Industry Vertical

Automotive
Subject: B2B Marketing
Sec: PGDIM-C

Group Members
1. Mahima – 2102151
2. Nimje Rajat Pramod – 2102184
3. Rajat Khairkar - 2102211
4. Nimje Pratik Satish – 2102183
5. Nagpure Pranay Dipak – 21021876
 The Supply Chain (Upstream and
Downstream)

• The automotive industry has a ‘tiered’ supply chain structure, which is best illustrated by way of the
diagram shown below. Upstream from the car manufacturer or OEM are the Tier 1 suppliers.

• These companies will typically supply some of the largest components or sub-systems for the cars,
such as a suspension assembly or gearbox.

• Moving upstream, the Tier 2 suppliers typically provide components to the Tier 1 suppliers and these
could for example be pump units, electric motors or bearing assemblies. Then further upstream you
have the Tier 3-x suppliers who will provide the Tier 2 suppliers with anything from brackets, seals
through to machined components etc.

• Downstream from the OEMs the third party logistics (3PL) providers will distribute finished vehicles to
storage compounds and vehicle distribution hubs located around the world. These will then get shipped
to the dealer networks as and when required.
 The Supply Chain (Upstream and
Downstream)
The core Automotive industry supports both upstream and
downstream industries
Procurement Process
 The Practices in Automotive Procurement
Process
1. Supplier Diversification
While in the past most Automotive companies have worked with a limited number
of suppliers or part manufacturers, to mitigate the risk of supply chain failures,
many companies are adopting the strategy of supplier diversification. Similarly, on
the supplier side, more and more suppliers are looking at servicing a larger OEM or
regional base than just one, as in past.

2. Strengthening Supply Chain collaborations and cross functional

relationships
The importance of long term partnerships between automobile companies and their
component/assembly supplier cannot be emphasized enough. With the rise of trends
like Ride-Sharing, automotive ownership might take a dive which makes cross
functional relationship even more important. 
3. Sourcing Closer
Companies are re-assessing their stand based on risks such as high logistic costs,
long supply chains and cost fluctuations. Recently, in the Indian market, companies
like BMW, Honda and Volkswagen have been increasingly looking at sourcing
locally- an arrangement which creates a win-win scenario and helps ward-off
supply chain failures and cost fluctuation risks.
 The Practices in Automotive Procurement
Process
4. Holistic Costs efficiency focus
Improving procurement alone isn't the answer to solving inefficiencies which have
snowballed right from R&D and other strategic decisions. Transformation and
synergies also need to be established across the entire product lifecycle-
quantitative modeling like should-costs, process complexity reduction and value
engineering are some tools that aid in driving a holistic cost efficiency across the
entire life cycle.

5. Technology and data leverage for improving processes involved in

Procurement & Sourcing
procurement organization maturity and excellence in sourcing and procurement
practices is the first step towards transformation; a well-structured Category and
Sourcing strategy, application of Sourcing technologies, negotiation models, data
analytics and business intelligence backed decision making are all key towards
establishing best practices and identifying cost optimization and process
improvement opportunities.
People Involved in the DMU in Buying Process
 People Involved in the DMU in Buying Process
1. Users
These are the people who are actually going to work with the purchased goods or services and
they exert influence on the specifications. Both customers and employees may take on this role.

2. Influencers
They can exert influence on the purchasing process by setting preconditions. They can be found
at all levels of the organization.

3. Buyers
The buyer is the actual negotiator with the supplier. The buyer negotiates about contract terms
and eventually places the order. The buyer takes up one of the most important roles within the
decision making unit.

4. Initiators
The initiator is the player who recognizes a problem and tries to find a solution for this problem.
This is the most important person in the decision making unit or DMU.

5. Deciders
The Decider is the player who is ultimately responsible for choosing the supplier and as a result
takes up an important position within the decision making unit or DMU.

6. Gatekeepers
The Gatekeeper is responsible for the information provision within the DMU.  These are the
people who control the flow of information to others.
 Factors that influence B2B buying decisions

• Recognizing there is a problem or need

• Evaluating and comparing available solutions
• Defining the requirements for the product or service
• Selecting a supplier
• Justifying the decision
Factors that influence B2B buying decisions

Buyers tend to rely on the following external information sources early in the buying journey:

•Search engines
•Online review sites
•Peer reviews and recommendations – (76% prioritize vendors suggested by their peers)
•Industry-specific content (e.g., trade journals, blogs, whitepapers)
•Social media – (the IDC claims that 75% of B2B buyers incorporate social media into their buying journeys)
•Industry-specific consultants and other subject matter experts

There are three drivers of rational motivations:

1.strong relationship with a specific sales representative

2.Buyers consider more decision-making criteria
3. buyers are encouraged to look at ‘the big picture’ more than consumers

There are also several drivers of emotional motivations:

4.The stakes are higher

5.Status quo bias
6.Loss aversion 
7.Decision paralysis 
Factors that influence B2B buying decisions

Buyers tend to rely on the following external information sources early in the buying journey:

•Search engines
•Online review sites
•Peer reviews and recommendations – (76% prioritize vendors suggested by their peers)
•Industry-specific content (e.g., trade journals, blogs, whitepapers)
•Social media – (the IDC claims that 75% of B2B buyers incorporate social media into their buying journeys)
•Industry-specific consultants and other subject matter experts

There are three drivers of rational motivations:

1.strong relationship with a specific sales representative

2.Buyers consider more decision-making criteria
3. buyers are encouraged to look at ‘the big picture’ more than consumers

There are also several drivers of emotional motivations:

4.The stakes are higher

5.Status quo bias
6.Loss aversion 
7.Decision paralysis 
Factors that influence B2B buying decisions

Based on these different levels and motivations, buyers will consider many decision-making criteria,
including (but not limited to) the following:

•The total cost of ownership

•Value for money
•Up-front price
•Pricing model (e.g., subscription or one-off payment)
•Likely efficiency or productivity gains from using the product
•Company reputation (based off reviews and general brand perceptions)
•Quality of relationship with company representatives
•Representative’s responsiveness to requests and queries
•Product quality or reliability
•Extent to which product meets required specification
 Factors that influence B2B buying decisions
Content Marketing

Companies are now building content to guide the buyer on every step of their purchasing journey. Content
builds brand awareness, establishes trustworthiness, improves visibility and even helps nurture a sense of
loyalty from the customer relationship. This can range anywhere from weekly blogs, newsletters, social
media, content on the website to videos and graphics. With whatever content you create, you are
representing and building your brand. Content is one of the greatest ways to establish your brand as a
thought leader in your industry.
Search Engine Optimization

One of the best ways that people will discover your brand is through a search engine. To understand how
people are seeing your website through an internet search, you first need to understand how a search
engine works. With search engine optimization strategies, you can modify and strengthen the content on
your website to increase and strengthen your visibility in an internet search. Good content yields better
search results in a search engine.
Social Media

Businesses have used social media for years, and it has certainly contributed to the change in B2B
marketing. Social accounts for businesses can be used to build and foster relationships with clients and
potential leads, as well as share the stories and all of the created content. For your business social
accounts, it’s important to understand which segments of your audience is using which platform. For
instance, Instagram caters to a much younger demographic as opposed to the older groups on Facebook.