TABLE OF CONTENTS

 ORGANIZATIONAL BUYING
 BUSINESS MARKETS
 THREE BIG CHALLENGES FACED BY
B TO B MARKETING
 CHARACTERISTICS OF A BUSINESS MARKET
 BUYING SITUATIONS
 PARTICIPANTS IN THE BUSINESS BUYING PROCESS
 BUYING CENTER INFLUENCES
 STAGES IN THE BUSINESS BUYING-DECISION
PROCESS
 E-PROCUREMENT
 BUSINESS TO BUSINESS MARKETS
BUSINESS MARKETS
The business market consists of all the organizations that acquire goods and services used in the
production of other products or services that are sold, rented, or supplied to others or we can say
that business market consists of organizations that that buy or sell goods for business purpose.

FOR EXAMPLE: : rather than manufacturing the parts themselves, computer manufacturers
often buy computer parts and put them together to create a finished product. Intel supplies
processors, graphics chips, and motherboard chipsets for computer system manufacturers such
as Apple, Lenovo, HP, and Dell. 

THREE BIG CHALLENGES FACED BY B TO B MARKETS

1. ALIGNING MARKETING & SALES
Aligning the marketing and sales activities is indeed a great challenge for the b to b
markets. Marketing reaches out to the potential customers and provides them with
knowledge and incentives about their company and their products through promotions
and campaigns. The Sales team develops a one on one relationship with the customer,
and they work hard to ensure that the customer evolves from having an interest in
their company, to signing a contract and paying for a service. Sales and Marketing are
often seen as two separate departments within a company. But although their daily
operations are focused on different aspects of the customer relationship, they should
function together as single unit. Their relationship is irrevocably interconnected, and
recognizing where each team specializes and how they can come together to generate
growth.

How marketing & sales can be aligned?

The most effective technology used by companies with high sales and marketing
alignment is customer relationship management software. CRM software provides
you with a 360-degree view of a customer, and having that single view enables teams
to act quickly and decisively to deliver more value to prospects. Putting the right
systems and technologies in place will help you draw the bridge between the
marketing data being gathered about a prospect and their transformation into leads
and sales opportunities.
 2. BUILDING STRONGER INNOVATIVE MARKETING
INTERFACE
Marketing interface is the media by which an organization communicates with its
consumers. Innovation in marketing interface means bringing about new ways to
attract the customer. Bringing a change in the already established marketing interface
in a business community is difficult and a hectic amount of brain storming is required
to bring innovation. Coming up with innovative marketing innovation is vital and is
also better for the business to increase its profit and market share. Digital marketing
(websites, online advertisements, and posts on social media) is one of the tools
through which an organization may grow at its peak.

3. EXTRACTING MORE CUSTOMER AND MARKET

KNOWLEDGE
Extracting more and more customer and gaining wide market knowledge allows a
business to know the ongoing trend of the market proves to be helpful for a business
to come up with competitive strategies and policies in order to survive in the highly
competitive market. Increasing more customers directly benefits the business hence
increasing its sales as well as profits. To extract more customer and market
knowledge an organization needs to conduct extensive and expensive market
research. This process is time consuming and also very costly. The business will need
to weigh the pros and cons for conducting such research. A preliminary research can
be a good idea to check the effectiveness.

CHARACTERISTICS OF A BUSINESS MARKET

FEWER, LARGER BUYERS
In business market, the buyers are few but the amount of purchase is large. There are simply less
companies acting as purchasers on the B2B market than consumers on the B2C market.
However, the amount they purchase is much larger.

CLOSE CUSTOMER SUPPLIER RELATIONSHIPS

Due to smaller customer base and the power of larger customers, suppliers are expected to
customize their offerings to individual business customers needs.

PROFESSIONAL PURCHASING
Business goods are often purchased by trained purchasing agents, who must follow their
organization’s purchasing polices, constraints and requirements .Many business buying
instruments such as quotations, proposals and purchase contracts are not typically found in
consumer buying.

MULTIPLE BUYING INFLUENCES

More people influence business buying decisions. Buying committees that include technical
experts and even senior management are common in purchase of major goods.

MULTIPLE SALES CALLS

In business markets it takes multiple sale calls to close an average industrial sale. For capital
equipment sales for large project it may take many attempts to fund a project and even delivering
product can take years.

DERIVED DEMAND
Another aspect of the B2B market characteristics is that business demand is derived demand. In
fact, demand on the B2B market is derived from the demand for consumer goods If consumer
demand for computers goes down, so will demand for microprocessors  Therefore, the demand
for microprocessors comes from the demand for final consumer goods.

INELASTIC DEMAND
 This means that demand is not affected that much by short-term price changes. The total
demand for many business products is, in fact, not dramatically affected by price changes. If the
price for leather goes down, a shoe manufacturer will not buy much more leather than he usually
does, because his demand is based on consumer demand. If the price for leather goes up, will he
buy less? Probably not, since he still needs the leather to produce shoes to satisfy consumer
demand.

FLUCTUATING DEMAND
The demand for business goods and services tends to be more volatile than the demand for
consumer goods and services. A given percentage increase in consumer demand can lead to a
much larger percentage increase in the demand for plant and equipment necessary to produce the
additional output. Economists refer to this as the acceleration effect consumer demand increases
by only 10 per cent, the retailer may think that it would be wise to order 20% more to have
enough stock for the rising demand in the future. The wholesaler supplying the retailer is likely
to order much more than the 20% increase, let it be 40%. And so it continues up to the beginning
of the whole chain. Therefore, a 10% rise in consumer demand can cause as much as a 200% rise
in business demand. As a result, demand on the B2B demand fluctuates much more than demand
on the B2C market.

 
GEOGRAPHICALLY CONCENTRATED
Business market is concentrated geographically, that means business market is established in a
certain area. 

DIRECT PURCHASING
Business buyers often buy directly from manufacturers rather than through intermediaries,
especially items that are technically complex or expensive.

BUYING SITUATIONS
The business buyer faces many decisions in making a purchase. Three types of buying situations
are the straight rebuy, modified rebuy, and new task.

 STRAIGHT REBUY
A business buying situation in which the buyer routinely reorders something without any
modifications. The purchasing department reorders supplies such as office supplies and
bulk chemicals on a routine basis and chooses from suppliers on an approved list. The
suppliers make an effort to maintain product and service quality and often propose
automatic reordering systems to save time.

 MODIFIED REBUY
A business buying situation in which the buyer wants to modify product specifications,
prices, terms or suppliers. E.g. buyer has purchased a similar product in the past, but has
decided to change some specifications (price, quality level, customer service level,
options, etc.). The out-suppliers see an opportunity to propose a better offer to gain some
business.

 NEW TASK
A new-task purchaser buys a product or service for the first time (an office building, a
new security system). New-task buying is the marketer’s greatest opportunity and
challenge. The process passes through several stages: awareness, interest, evaluation,
trial, and adoption. Over time, new-buy situations become straight rebuys and routine
purchase behavior. In the new-task situation, the buyer must determine product
specifications, price limits, delivery terms and times, service terms, payment terms, order
quantities, acceptable suppliers, and the selected supplier.
 PARTICIPANTS IN THE BUSINESS BUYING PROCESS

 INITIATORS
Initiators are the ones who initiate or recognize the need of a particular product
requirement in the organization.

 USERS
People who will use the product or service, in many cases, the users initiate the buying
proposal and help define the product requirements.

 INFLUENCERS
People who influence the buying decision, often by helping define specifications and
providing information for evaluating alternatives. Technical personnel are particularly
important influencers. These are basically the people who will influence the decision of
which product to buy from where and what suitable price to buy it in.

 DECIDERS
People who decide on product requirements or on suppliers  or have the authority to
decide whether to buy a certain product or not.

 APPROVERS
People who authorize the proposed actions of deciders or buyers are called Approvers.

 BUYERS
People who have formal authority to select the supplier and arrange the purchase terms
are called buyers. Buyers may help shape product specifications, but they play their
major role in selecting vendors and negotiating. In more complex purchases, buyers
might include high-level managers.

 GATEKEEPERS
People who have the power to prevent sellers or information from reaching members of
the buying center. For example, purchasing agents, receptionists, and telephone operators
may prevent salespersons from contacting users or deciders.
 BUYING CENTER INFLUENCES
Buying centers usually include several participants with differing interests, authority,
status, and persuasiveness, and sometimes very different decision criteria. Engineers may
want to maximize the performance of the product; production people may want ease of
use and reliability of supply; financial staff focus on the economics of the purchase;
purchasing may be concerned with operating and replacement costs; union officials may
emphasize safety issues. Business buyers also have personal motivations, perceptions,
and preferences influenced by their age, income, education, job position, personality,
attitudes toward risk, and culture. Buyers definitely exhibit different buying styles.

STAGES IN THE BUSINESS BUYING-DECISION PROCESS

 PROBLEM RECOGNITION
The buying process begins when someone in the company recognizes a problem or need that
can be met by acquiring a good or service. The recognition can be triggered by internal or
external stimuli.

 GENERAL NEED DESCRIPTION

The stage in the business buying process in which a buyer describes the general
characteristics and quantity of a needed item.
 PRODUCT SPECIFICATION
The stage of the business buying process in which the buying organization decides on and
specifies the best technical product characteristics for a needed item.

 SUPPLIER SEARCH
The stage of the business buying process in which the buyer tries to find the best vendors.

 PROPOSAL SOLICITATION
The stage of the business buying process in which the buyer invites qualified suppliers to
submit proposals.

 SUPPLIER SELECTION

The stage of the business buying process in which the buyer reviews proposals and
selects a supplier or suppliers. Buyers may attempt to negotiate with preferred suppliers
for better prices and terms before making the final selections. In the end, they may select
a single supplier or a few suppliers. Many buyers prefer multiple sources of supplies to
avoid being totally dependent on one supplier and allow comparisons of prices and
performance of several suppliers over time.

 ORDER-ROUTINE SPECIFICATION

The stage of the business buying process in which the buyer writes the final order with
the chosen supplier(s), listing the technical specifications, quantity needed, expected time
of delivery, return policies, and warranties.

 PERFORMANCE REVIEW
In this stage of the business buying process the buyer assesses the performance of the
supplier and decides to continue, modify, or drop the arrangement.
E-PROCUREMENT
Buying on the Internet Advances in information technology have changed the face of the B-
to-B marketing process. Electronic purchasing, often called e-procurement, has grown
rapidly in recent years. Virtually unknown a decade and a half ago, online purchasing is
standard procedure for most companies today. E-procurement gives buyers access to new
suppliers, lowers purchasing costs, and hastens order processing and delivery. In turn,
business marketers can connect with customers online to share marketing information, sell
products and services, provide customer support services, and maintain ongoing customer
relationships. Companies can do e-procurement in any of several ways. They can conduct
reverse auctions, in which they put their purchasing requests online and invite suppliers to
bid for the business B-to-B marketers can help customers who wish to purchase online by
creating well designed, easy-to-use Web sites.