INDIVIDUAL PURCHASING MANAGER
Neither perfectly rational nor objective
Personal factors
Attitude towards perceived risk
Handling risk
Backgrounds –education, employment
Information collection and processing abilities
Extrinsic factors
Inter-functional coordination
Inter-firm coordination –supply chain issues
Purchasing community -WOM
Online purchasing –reverse auctions
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30. XIM MBA(BM) 2024-26
RELENTLESS.COM

31. A KANTAR STUDY
B2B brands power much of the world’s economy, and creativity
is an economic multiplier
Persuasion and message relevance tend to be stronger in B2B
ads
Yet invoke less intuitive response when it comes to attention and
engagement
When audience is less engaged, the connection to the brand tends to be
weaker
Ads that break stereotypes by not showing typical office
environments are more likely to have impact
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https://www.youtube.com/watch?v=NlaMo21WRwA&list=P
L_zKgUUbRt1DLHo2puONfuE_M5OAgvL09

32. XIM MBA(BM) 2024-26

33. THANK YOU!
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