BUSINESS TO BUSINESS MARKETING

MINI TEST

SUBMITTED BY

GROUP NUMBER – 4
Karthik S – 1827516
M.G. Saidev - 1827518
Namitha Dinesh- 1827549
Saranya Nair- 1827555
Taranjeet Kaur- 1827559

SUBMITTED TO
Dr. Amirtha R

Christ Institute of Management

CHRIST (DEEMED TO BE UNIVERSITY), Bengaluru
July 2019
1. What is B2B marketing? Explain with examples.

B2B companies are supportive enterprises that offer the things other businesses need to operate
and grow. These include businesses like payroll processors or industrial suppliers. This is in
contrast to business-to-consumer (B2C) models, which sell directly to individual customers,
and consumer-to-business (C2B) models, in which an end user creates products or services for a
business. B2B companies have an entirely different target audience: They offer the raw
materials, finished parts, services or consultation that other businesses need to operate, grow and
profit.

For example, the cloud-based document storage company Dropbox serves businesses as well as
individuals. General Electric makes plenty of consumer goods, but it also provides parts to other
enterprises.

2. How B2B marketing is different from B2C marketing?

Differences between B2B and B2C are:

B2B Marketing

In B2B marketing, you want to focus on the logic of the product and its features. There is little to
no personal emotion involved in the purchasing decision, so you want to focus on understanding
your buyers and how they operate within the confines of their organizations' procedures. What's
their role? What's important to them?

This type of marketing is about people using the product more than it is about the product itself.
Be more in-depth with your marketing materials. Your most effective messages will focus on
how your product or service saves time, money, and resources. What kind of return on
investment can buyers expect with their purchase?

As an example, imagine that your company sells productivity software. If you are marketing it to
businesses, the key thing you need to be able to show your prospective clients is that using the
software will save them money in the form of time. Because those using the software will be able
to streamline their work through the use of your software, employees will be able to get more
done in the same amount of time. Because this likely would be a significant purchase for most
companies requiring multiple software licenses and adequate training, expect the sales process to
involve detailed demonstrations and trial periods.

B2C Marketing

When you are marketing to a consumer, you want to focus on the benefits of the product. Their
decision is more emotional. Consumers also are different in that they demand a variety of
distribution channels for convenience. Consumers are less likely to be interested in a lengthy
marketing message and want you to get right to the point.
Consumers don't want to work to understand your benefits. Instead, they will want you to point
out the benefits to them clearly. With consumers, your message must be simple and easy to
understand. Consumers also have a much shorter purchasing process than businesses. They can
purchase within a few minutes to within a few days.

Your most effective marketing strategies will focus on the results and the benefits that your
product or service will bring to them. Customers will want to hear more about how a product or
service helps them and what benefits it brings to them personally. Focus on the problem or pain
point that you solve.

Consider again the example of the productivity software. What consumers will want to know is
how the software is going to make their lives easier. If it includes a calendar feature, how is
inputting information easier, and how does it sync with family members' phones and laptops,
etc.? Your customers in this example aren't looking for a return on their investment. They're
simply looking for software that will make their lives easier without being too complex.

3. Though B2B and B2C marketplaces are significantly different, what important factor

that makes both similar?

Similarities between B2B and B2C are:

 Marketing and sales alignment

They both require alignment with marketing if their marketing strategies are not aligned with
sales strategies, potential customers may get confused. As a result, marketing and sales
departments should work closely. The former helps generate leads, the latter transfers the leads
into clients, both of which work heading to the revenue.

 Excellent customer service

Staffs who do marketing have to recognize the difference between customers with rigid demand
and elastic demand, in order to satisfy them according to their needs and desires. Once a sale is
made, the support team and helpful service which customers can enjoy will do good to save
churn rates.
  Marketers must build and nurture their brand

It is important for both the B2B and the B2C marketers to build a strong brand which can
encourage the consumer to buy. For consumers, even they may pay more, they prefer to buy
brands which have high status like Benz, Lexus, Rolex or Nike as brands play a big role in the
purchasing behavior.

4. What is a derived demand? Explain.

Derived demand is an economic term describing the demand for a good/service resulting from
the demand for an intermediate or related good/service. It is a demand for some physical or
intangible thing where a market exists for both related goods and services in question. The
derived demand can have a significant impact on the derived good's market price. Derived
demand is solely related to the demand placed on a good or service for its ability to acquire or
produce another good or service. Additionally, derived demand can be spurred by what is
required to complete the production of a particular good, including the capital, land, labor, and
raw materials required. In these instances, the demand for raw material is directly tied to the
demand for products that require the raw material to be produced.

The demand that is derived from the demand for another good can be an excellent investing
strategy when used to anticipate the desire for goods outside of the specific good desired. If
activity in one sector increases, any sector responsible for the first sector’s success may also see
gains.

The principles behind derived demand work in both directions. If the demand for a good
decrease, the demand for the goods required to produce the item will also decrease.

5. How fluctuating demand becomes one of the important characteristics of business

markets? Explain with examples.

Fluctuating demand is another characteristic of B2B markets: a small change in demand by

consumers can have a big effect throughout the chain of businesses that supply all the goods and
services that produce it. Often, a bullwhip type of effect occurs. If you have ever held a whip,
you know that a slight shake of the handle will result in a big snap of the whip at its tip.
Essentially, consumers are the handle and businesses along the chain compose the whip—hence
the need to keep tabs on end consumers. They are a powerful purchasing force.

For example, Cisco makes routers, which are specialized computers that enable computer
networks to work. If Google uses five hundred routers and replaces 10 percent of them each year,
that means Google usually buys fifty routers in a given year.
6. Explain the stimulating demand concept in B2B with examples.

The nature of industrial demand the influence of final consumer is well recognized. One way

which industrial marketers attempt to increase sales is by stimulating increases in demand of

ultimate consumers.

By directing advertising to ultimate consumers, industrialists can often increase consumer

demand for final products, which in turn, increases their industrial sales. Industrial advertising to

ultimate consumers is also a method of increasing goodwill and achieving a favorable position
with an industrialist’s immediate customers.

7. Explain price sensitivity in business markets with examples.

Price sensitivity is the degree to which the price of a product affects consumers' purchasing
behaviors. Summed up, it's how demand changes with the change in the cost of products.

In economics, price sensitivity is commonly measured using the price elasticity of demand, or
the measure of the change in demand based on its price change. For example, some consumers
are not willing to pay a few extra cents per gallon for gasoline, especially if a lower-priced
station is nearby.

When they study and analyze price sensitivity, companies and product manufacturers can make
sound decisions about products and services.

Price sensitivity can basically be defined as being the extent to which demand changes when the
cost of a product or service changes.

The price sensitivity of a product varies with the level of importance consumers place on price
relative to other purchasing criteria. Some people may value quality over price, making them less
susceptible to price sensitivity.

8. Who are business market customers? Give examples.

The various B2B customer are:

i. Distributors and Retailers

ii. Dealers
iii. IT companies
iv. Manufacturing companies
v. Any company which needs financial or consultancy services
 vi. Companies which need software services

9. What are the goods sold in business markets? Give examples.

Raw Materials– These are products obtained through mining, harvesting, fishing, etc. They
stand at the very beginning of the production inputs and are unprocessed. They are key
ingredients in the production of higher-order products.
Processed Materials– These are products created through the processing of basic raw materials.
Thus, in contrast to raw materials, they have already been worked on and are processed in some
way. Sometimes, the processing refines original raw materials while in other cases the process
combines different raw materials to create something new. For example, several crops including
corn and sugar cane can be processed to create ethanol.
Installations – Installations refer to facilities such as buildings and offices. Without them,
running the business and producing goods would not be possible.
Equipment– These are products used to help with production activities. An example would be a
conveyor belt used on an assembly line.
MRO (Maintenance, Repair and Operating) Products– These are products used to assist with
the operation of the organization but are not directly used in producing goods or services. Office
supplies, cleaning supplies and copiers as well as parts for a truck fleet and natural gas to heat a
factory fall into this category.

10. On what basis, are the goods of business markets being classified? Explain.

The most widely accepted classification of business products divides the types of B2B products
into entering goods and services, foundation goods and services, and facilitating goods and
services. Let’s take a closer look at each of them:

Entering goods and services – These are products and services that become part of other
products. We are referring to raw materials, component parts and materials. Examples of this
type of B2B product include steering wheels for an automobile, lumber or metallic ores, formed
parts or electronic products like integrated circuits. From the accounting perspective, entering
goods and services are usually expensed rather than capitalized.
Foundation goods and services – These are products that are used to make other products. This
includes installations and accessory equipment. The former are items like offices and buildings
and the latter are machine tools. In contrast to entering goods and services, foundation goods do
not become part of the end product. While the majority of them are capital items, some
foundation goods can also be expensed.
Facilitating goods and services – These are products and services that help an organization
achieve its objectives. In other words, they assist and support. Facilitating goods also do not
enter the product or even the production process. Generally speaking, facilitating goods and
services are expensed rather than capitalized. Examples include market research services,
cleaning supplies and copiers. Facilitating goods can be divided into supplies and business
services.
11. Who are commercial customers? Give examples.

Commercial customer is buying goods, they tend to buy in bulk. This means that they usually get
the product they need at a discounted price. A non-industrial business consumer of energy.
One of three standard classifications of customers for commercial energy, along with
residential and industrial customers.
Commercial customers are usually service sector businesses, although some
manufacturers with low energy demands may also qualify.

12. Who are institutional customers? Give examples.

Institutional customers is a term used in the financial services industry to differentiate retail
customers and corporate customers from other financial institutions such as banks, insurance
companies and investment management companies.
In several jurisdictions financial institutions may be able to enter transactions under a more lax
regulatory environment than the other customer categories.

13. Who are governmental customers? Give examples.

Government is the biggest customer in B2B market. It purchases everything from paper and fax
machines to tanks and weapons, buildings, toilets for NASA (the National Aeronautics and
Space Administration), highway construction services, and medical and security services. State
and local governments buy enormous amounts of products, too. They contract with companies
that provide citizens with all kinds of services from transportation to garbage collection. (So do
foreign governments, provinces, and localities, of course.) Business-to-government (B2G)
markets, or when companies sell to local, state, and federal governments, represent a major
selling opportunity, even for smaller sellers. In fact, many government entities specify that their
agencies must award a certain amount of business to small businesses, minority- and women-
owned businesses, and businesses owned by disabled veterans.

There is no one central department or place in which all these products are bought and sold.
Companies that want to sell to the government like U.S. government should first register with the
Central Contractor Registry. The GSA helps more than two hundred federal agencies buy a wide
variety of products purchased routinely. The products can include office supplies, information
technology services, repair services, vehicles, and many other products purchased by agencies on
a regular basis. Consequently, it is a good starting point. However, the GSA won’t negotiate a
contract for the NASA toilet or a fighter jet. It sticks to routine types of purchases.
14. How do the commercial customers buy?

The business buying process is split into eight stages. The new task buying contains all of these
steps whereas the straight or modified rebuy may skip some of them. These stages are as follows.

 Problem Recognition
 Description of General Need
 Specification of Product
 Search of Supplier
 Proposal Solicitation
 Selection of Supplier
 Order-Routine Specification
 Performance Review

1. Problem Recognition

In the first stage of business buying process, a certain problem is recognized by someone in the
organization, so that it can be solved through the purchase of any new product or service. The
external or internal stimuli result in the creation of such recognized problem. In case of internal
stimuli, the management of the organization may determine to manufacture a new product or any
production machine become damaged that needs certain new parts. Another internal reason may
be that the supplier is not providing effective goods at a fair price. On the other hand the external
elements may be in the form of any new idea of a product at a trade show or seeing new
advertisements or any favorable offering by a sales person etc.

2. Description of General Need

This stage starts when a clear need has been identified by the organization. In this step
description about the general need has been prepared which shows general characteristics and the
quantity of the required product. In case of simple items, this process is linear whereas in case of
complex items in the process involves a team of buyer, engineers and other professionals who
work together to agree on the desired product. The significance of reliability, price, durability
and other features are ranked for the desired product or service by the team.

3. Specification of the Product

In this stage, the organization that is involved in the business buying process prepares a detailed
list of the technical specifications of the desired product through value analysis conducted by the
engineering team. In value analysis, careful studies are made to determine the cost reduction
production process for the redesigning or standardization of the desired product or service. The
professional team covers the best features and characteristics required in purchasing the product.
The selling organizations can also use this step to increase their sales.
4. Search of Supplier

In this step of the business buying process, the buying organization searches the suppliers in
order to make a purchase with the best one. For this purpose a list of competitive vendors is
prepared by the buying organization through the use of supplier directories, aid of a computer
(internet), or contacting other organization for obtaining of recommended names. The internet is
increasingly becoming a platform for such searching now-a-days as most of the organizations are
entering into this virtual world. In case of buying of new and expensive product, the more time is
consumed in searching of suitable suppliers that can best meet the specifications of the required
product. The suppliers should keep themselves enrolled on the relative directories to make their
good reputation in the market. Moreover the sales person should also target the supplier
searching organizations in the business market.

5. Proposal Solicitation

In this stage the suppliers are asked to submit their proposals. In some cases, some suppliers send
only their salespersons or simple catalogs. But when the desired product is expensive and
complex than proper formal presentations and detailed written proposals are required from the
qualified suppliers. The marketers of the business organizations should also be skillful in writing
and presentation of business proposals to the buying organizations.

6. Selection of Supplier

At this stage the final supplier is selected from the list of potential suppliers who have submitted
their proposals to the buying organization. The selection team of the buying organization reviews
the proposals of all suppliers and list the offered attributed on the basis of the rank of importance.
Following are some of the main attributes that serve as the basis for the selection of potential
suppliers.

 Quality of product
 Delivery time
 Ethical corporate behavior
 Reasonable price
 Honest communication
 Past performance and reputation
 Repair and maintenance services etc

7. Order-Routine Specification

The order-routine specifications are prepared in this step which contains the order having a final
list of the specifications, the selected supplier, delivery time, quantity required, price and repair
and maintenance services etc.
8. Performance Review

This is the last stage of the business buying process in which the performance of the supplier is
reviewed by the buying organization. For this purpose the buying organization contacts with the
customers or users of the purchased product and ask them to provide their experience of using
that product.

15. What is a fixed price contract and a cost reimbursement contract?

A fixed-price contract is a type of contract where the payment amount does not depend on
resources used or time expended. This is opposed to a cost-plus contract, which is intended to
cover the costs with additional profit made. Such a scheme is often used
by military and government contractors to put the risk on the side of the vendor, and control
costs. When such contracts are used for innovative new projects with untested or undeveloped
technologies, such as new military transports or stealth attack planes, it can and often results in a
failure if costs greatly exceed the ability of the contractor to absorb unforeseen cost overruns.

A cost-reimbursement contract is a contract where a contractor is paid for all of its allowed
expenses to a set limit, plus additional payment to allow for a profit. Cost reimbursement
contracts contrast with a fixed-price contract, in which the contractor is paid a negotiated amount
regardless of incurred expenses. Federal agencies can choose among three main contract types to
procure goods and services: fixed-price, time-and-materials, and cost-reimbursement. Each
contract type comes with a different level of cost or performance risk for the government.
Different types of cost-reimbursement contracts can be used based on whether incentives, award
fees, or other arrangements are offered to motivate contractor efforts and discourage contractor
inefficiency and waste.

16. What role do manufacturers play in a B2B market?

Research and development, Production, Quality control, Shipping, Customer support, sales and
marketing are the role of manufacturers in B2B Market. Maximum Indian manufacturers are
Page | 9 Group 8 located in only four states, most large metropolitans’ areas are lucrative
business markets. Smaller manufacturing firms also constitute an important business segment.
Geographic concentration of industry means that a large potential volume exists in a given area
but each buyer’s requirement may still vary significantly. Example: Intel sells microprocessors to
few players like Dell and HP which in turn target a larger base of customers, the potential
computer buyers. Smaller manufacturing firm is an equally important business segment where
more than half of the Indian firms employ less than 80 employees.

17. The government uses two purchasing strategies in general. What are they?

The government uses two general purchasing strategies:  Formal Advertising: This strategy,
also known as open bid, is followed when the products are standardized and the specifications
are straightforward. Here the contracts are generally awarded to the lowest bidder, however, if
there is a document proof-that the bidder cannot fulfil the contract, the next-to lowest bid will be
selected.  Negotiated Contract: This contract is used by the government when the purchase of
goods and services cannot be relied on price alone. The complex scientific equipment used for
R&D in DRDO labs is an example for negotiated contract. There is a competitive bidding with
involves negotiation with different suppliers simultaneously, to get the best product at best price
taking performance into consideration.

18. What is a formal advertising? At what situation, it is done?

B2B-focused businesses are unable to sell their products to customers on average. A wood mill
or large-scale software company cannot sell its product to an individual client because of the
nature of its products. This implies that as prospective customers they must seek out particular
businesses or sectors. Hence it is important for them to advertise their products. Formal
advertising is the advertising type in which the organization must comply with the rules and
regulations to transmit data to the public. The business may use technology or other sophisticated
communication media in official advertising. Formal advertising occurs when communication is
usually official and is more frequently used for job posts, government notices or offers.

19. What is a negotiated contract? At what situation, this strategy is adopted?

A negotiated contract is a contract that governs services whose authorizing statute requires the
department to select the performing entity using a process other than the use of competitive bids.
One or more items must be evaluated, scored and/ or negotiated to determine which entity will
be awarded the contract. There is a competitive bidding with involves negotiation with different
suppliers simultaneously, to get the best product at best price taking performance into
consideration.

20. How important are institutional customers in B2B?

The institutional market consists of schools, hospitals, nursing homes, and other institutions that
provide goods and services to people in their care. Institutions differ from one another in their
sponsors and in their objectives. Many institutional markets are characterized by low budgets and
captive patrons. Hospital patients, for instance, have little option but to eat any food supplied by
the hospital. A hospital-buying officer must decide for patients on the quality of food to
purchase. The purchasing goal is not profit because the food is supplied as part of a complete
service package. The goal is not rigorous price reduction — patients receiving bad quality food
will complain to others and harm the reputation of the hospital. The buying officer of the hospital
must therefore search for institutional food suppliers whose quality meets or exceeds a certain
minimum standard and whose prices are small. Many marketers establish distinct divisions to
satisfy institutional buyers ' unique features and needs.
21. What is group purchasing in institutional buying? Why is it adopted?

An important factor in institutional buying is Group Purchasing. Hospitals, Schools and

universities may join cooperative purchasing association to secure purchasing efficiencies.
Group buying allows institutions to enjoy lower prices, improved quality, reduced administrative
costs and greater competition. In addition to responding to the needs of individual institutions,
the business marketer must be prepared to meet the special requirements of cooperative
purchasing groups and large hospital chains.

22. Who are users in business markets? Explain with examples.

As a commercial enterprise user purchase industrial products or services to produce other goods
or services that are, in turn, sold in the business or consumer markets. User customers purchase
goods- such as computers, photocopies, or automated manufacturing systems- to set Page | 11
Group 8 up or support the manufacturing process. Though technically these markets are also part
of the supply chain, members of the business user market do not, in most cases, engage or
directly assist in production activities.

23. Who are OEMs in business markets? Explain with examples.

OEM is an acronym which stands for Original Equipment Manufacturer. OEM are a type of
commercial enterprises which purchase industrial products which are incorporated into other
products and sold by businesses in consumer market. For Example: - MRF is a tyre manufacturer
who sells tyre to Ford India for its line-up of cars in Indian market, so Ford India is an OEM and
MRF is Supplier for OEM. Another Example is Intel, as we all know it produces processor chips
which are being purchased by companies like Dell and Lenovo to be installed in their systems
and they sell systems in consumer markets. So, Dell and Lenovo are OEM’s.

24. Who are dealers and distributors in business markets? Explain with examples.

Dealers and Distributors are commercial enterprises those who purchase industrial goods with
the purpose of reselling it to Users and OEM’s which are already being explained before. As all
the manufacturers cannot sell their products to User and OEM’s directly because company will
have to deal with large number of organizations, which make dealers and distributors much
feasible options. Because if a manufacturer opts for dealers or distributors, they are reducing the
number of contacts which will lead to reduction in administration cost.

25. Define entering goods. Give example.

Products lying under the category of entering goods are basically raw materials and
manufactured materials and parts which are further used by the companies to make finished
products. These can be categorized as raw materials i.e.: semi-finished goods which are used by
the organization to make finished goods and Manufactured Materials and Parts that are go for
more processing and is in semi-finished state. This acts as a crucial component in the making of
final goods which are ready to be sold in the market. For e.g.: - Steel

26. Define Foundation Goods. Give example.

The main characteristic for foundation goods is that it is a capital expenditure. As capital goods
are used up or worn out, a portion of their original cost is assigned to the production process as a
depreciation expense. It includes both Installation as well as Accessory equipment’s.
Installations: - This includes those goods which remain in the organization for a long term and
the investment is also high as compared to other entry level goods. Goods which fall under the
category of Installation goods are Building, land rights, and fixed equipment. The demand for
these products demand on many environmental factors such as loan rate, land rate in a particular
period of time. For e.g. a construction site for resort will invest a huge amount of money in its
infrastructure thereby, spending on land rights and other goods.

27. Define Facilitating Goods. Give examples.

Facilitating goods are the supplies and services that support organizational operations. Because
these goods do not enter the production process or become part of the finished product, their cost
are handled as expense items. Supplies: - For the smooth functioning of the organization there is
a day to day requirement for goods which is required for production. These goods ranges from
Papers and stationery required within the organization to maintain the file and repair items which
help to fix machines.

28. What are farm products? Give any 5 examples of farm products sold to companies?

Farm products are crops and livestock raised on farms. Specifically, a crop is any cultivated
plant, fungus, or alga that is harvested to be used for food, clothing, or other uses. Meanwhile,
livestock refers to animals that are raised for food. Major farm products include corn, cotton,
milk, beef, and eggs. They can also be used as feedstock for other industries; for example, cotton
is a feedstock for the clothing industry, and corn is a feedstock to the ethanol industry.

29. What are natural products? Give any 5 examples of natural products sold to
companies?

Natural Products are the substances made from the living organisms and originate in nature. It
can be produced by naturally, total synthesis or semi-synthesis process which plays a vital role in
the medicinal chemistry which deliver tricky targets throughout drug discovery process.
Mushrooms that are used by restaurants and hotel industry for preparation of food.
30. What are component materials? Give any 5 examples of component materials sold to
companies.

Component Materials can be consumed in any product, but cannot themselves be used in other
components.  Reinforced concrete and masonry.  Composite wood such as plywood. 
Reinforced plastics, such as fibre-reinforced polymer or fiberglass.  Ceramic matrix composites
(composite ceramic and metal matrices)  Metal matrix composites.

31. What are component parts? Give any 5 examples of component parts sold to
companies.

It can be categorized as something (as a building or part of a building) that cannot be removed
without substantial damage to itself or to the immovable property to which it is attached.

For example, a motherboard includes electrical connectors, a printed circuit board (PCB),
capacitors, resistors, and transformers, CD player in a stereo system

32. What are installations? Give any 5 examples of installations sold to companies.

Installations are major capital items that are typically used directly in the production process of
products. Some installations, such as conveyor systems, robotics equipment, and machine tools,
are designed and built for specialized situations. Other installations, such as stamping machines,
large commercial ovens, and computerized axial tomography scan machines, are built to a
standard design but can be modified to meet individual requirements.The purchase of
installations requires extensive research and careful decision making on the part of the buyer.
Manufacturers of installations can make their availability known through advertising. Actual sale
of installations, however, requires the technical knowledge and assistance that can best be
provided by personal selling.

Equipment or facilities that require large capital investment, and have long useful life. Such
goods include buildings, structures, manufacturing plants, cranes, presses, and heavy
construction machinery.

33. What are accessory equipment? Give any 5 examples of accessory equipment sold to
companies.

Accessory equipment is generally less expensive and short-lived compared to major equipment
and is used in the conducting of business. Accessory equipment also tends to be purchased by a
widely dispersed market. Light bulbs are supplies. Accounting services represent a business
service.
34. What are supplies? Give any 5 examples of supplies sold to companies.

Supply is the quantity of product or service a business has to offer to its client at a particular
point in time. For a physical, brick and mortar store this means the inventory a business holds on
their premises and within warehouses that it can sell to customers. For a drop shipper, supply is
the amount of product a supplier can guarantee to a merchant. To supply means to make
something available to somebody, a company, or other entity. The entity needs or wants that
thing. If I supply somebody with something, I provide them with it.

35. What are business services? Give any 5 examples of business services sold to companies.

Business services is a general term that describes work that supports a business but does not
produce a tangible commodity. A good business service aligns IT assets with the needs of a
company's employees and customers and support business goals, facilitating the ability of the
company to be profitable. For e.g. – Software, Consulting, Training, Insurance, Media.

35. As a B2B marketer, what marketing strategies would you adopt to sell raw materials.
Explain with examples.

Those that are in the supply chain industry hardly run out of businesses if they know how to
network with key stakeholders that need a regular supply of what they have. As an aspiring
entrepreneur with good marketing skills, one of the thriving and highly profitable businesses that
you can start is to go into raw materials supply.
Those that are involved in the raw materials supply business engage in the movement of raw
materials and unfinished goods from the point where they are generated to the point where they
are transformed into finished goods. Raw materials could be lumber, sawdust, raw latex, crude
oil, cotton, coal, raw biomass, leaves/herbs, roots, iron ore, logs, or even water.
Although starting a raw material supply business can be capital intensive because you would
need money to purchase delivery/supply trucks and also money to purchase or make down –
payment for the raw materials you intend supplying. But, if you know how to go about it and you
have good credit ratings, you can successfully start a raw material supply business with little or
no cash.

All you need to do is convince the wholesaler that you will give them their money when you get
paid after supplying. It is a cool way of starting a business with just an idea and integrity.

Example:

Adhesive Supply Business

Adhesive or starch as it is called in some quarters is a raw material that is used in the laundry
industry, book production industry, carton manufacturers and a host of companies. If you are
interested in starting a raw material supply business, then you should consider going into
adhesive supply business.
36. As a B2B marketer, what marketing strategies would you adopt to sell manufactured
materials and parts. Explain with examples.

Strategy 1- Web Presence

57% of the purchase decision is complete before a customer even calls a supplier.
Manufacturing has been an industry slow to adopt new marketing tactics and technologies,
favouring tried and true methods (print, advertising, industry events). However, the change in
buyer behaviour now demands that a significant amount of company and product information be
available for online consumption.
Optimize your website with clear navigation paths, in-depth product information, and a solid
SEO framework and you’ll deliver the visitor a rich online experience with your
brand. Prospects can do research at will and the website will provide contact information and
calls-to-action to move them through the buying cycle when they’re ready. Provide both end-
user and reseller partner pages with sections dedicated to the benefits for each of those
audiences.
Use your social channels to expand brand awareness and grow your database of followers. It’s
optimal to focus on the channels that reach your target audience whether you’re more consumer
oriented (Facebook, Pinterest) or business (LinkedIn, YouTube).
As an expert in your field, you’re in a unique position to publish content that engages your target
audience and establishes your company as a knowledge source. Producing how-to articles,
thought-leadership articles, un-boxing videos, and industry education pieces on your website
gives your visitors valuable information to read and means they’re spending more time on your
owned channels.
Strategy 2- Reseller Channel Support
Manufacturers have a symbiotic relationship with their distributors and resellers. The latter two
rely on the awareness and demand generated by the manufacturer- as well as the marketing
support- and manufacturers need their distributors and resellers to sell through product.
Resellers and distributors often operate at a regional level and therefore understand their markets
well. Providing customizable marketing and sales materials allows them to target their audience
with personalized assets of their choice. Hundreds of distributor and reseller partners all
executing their own marketing programs can also present a branding challenge. Marketing asset
management tools provide access to properly branded materials that can be edited locally as
needed, which enables your partners to deliver customized marketing materials to their
customers and gives them the power to grow their business and yours. See “How to Boost the
Performance of Channel Marketing”
Develop sales incentives and contests to build loyalty and boost retention amongst your channel
partners. In a Maritz Channel Market Study “More than two-thirds (of participants) say rewards
and incentives are extremely important to their job satisfaction. Incentive programs should focus
on individual rewards and be refreshed at a regular cadence, for instance quarterly. The best
programs engage, support, and build an individual’s business and in turn, promote the advocacy
of your products.
Buyers’ tactics will continue to shift as technology advances and manufacturers who are willing
to adapt their marketing strategies to that shift will benefit from their efforts. Focusing your
marketing where your customer is searching and supporting their journey whether online or in
the channel, not only increases sales but develops the brand overall.
37. As a B2B marketer, what marketing strategies would you adopt to sell installations.
Explain with examples.

Smart salespeople don’t sell products, they sell solutions. installers are an important part of your
business. It doesn’t matter whether they are on your payroll or subcontractors; they are most
valuable to you.
Although stores hate to admit it, installers will either make or break their business. Since they are
the last person the customer sees, whatever impression they leave with the customer, it will be
lasting. Despite this, how many stores actually spend time certifying, training or differentiating
their installers. If it were my business, I would change my department to “custom installation.”
There is no “one size fits all” so why not talk about custom. Besides, the term “custom” signifies
something made especially for the customer. It also implies that the service is worth more
money. I know one company that called their service a “white glove installation.” There
installers would go into the customer’s house wearing white gloves and taking them off during
the installation. Apparently, customers think that it’s quite unusual and love the treatment.
Apparently, they get better tips also! Installers can be included in your product and customer
service training. The more they are included in your business and understand how you do
business; the more they will be able to add to your business. Certifications upgrade the level of
your installers. Consumers understand that trades are licensed and the more training someone has
the more they’re worth. There are various installation certifications available.
38. As a B2B marketer, what marketing strategies would you adopt to sell supplies. Explain
with examples.
You need to carefully pinpoint the time of the lagging of the business. You need to figure out if it
happened after the recession hit. Why? This is because of the fact that this will help you to
diagnose the root cause of the problem and how to give a possible solution to it. That is not
always a proven way but that will give you a bright idea.
Another aspect that will serve as your alas in the business during recession is the excellence of
the customer service. In accordance with the Small Business Administration (SBA), almost 70%
of the customers switch to other office supplies businesses because they feel that the staffs done
treat them well. This implies that before you come up with survival measures, the customer
service must be ensured first.
You also need to work and work. During a recession, one of the temptations you an encounter is
trimming your staff down. However, studies reveal that most of the customers don’t like
excessive automation just like a phone voice recognition software. They want to do business
with a real person because they feel that their concerns are more addressed. Another
disadvantage of cutting too much labor is that you will lose staffs to help you deal with the flow
of the customers.
In order for you to ascertain that the trust and loyalty of the customers will be retained, the best
thing you can do is to offer them promotions and special deals. If you are wondering who among
your customers the loyal ones are, you can use the following: mailing lists, VIP clubs and buyer
cards. Since it is vey hard to get new customers during recession, the best thing to do is take
good care of the ones you have.
Just like any other business forms, marketing can be the one that will make you continue doing
business successfully because this is the ticket for you to get more leads. Marketing does not
have to be expensive; you just need to be creative.

39. Describe the key elements of customer value proposition.

In the modern world’s ultra-competitive marketplace, a critical factor in determining the success
of a company is how good of a job it does of identifying, expressing and communicating a
unique value proposition to potential customers.
A company’s unique value proposition is a primary marketing tool. A value proposition is a
concise statement of the value that the company offers through its goods or services. The
proposition is crafted to communicate the idea that consumers can receive the highest possible
value or benefit from purchasing the company’s products, greater value or benefit than they can
receive from any other company’s products. A company's value proposition is often included in
its mission statement. There are essentially three elements to a good value proposition. The first
involves identifying the company's main target market, the consumer group that is likely to
provide the bulk of the company’s sales. A business needs to have a clear idea of who its ideal
customer is and shape its value proposition to appeal to that customer. A company must identify
key demographics, such as age, singles versus families or income levels and then design its value
proposition to speak to that target market.
The second key element of a value proposition is the specific value the company’s products
offers. A company must clearly answer for its potential customers the question of why they
should choose the company’s products over all other available choices. Some companies offer
value in the form of lowest price. Others offer the value of highest quality. Time saving is
another potential value. If a company markets a proprietary technology or product not available
from any other source, then that is a unique value that it offers consumers.
The third element of a value proposition covers how a company meets the individual needs or
desires of its customers. This element is aimed at appealing to the emotional side of the customer
and establishing a relationship that hopefully engenders ongoing brand loyalty.
As an example of using a well-crafted, unique value proposition, assume a small business in the
highly competitive market of film lighting equipment seeks to enter the market with a strategy
that enables it to compete with much larger, well-established companies. The company identifies
its target market as lighting directors working in the film and television industry who are
concerned with being known for providing the best possible production lighting. The lighting
company distinguishes itself from its competitors, much larger companies that carry every
possible equipment brand, by carrying only one brand of equipment, the brand that research has
shown as being universally considered the best. The company then goes to market with the
slogan, “Do you want to be known for providing the best lighting, or the cheapest lighting?” Not
only can the company be successful in gaining a large share of the market, but it can also do so
while selling the higher-priced, premium equipment brand.
Having an easily communicated and recognizable value proposition is increasingly important in
the modern world where people are bombarded by an overload of information from a variety of
media sources and where there are numerous competitors for a company’s business. Successful
firms craft their unique value propositions prior to entering the marketplace and design their
business operations in accord with their value propositions.

40. What are the key roles of a B2B marketer?

B2B Marketers in technology wear many different hats. They help to develop new product ideas
based on their industry experience, market knowledge and relationships with prospects and
clients. They manage or assist engineers with new product development. They translate product
features into client benefits. They coordinate the communications in all departments, from
engineering to sales. They own what the company website says and how it says it. They produce
the technical content — blog posts, newsletters, webinars, etc. — that the company releases to
prospects and clients each month. They are the gatekeepers of how the company is perceived in
the market place. Being a B2B marketer is by no means an easy job.

B2B marketers have 5 key functions:

Product Development:
Prior to developing a new product or feature, the engineering team needs to identify which
problems potentiel users want to solve, and what requirements does the market have. Market
research, therefore, is conducted by B2B marketers who probe for potential users and
competitors.
Go-to-Market Strategies:
Once the product or the feature is developed, its positioning in the market place must be defined.
This is another task for B2B marketers, whose role is to translate the product features into client
benefits and to identify the targeted customers.
Content Creation:
The new product or feature is ready to be launched. The current and potential customers must be
informed about it. They will want to know how it can solve a problem they might have. They
show an interest, but still want more information to be truly convinced of its benefits. B2B
marketers, therefore, must provide all potential customers with technical documentation and
marketing content related to the product or feature. This may include white papers, webinars,
blog posts, website pages, email campaigns, and more. B2B marketers are responsible for the
creation of such technical content.
Design:
The technical content marketing must be presented in different formats. The website must be
designed to attract visitors. The newsletters must contain images and infographics that clearly
show the plus value of the new product or feature. Furthermore, the sales presentation must
illustrate the anticipated results. Design is another function that must be supervised by B2B
marketers.
Analytics:
Finally, B2B marketers have no choice but to know about new tools that might help them to
analyze which web pages —or emails or posts— are read the most, and by whom. This enables
them to detail the sales funnel and qualify those who may be prospects for the company. B2B
marketers must know how to calculate these metrics, as well as how to optimize the ROI.
None of these functions are easy to do by a single person. A B2B marketer, therefore, is a
difficult position to fill in technology. Still, the job plays an important role, one of the most
important for the success of your company and your new products.

41. What are the trends in B2B marketing?

1. Complex Attribution is Far From Widespread

When it comes to measurement, Wpromote’s study paints a mixed picture. On the bright side,
when asked which attribution model they use, about 30% of respondents said they had a multi-
channel attribution model in place, which captures all influencing touch points. However, while
more than one-third (35.4%) of B2B marketers reported using instead some combination of first
touch and/or last touch attribution models, more than one-quarter (28%) do not have any
attribution model in place at all.
As such, it appears the challenge of measuring the impact of spend is far from over. As noted in
a previous study from Demand Gen Report, just 7% of B2B marketers rate their company’s
current ability to measure and analyze marketing performance as “excellent” – a situation caused
by a wide range of complex challenges, such as a lack of ability to measure activity between
specific buyer stages, the difficulty in measuring impact across channels and campaigns, or even
just a lack of KPIs to measure against.
2. Video Emerges as Lead Gen Tactic of Choice
According to Wpromote, while lead volume ranks fourth in metrics B2B marketers use to
measure digital marketing performance, quality and quantity of leads are still primary goals of
marketers.
The trick is finding the right content to generate those quality leads. Video was named the top
content type for driving leads by survey participants. In fact, other research has found that
nearly 7 in 10 B2B marketers plan on adopting video marketing this year.
Video is also being heavily pushed by B2B social network LinkedIn, which by its own admission
has gone “all-in”, as it develops new video solutions for advertisers.
For the most part, the emphasis on what content is being produced matches that of the content
that is seen to be driving leads. Just as video is the content that drives the most leads, it is also
the content that the B2B marketers surveyed said they are producing the most. Coming in second
is blogs which were ranked third for driving leads. Infographics, case studies and webinars round
out the top five in content production.
3. ABM Use Continues To Grow
Lead generation is a strategy that has long been employed by B2B marketers, and while this
strategy is not going away anytime soon, account-based marketing (ABM), which relies more on
the quality of a few key targets as opposed to a large quantity of MQLs, is becoming the strategy
of choice for many organizations. Earlier research by Bizible found that 70% of B2B marketers
are using ABM to some extent.
With this in mind, it is surprising to see that more than half (51%) of respondents to this current
survey reported that they had not tried or were not currently engaged in using an account-based
marketing (ABM) strategy. The upside is that for those participants who do engage in some sort
of ABM strategy, just about half (49%) find it to be an effective strategy, with only one-sixth not
finding the strategy effective for them.
4. Advanced Technology Adoption May Be Slowing
Martech occupies the largest share of CMO spend, according to Gartner’s latest CMO Spend
Survey. But with an ever-growing category list of technology solutions, and with technology
already accounting for such a significant slice of budget, could there be saturation in the market?
Adopting technology that is meant to aid in marketing efforts may be somewhat lagging on the
B2B front according to the report. While close to half (48%) of respondents say they currently
have a marketing automation system in place, more than 4 in 10 (43%) report not having one and
a small percentage are unsure.
As technology becomes more advanced, so does the lag in adoption. More than half (54%) of
respondents said they have not tried or do not currently use Artificial Intelligence (AI) or
predictive software. However, for the 39.7% that do use these types of software, nearly half
(45.7%) find them to be effective. Only time will tell as to whether the rest of B2B marketers
will add yet another type of software to a growing technology stack, particularly as data has
suggested that few are currently using sophisticated martech features

42. What is ABM (Account Based Marketing) and how it is useful in B2B?

Account-based marketing (ABM) is a highly focused business strategy in which a marketing

team treats an individual prospect or customer like its very own market. The marketing team can
create content, events, and entire campaigns dedicated to the people associated with that account,
rather than the industry as a whole.
In the above context, ABM really just what it sounds like -- marketing that's based on a specific
customer, existing or prospective. It's a market of one. This practice is typically done by
enterprise-level sales organizations, and is most beneficial to business-to-business (B2B) efforts.
ABM is a particularly useful for organizations with multiple buyers or stakeholders. Part of its
goal, says Sam Balter, a senior marketing manager at HubSpot, "is to address the needs of an
organization by connecting with all of the stakeholders within it. That's one reason why it works
so well in B2B -- oftentimes you have to work with five or more stakeholders in a given sale."
That might seem a little tricky -- especially, says HubSpot's Senior Product Marketing Team
Manager Jeff Russo, "from an execution standpoint."

Benefits:
 It's personalized to your audience
 It's easier to see potential return on investment.
 You spend less time on marketing campaigns that don't yield new business.
 It shortens the sales cycle.
 It fortifies your relationship with existing clients.
 It easily aligns your sales and marketing teams.

43. What are the steps involved in organisational buying process?

The organizational buying process contains eight stages. Although these stages parallel those of
the consumer buying process, there are important differences that have a direct bearing on the
marketing strategy. The complete process occurs in the case of a new task. Even in this situation,
however, the process is far more formal for the industrial buying process than for the consumer
buying process.
Most of the information an industrial buyer receives is delivered through direct contacts such as
sales representatives or information packets. It is unlikely that an industrial buyer would use
information provided through a trade ad as the sole basis for making a decision.
Problem recognition. The process begins when someone in the organization recognizes a
problem or need that can be met by acquiring a good or service. Problem recognition can occur
as a result of internal or external stimuli. External stimuli can be a presentation by a salesperson,
an ad, or information picked up at a trade show.
General need description. Having recognized that a need exists, the buyers must add further
refinement to its description. Working with engineers, users, purchasing agents, and others, the
buyer identifies and prioritizes important product characteristics. Table 4.1 lists several sources
of information for many industrial customers. Armed with extensive product knowledge, this
individual is capable of addressing virtually all the product-related concerns of a typical
customer. To a lesser extent, trade advertising provides valuable information to smaller or
isolated customers. Noteworthy is the extensive use of direct marketing techniques (for example,
toll-free numbers and information cards) in conjunction with trade ads. Finally, public relations
plays a significant role through the placement of stories in various trade journals.
Product specification. Technical specifications come next. This is usually the responsibility of
the engineering department. Engineers design several alternatives, depending on the priority list
established earlier.
Supplier search. The buyer now tries to identify the most appropriate vendor. The buyer can
examine trade directories, perform a computer search, or phone other companies for
recommendations. Marketers can participate in this stage by contacting possible opinion leaders
and soliciting support or by contacting the buyer directly. Personal selling plays a major role at
this stage.
Proposal solicitation. Qualified suppliers are next invited to submit proposals. Some suppliers
send only a catalog or a sales representative. Proposal development is a complex task that
requires extensive research and skilled writing and presentation. In extreme cases, such proposals
are comparable to complete marketing strategies found in the consumer sector.
Supplier selection. At this stage, the various proposals are screened and a choice is made. A
significant part of this selection is evaluating the vendor. One study indicated that purchasing
managers felt that the vendor was often more important than the proposal. Purchasing managers
listed the three most important characteristics of the vendor as delivery capability, consistent
quality, and fair price. Another study found that the relative importance of different attributes
varies with the type of buying situations. For example, for routine-order products, delivery,
reliability, price, and supplier reputation are highly important. These factors can serve as appeals
in sales presentations and in trade ads.
Order-routine specification. The buyer now writes the final order with the chosen supplier,
listing the technical specifications, the quantity needed, the warranty, and so on.
Performance review. In this final stage, the buyer reviews the supplier's performance. This may
be a very simple or a very complex process.
44. What are buying classes and buying phases? Are they related in any way?

Business Buying Classes:

Buy classes refer to buying situations that are distinguished on four characteristics: newness to
decision makers, number of alternatives to be considered, uncertainty inherent in the buying
situation, and the amount of information needed for making a buying decision. There are three
buy classes: new task purchase, modified rebuy, and straight rebuy.
 A new task purchase is a problem or requirement that has not arisen before, such that the
buying center does not have any relevant experience with the product or service.
 A modified rebuy is a situation in which the buying center has some relevant experience to
draw upon. The alternatives considered, however, are different from the ones considered the
last time a similar problem arose.
 A straight rebuy is the purchase of standard parts; maintenance, repair, and operating items
and supplies; or any recurring need that is handled on a routine basis.

Stages of the Business Buying Phases:

The main difference between B2B and B2C is who the buyer of a product or service is. The
purchasing process is different in both cases and the following is a list of the stages involved in
B2B buying:

Step 1: Recognize the Problem

 Machine malfunction, firm introduces or modifies a product, etc.

Step 2: Develop product specifications to solve the problem

 Buying center participants assess problem and need to determine what is necessary to
resolve/satisfy it

Step 3: Search for and evaluate possible products and suppliers

 look in company files and trade directories, contact suppliers for information, solicit
proposals from known vendors, examine websites, catalogs, and trade publications
 conduct a value analysis – an evaluation of each component of a potential purchase;
examine quality, design, materials, item reduction/deletion to save costs, etc.
 conduct vendor analysis – a formal and systematic evaluation of current and potential
vendors; focuses on price, quality, delivery service, availability and overall reliability

Step 4: Select product and supplier and order product

  This step uses the results from Step 3
 An organization can decide to use several suppliers, called multiple sourcing. Multiple
sourcing reduces the possibility of a shortage by strike or bankruptcy.
 An organization can decide to use one supplier, called sole sourcing. This is often
discouraged unless only one supplier exists for the product; however it is fairly common
because of the improved communication and stability between buyer and supplier.

Step 5: Evaluate Product and supplier performance

 Compare products with specs

 Results become feedback for other stages in future business purchasing decisions

This 5-step process is mainly used with new-task purchases and several stages are used for
modified rebuy and straight rebuy.

Understanding the stages of business buying and the nature of customers’ buying behavior is
important to a marketing firm if it is to market its product properly. In order to entice and
persuade a consumer to buy a product, marketers try to determine the behavioral process of how
a given product is purchased.

45. In what ways will the organisation realise its needs? Give examples.

The needs had to be recognized first and once the need gets recognized, the needs had to be
defined by the following ways:
 Extent of the problem
 Alternatives that can solve the problem
 Where the solution can be purchased

46. What are the sources will a company search, for its suppliers?
Some of the sources regarding for the supplier search are as follows:

 Newspaper advertisements

 Trade directories

 Catalogue, price lists etc.

 Trade journals
  Salesmen

 Advertised tender

 Telephone directories

 Exchange of information between similar companies:

 Trade exhibitions and fairs

 Personnel from other departments of the company

47. What qualities of suppliers will affect the buyer’s decision in selection of suppliers?
Some of the qualities that affect the buyers decision are as follows:

 No investment in the relationship

 Hidden fees
 Not good communication
 Blaming others
 Not being honest

48. What is vendor analysis?

Vendor analysis is the assessment of current or prospective suppliers with respect to their:

 Financial strength.
 Vendor’s business model.
 Capacity to supply the appropriate products and services.
Compare the vendors select the vendors with respect to their sales revenue, mark-ups, gross
margins, service etc.

49. Why understanding the dynamics of organisational buying behaviour crucial?

Market-driven firms sense market trends and work closely with their customers and vendors.
This is crucial to:

 Identify profitable market segments

 Locate buying influences within segments

 Reach organizational buyers efficiently and effectively with an offer

Each decision goes through various steps. Skipping a step can be essential to the decision-
making process.
50. What are various buying situations that would affect organisational buying process?
The three buying situations are

 New task
 Straight Rebuy
 Modified Rebuy
There are 2 approaches to New Task purchasing:

1. Judgmental Situations

2. Strategic Decisions

New Task - Judgmental Situations

 This is the greatest amount of uncertainty because there is little information or experience to
support a decision.

 To overcome this, decision-makers conduct outside research to analyze key aspects of the
buying decision.

 An example of key questions might include:

◦ What kind and model of production equipment should we purchase?

◦ Who are the available suppliers?

◦ Will they provide the services we need?

New Task - Strategic Situations

 This level of New Task purchasing is the most important because it concerns long-range
planning, larger investments and increased risk if they are wrong.

 An example of strategic questioning might include:

◦ Should we develop a new product line which demands us to buy new machinery,
retool what we have, and maybe even hire a different type of employee?

◦ What should we do?

STRAIGHT REBUY

A problem or need that is recurring or a continuing requirement.

◦ Buyers have experience in the area

 ◦ Require little or no new information

◦ Buyers operate in routine problem-solving stage

The buying decision approaches are casual approach and routine low priority approach.

MODIFIEd REBUY

 Decision makers feel there is a benefits to reevaluating alternatives.

 Internal Forces:

 Search for quality improvement

 Cost reductions

Buyers feel they can make significant advances if they review their buying situations
on a regular basis.

Often, changes in styles, materials or even alternative solutions facilitate this review.

Another reason for Modified Rebuy is dissatisfaction with present supplier.

New supplier was able to find the present supplier’s weaknesses and offered buyers
new alternatives to “fix” their problem(s).

51. Who are ‘in’ suppliers and ‘out’ suppliers?

IN suppliers need to understand developments within the buying organization so they can be
a part of the modified rebuy situation. They generally have an edge unless they are “out of
touch” with the buyer.

OUT suppliers need to create the need and influence the buying organization to consider
other alternatives. This demands superior salespersonship.

Selling company needs to offer performance guarantees, warranties and often additional
services and training.

52. What is a new task? What kind of problem solving is done during this stage?
There are 2 approaches to New Task purchasing:

1)Judgmental Situations 2)Strategic Decisions

New Task - Judgmental Situations

 This is the greatest amount of uncertainty because there is little information or experience to
support a decision.
 To overcome this, decision-makers conduct outside research to analyze key aspects of the
buying decision.

 An example of key questions might include:

◦ What kind and model of production equipment should we purchase?

◦ Who are the available suppliers?

◦ Will they provide the services we need?

New Task - Strategic Situations

 This level of New Task purchasing is the most important because it concerns long-range
planning, larger investments and increased risk if they are wrong.

 An example of strategic questioning might include:

◦ Should we develop a new product line which demands us to buy new machinery,
retool what we have, and maybe even hire a different type of employee?

◦ What should we do?

53. What is a straight rebuy? What kind of problem solving is done during this stage?
Why?
A problem or need that is recurring or a continuing requirement.

◦ Buyers have experience in the area

◦ Require little or no new information

◦ Buyers operate in routine problem-solving stage

The buying decision approaches are casual approach and routine low priority approach.

54. What is a modified rebuy? What kind of problem solving is done during this stage?
Why?
Decision makers feel there is a benefits to reevaluating alternatives.

Internal Forces:

a. Search for quality improvement

b. Cost reductions
 Buyers feel they can make significant advances if they review their buying situations
on a regular basis.

Often, changes in styles, materials or even alternative solutions facilitate this review.

Another reason for Modified Rebuy is dissatisfaction with present supplier.

New supplier was able to find the present supplier’s weaknesses and offered buyers
new alternatives to “fix” their problem(s).

55. When is strategic new task decisions and judgemental new task decisions made?
Explain with examples.
These decisions are made when the business marketers confronting a new task buying
situation which gains a differential advantage by participating in the initial stages of
procurement process.

The marketers gain information on the problems facing the buying organization. Ideas that
lead to new products originate not with the market but with the customer.

56. How will a B2B buyer choose his supplier under new task buying situation? As a B2B
marketer, what strategy would you adopt to get a new task buy deal?
Buyers choose either the judgmental or strategic decisions. Marketers who are presently
supplying other items to the organization have an edge over other firms. They can see the
problems unfolding and are familiar with the personality and behaviour patterns of the
organization. The successful marketer monitors the changing needs of the organization and is
prepared to assist new task buyers.

57. What are the types of straight rebuy? How do they differ? Give examples.
A problem or need that is recurring or a continuing requirement.

◦ Buyers have experience in the area

◦ Require little or no new information

◦ Buyers operate in routine problem-solving stage

The buying decision approaches are casual approach and routine low priority approach.

Eg: employees use a simple point and click interface to navigate through a customized
catalog detailing the offerings of approved suppliers, and then order the required items.
58. How will a B2B buyer choose his supplier under straight rebuy situation? Being an
‘out’ supplier, what strategy would you adopt to get a straight rebuy deal? Being an ‘in’
supplier, what strategy are you supposed to adopt to maintain the deal?
Many companies review this area of business every now and then, but the edge usually goes
to the supplying company. Relationships become very important.

Purchasing departments handle this situation in most cases; the determinant is who is “IN”
and who is “OUT”? “IN” seller needs to constantly reinforce their services, meet buying
expectations, continue developing relationships and be responsive to changing needs.
“OUT” sellers have a much more difficult task.

The buying company is usually reluctant to change because “OUT” sellers are unknown, they
are a big risk, and change is expensive. The old adage is: “If it ain’t broke, don’t fix it.”

59. What are the types of modified rebuy? How do they differ? Give examples.
Decision makers feel there is a benefits to reevaluating alternatives.

Internal Forces:

a. Search for quality improvement

b. Cost reductions

Buyers feel they can make significant advances if they review their buying situations
on a regular basis.

Often, changes in styles, materials or even alternative solutions facilitate this review.

Another reason for Modified Rebuy is dissatisfaction with present supplier.

New supplier was able to find the present supplier’s weaknesses and offered buyers new
alternatives to “fix” their problem(s).

LIMITED PROBLEM SOLVING

When a company has to replace a broken part, they may bypass the manufacturer and go to a
supplier of comparable upgrades.

Example: Your Epson printer breaks so you consider an HP printer instead.

 Simple Modified Rebuy: Involves narrow choices and minimal research.

 The major area of consideration is supplier relationship.

 Complex Modified Rebuy: Involves larger items, more research, extensive specification
development, a competitive bidding process and long-term relationship development with
new supplier(s).

60. What is total cost of ownership (TCO)? How would affect a business marketer and a
business customer? Explain with example.
TCO considers the full range of costs associated with the purchase and use of a product or
service over its complete life cycle.

1. Acquisition costs: selling price and transportation costs & administrative costs of
evaluating suppliers, expediting orders, and correcting errors in shipments or delivery.

2. Possession costs: include financing, storage, inspection, taxes, insurance, and other
internal handling costs.

3. Usage costs: are those associated with ongoing use of the purchased product such as
installation, employee training, user labor, and field repair, as well as product replacement
and disposal costs.