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ORGANIZATIONAL BUYER BEHAVIOR
         Dr. Vu The Dung
             Sep 2008
Discussion

    What is B2B Marketing?
    How does B2B differ from B2C Marketing?
    What is the potential weakness of Marketing
     Concept?
    Discuss the trends in Marketing Thinking and
     Practices. What do you think is the most
     important trends?
    What is 3C model? Why do Marketers care
     about the 3C perspective?
Case study

    Nắng Sài Gòn is a new, luxurious restaurant
     located in District 1. The Director asks his
     staff to go out to the stress to distribute
     brochure and leaflets.
      Discuss  the director’s marketing solution?
      If you were a director of this restaurant, draw a
       brief B2B Marketing Plan to Market Nang Sai Gon.
Case study: Ferguson Industries
Gabe Ferguson needed a loan. Business was great this year
   for the family business, a company that made small fans
   used to cool personal computers. With business going so
   well, Gabe wanted to expand plant capacity by 25 percent.
   Unfortunately, the bank with which he had done business for
   over two decades was reluctant to provide him with the loan.
As Jaime Trevino, president of the local North Crest Bank
   branch, explained, “I know sales are great this year. But last
   year, sales were barely at break-even and three years ago,
   you lost 10 percent when you lost the Apple account. As it
   is, you still have four customers accounting for 75 percent of
   your business. I think you need more steady growth.”
“But Jaime, without more plant capacity, I won’t be able to get
   that steady growth,” Gabe complained.
“Gabe, let’s look at ways you can get steadier sales first. Then
   if the expansion is still warranted, we’ll make the loan.”
1. Why would sales vary so greatly for Gabe’s company?
2. How can Ferguson Industries stabilize sales?
Case study: Abilene Heavy Equipment Tires
Abilene Heavy Equipment Tires sells tires for off-road mining and forestry vehicles and
    construction equipment. The company also retreads the tires and provides services
    at the mine or construction site. Because customers’ equipment is considered
    production equipment, a flat tire means a loss of production. Quality service is an
    important element in Abilene’s business.
Ken Arthur is the manager of Abilene’s service business. His responsibilities include
    managing a fleet of 12 heavy-duty pickup trucks that are used to reach customers’
    equipment in the field for service. Ken buys three trucks each January, retiring
    each truck after four years of service. For the previous two years, he purchased
    Dodge trucks from the Abilene Dodge dealer, dealing directly with owner Don
    Tanksley.
Today, December 20, Don stopped by Ken’s office. After saying hello and asking after
    the family, Don said, “Come on, Ken, I want to show you something I have outside
    in the truck.” As they walked outside, Don continued, “I know you like to hunt and I
    thought you might appreciate this little Christmas present. You’ve been a good
    customer for nearly 10 years, and I’d like to say thank you with this.” From the
    inside of his truck, Don pulled out a new Browning Citori shotgun.
Ken eyed the new gun with appreciation, knowing that it retailed for at least $1,200.
    The custom carving on the stock, with Ken’s initials, probably added another $500
    to the cost of the gun. He held it, admiring the balance, and then sighted the gun as
    if about to shoot. He thought about how nice it would be to use this at the annual
    dove hunt that Abilene sponsored for its customers.
1. Is there any ethical problem with Ken accepting the gift? Why or why not?
2. What factors could affect your decision?
Trends in Marketing thinking and practice

 From  make-and-sell marketing to sense-and-
  respond marketing.
 From focusing on customer attraction to
  focusing on customer retention
 From pursuing market share to pursuing
  customer share
 From marketing monologue to customer
  dialogue.
Trends in Marketing thinking and practice
 From  mass marketing to customized
  marketing
 From owning assets to owning brands.
 From operating in the marketplace to
  operating in cyberspace.
 From single-channel marketing to
  multichannel marketing.
 From product-centric marketing to customer-
  centric marketing.
Transactional vs. Relational Marketing
                  Transactional exchange                 Relationship exchange
Objective         To make a sale (sale is end result and To create a customer (sale is
                     measure of success)                    beginning and relationship is the
                  Customer needs satisfaction               measure of success)
                     (customer buys value)               Customer integration (interactive
                                                            value generation)
Customer          Anonymous customer                     Well-known customer
    understand    Independent buyer and seller           Independent buyer and seller
    ing
Market tasks  Assessment on the basis of products        Assessment on the basis of problem-
   and           and prices.                                solving competence
   performanc Focus on gaining new customers             Focus on value enhancing of
   e criteria
                                                            existing customers
Core aspects of   Focus on products                      Focus on service
   exchange       Sales is a conquest                    Sale as a agreement
                  Discreet even (episodic perspective)   Continuing process (historic holistic
                  Monologue to be aggregated                 perspective)
                                                         Individualized dialogue
Summary of Key Points – last class

     E-learning, e-resources, discussion online,
      up-to-date announcement
     Satisfy Customer need in a better way than
      competitors
     Marketing Mix 4P = 4C
     The Marketing Concept
     Sales vs. Marketing Concept




                                                    9
Marketing – Extended Model

      Suppliers                                            Distribution Channel
                                   Target
                                  Customer




                                    Value
                                  Economic
                                  Emotional
                       Company               Competitors

   Government                                                   Community
                                                              Interest groups

Cultural/ Political/ Economic/ Legal/ Technological/ Environmental/ Demographic



                                                                                10
Learning Objectives

    Purchasing Process
    Buying Influences




                          11
Buying Influences

                      Innitiator

   Users
                                         Influencer

                     Buyer
                    Behavior

    Purchase
      r
                               Decider


                                                      12
Purchasing Contribution to the Firm

    Provide appropriate levels of supply of the right
     product or service
    At the correct level of quality
    For the lowest total cost
How purchasing costs influence profit?
Trends in Purchasing

    Downsizing
    Outsourcing
      Earlysuppliers involvement
      Stronger relationship with suppliers

    Cross – functional teams
    Professionalism in Purchasing
    Ethical Issues Facing Purchasing
      Receiving gifts
      Access to Information
Typical Profile of Pro Purchasing Officer
Reasons to buy

 Factor                                          Percent

 Product Quality                                  72.7%
 Service                                          53.4%
 Availability of Product                          50.8%
 Total Purchasing Costs                           40.5%
 Price of Product                                 32.2%
 Supplier’s supports in urgent situations         26.9%

 Ease of Contact with suppliers                   18.6%
 Technical supports                               15.2%
 Brand name                                       11.0%
  Source: Calners Advertising Research Reports
Buy Phase Model
Buy Phase and Marketing Techniques
Brand Relevance and Buying Situations
Purchasing Philosophy

 Adversarial purchasing       Partnership purchasing or
   philosophy                   preferred supplier
                                systems




 Many Suppliers     Several Suppliers         One Supplier
Buying Influences
Supplier Evaluation
Factors influencing Purchasing Decision
Factors influencing Purchasing Decision


Environmental
                     Organizational
•Level  of
  demand                               Interpersonal
                     •Objectives
•Economic                                              Individual
                                       •Interests
  outlook            •Policies                        •Age
                                                      •Income
•Interest rate                         •Authority                    Business
                     •Procedures                      •Education
•Rate of techno-                       •Status        •Job position   Buyer
  logical change     •Organizational                  •Personality
                      structures       •Empathy       •Risk attitudes
•Political and
  regulatory                                          •Culture
                     •Systems          •Persuasive-
  developments                         ness
•Competitive
  developments
•Social  responsi-
 bility concerns
Comprehensive model
Group Project

    Form group of 4-6 students
    Choose a new products/ services and prepare
     a Marketing Plan to market your products/
     services to B2B customers
Questions/ Answers




                     28

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B2B Marketing - Chapter 2: Organizational Buyer Behavior

  • 1. ORGANIZATIONAL BUYER BEHAVIOR Dr. Vu The Dung Sep 2008
  • 2. Discussion  What is B2B Marketing?  How does B2B differ from B2C Marketing?  What is the potential weakness of Marketing Concept?  Discuss the trends in Marketing Thinking and Practices. What do you think is the most important trends?  What is 3C model? Why do Marketers care about the 3C perspective?
  • 3. Case study  Nắng Sài Gòn is a new, luxurious restaurant located in District 1. The Director asks his staff to go out to the stress to distribute brochure and leaflets.  Discuss the director’s marketing solution?  If you were a director of this restaurant, draw a brief B2B Marketing Plan to Market Nang Sai Gon.
  • 4. Case study: Ferguson Industries Gabe Ferguson needed a loan. Business was great this year for the family business, a company that made small fans used to cool personal computers. With business going so well, Gabe wanted to expand plant capacity by 25 percent. Unfortunately, the bank with which he had done business for over two decades was reluctant to provide him with the loan. As Jaime Trevino, president of the local North Crest Bank branch, explained, “I know sales are great this year. But last year, sales were barely at break-even and three years ago, you lost 10 percent when you lost the Apple account. As it is, you still have four customers accounting for 75 percent of your business. I think you need more steady growth.” “But Jaime, without more plant capacity, I won’t be able to get that steady growth,” Gabe complained. “Gabe, let’s look at ways you can get steadier sales first. Then if the expansion is still warranted, we’ll make the loan.” 1. Why would sales vary so greatly for Gabe’s company? 2. How can Ferguson Industries stabilize sales?
  • 5. Case study: Abilene Heavy Equipment Tires Abilene Heavy Equipment Tires sells tires for off-road mining and forestry vehicles and construction equipment. The company also retreads the tires and provides services at the mine or construction site. Because customers’ equipment is considered production equipment, a flat tire means a loss of production. Quality service is an important element in Abilene’s business. Ken Arthur is the manager of Abilene’s service business. His responsibilities include managing a fleet of 12 heavy-duty pickup trucks that are used to reach customers’ equipment in the field for service. Ken buys three trucks each January, retiring each truck after four years of service. For the previous two years, he purchased Dodge trucks from the Abilene Dodge dealer, dealing directly with owner Don Tanksley. Today, December 20, Don stopped by Ken’s office. After saying hello and asking after the family, Don said, “Come on, Ken, I want to show you something I have outside in the truck.” As they walked outside, Don continued, “I know you like to hunt and I thought you might appreciate this little Christmas present. You’ve been a good customer for nearly 10 years, and I’d like to say thank you with this.” From the inside of his truck, Don pulled out a new Browning Citori shotgun. Ken eyed the new gun with appreciation, knowing that it retailed for at least $1,200. The custom carving on the stock, with Ken’s initials, probably added another $500 to the cost of the gun. He held it, admiring the balance, and then sighted the gun as if about to shoot. He thought about how nice it would be to use this at the annual dove hunt that Abilene sponsored for its customers. 1. Is there any ethical problem with Ken accepting the gift? Why or why not? 2. What factors could affect your decision?
  • 6. Trends in Marketing thinking and practice  From make-and-sell marketing to sense-and- respond marketing.  From focusing on customer attraction to focusing on customer retention  From pursuing market share to pursuing customer share  From marketing monologue to customer dialogue.
  • 7. Trends in Marketing thinking and practice  From mass marketing to customized marketing  From owning assets to owning brands.  From operating in the marketplace to operating in cyberspace.  From single-channel marketing to multichannel marketing.  From product-centric marketing to customer- centric marketing.
  • 8. Transactional vs. Relational Marketing Transactional exchange Relationship exchange Objective To make a sale (sale is end result and To create a customer (sale is measure of success) beginning and relationship is the Customer needs satisfaction measure of success) (customer buys value) Customer integration (interactive value generation) Customer Anonymous customer Well-known customer understand Independent buyer and seller Independent buyer and seller ing Market tasks Assessment on the basis of products Assessment on the basis of problem- and and prices. solving competence performanc Focus on gaining new customers Focus on value enhancing of e criteria existing customers Core aspects of Focus on products Focus on service exchange Sales is a conquest Sale as a agreement Discreet even (episodic perspective) Continuing process (historic holistic Monologue to be aggregated perspective) Individualized dialogue
  • 9. Summary of Key Points – last class  E-learning, e-resources, discussion online, up-to-date announcement  Satisfy Customer need in a better way than competitors  Marketing Mix 4P = 4C  The Marketing Concept  Sales vs. Marketing Concept 9
  • 10. Marketing – Extended Model Suppliers Distribution Channel Target Customer Value Economic Emotional Company Competitors Government Community Interest groups Cultural/ Political/ Economic/ Legal/ Technological/ Environmental/ Demographic 10
  • 11. Learning Objectives  Purchasing Process  Buying Influences 11
  • 12. Buying Influences Innitiator Users Influencer Buyer Behavior Purchase r Decider 12
  • 13. Purchasing Contribution to the Firm  Provide appropriate levels of supply of the right product or service  At the correct level of quality  For the lowest total cost
  • 14. How purchasing costs influence profit?
  • 15. Trends in Purchasing  Downsizing  Outsourcing  Earlysuppliers involvement  Stronger relationship with suppliers  Cross – functional teams  Professionalism in Purchasing  Ethical Issues Facing Purchasing  Receiving gifts  Access to Information
  • 16. Typical Profile of Pro Purchasing Officer
  • 17. Reasons to buy Factor Percent Product Quality 72.7% Service 53.4% Availability of Product 50.8% Total Purchasing Costs 40.5% Price of Product 32.2% Supplier’s supports in urgent situations 26.9% Ease of Contact with suppliers 18.6% Technical supports 15.2% Brand name 11.0% Source: Calners Advertising Research Reports
  • 19. Buy Phase and Marketing Techniques
  • 20. Brand Relevance and Buying Situations
  • 21. Purchasing Philosophy Adversarial purchasing Partnership purchasing or philosophy preferred supplier systems Many Suppliers Several Suppliers One Supplier
  • 25. Factors influencing Purchasing Decision Environmental Organizational •Level of demand Interpersonal •Objectives •Economic Individual •Interests outlook •Policies •Age •Income •Interest rate •Authority Business •Procedures •Education •Rate of techno- •Status •Job position Buyer logical change •Organizational •Personality structures •Empathy •Risk attitudes •Political and regulatory •Culture •Systems •Persuasive- developments ness •Competitive developments •Social responsi- bility concerns
  • 27. Group Project  Form group of 4-6 students  Choose a new products/ services and prepare a Marketing Plan to market your products/ services to B2B customers

Notas do Editor

  1. ©MPDF 2005. All rights reserved. Core Consultant Course Module 14 - Consulting Presentation Skills INSTRUCTIONAL NOTES: 0min All the slides will require 2hours 28mins to present. FOCUS POINT: Presentation skills for consultants Analysis of the situation How to choose Charts and Graphs Bringing in the Audience Controlling the Question-and –Answer Session Handout  No Activity  Presentation Slides
  2. 9
  3. ©MPDF 2005. All rights reserved. Core Consultant Course Module 14 - Consulting Presentation Skills INSTRUCTIONAL NOTES: 10min NOTES: Do you have any question regarding any part in the whole module we have finished? KEY POINT:Question and Answer session.