Unit-1

(KMBNMK03 B2B and Services Marketing)

Nature and Scope of Business Markets

Like final consumers, an organization purchases products to fill needs. However, its primary need—meeting the
demands of its own customers—is similar from organization to organization. A manufacturer buys raw materials
to create the company’s product, while a wholesaler or retailer buys products to resell. Companies also buy
services from other businesses. Institutional purchases such as government agencies and nonprofit organizations
buy things to meet the needs of their constituents.

 Business buying decisions, while handled by individuals, occur in the context of formal organizations.
Environmental, organizational, and interpersonal factors are among the many influences in B2B markets.
Budget, cost, and profit considerations all play parts in business buying decisions. In addition, the organizational
buying process typically involves complex interactions among many people. An organization’s goals must also
be considered in the organizational buying process.

 The B2B market is diverse. Transactions can range from orders as small as a box of paper clips or copy
machine toner for a home-based business to deals as large as thousands of parts for an automobile manufacturer
or massive turbine generators for an electric power plant. Businesses are also big purchasers of services, such as
telecommunications, computer consulting, and transportation services.

Four major categories define the business market:

1) The commercial market

2) Trade industries

3) Government organizations

4) Institutions.

Business markets are markets for products and services, local to international, bought by businesses,
government bodies, and institutions (such as hospitals) for incorporation (for example, ingredient materials or
components), for consumption (for example, process materials, office supplies, consulting services), for use (for
example, installation or equipment) or for resale . . .

The only markets not of direct interest are those dealing with products or services which are principally directed
at personal use or consumption such as packaged grocery products, home appliances, or consumer banking. The
factors that distinguish business marketing from consumer marketing are the nature of the customer and how
that customer uses the product. In business marketing, the customers are organizations (businesses,
governments, institutions).

Business firms buy industrial goods to form or facilitate the production process or use as components for other
goods and services. Government agencies and private institutions buy industrial goods to maintain and deliver
services to their own market: the public. Industrial or business marketing (the terms can be used
interchangeably) accounts for more than half the economic activity in developed countries. More than 50
percent of all business school graduates join firms that compete directly in the business market. The heightened
interest in high technology markets—and the sheer size of the business market—has spawned increased
emphasis on business marketing management in universities and corporate executive training programs.

Understanding Business Markets

In certain cases the business market is much similar to the consumer market. In both kinds people are involved
to assess the needs of products or services & perform different kinds of roles for the satisfaction of those needs.
But in general, there are certain factors that distinguish business market from the consumer market. Following
are the some of these distinguishing factors.

 Market Structure & Demand

 Nature of Buying Unit
 Kinds of Decision & Decision Process

Now, each one of these distinguishing characteristic is discussed below.

(1) Market Structure & Demand

Usually there are few, but larger kind of business buyer deal by organizations related to business market.
Moreover, these buyers are much concentrated geographically. The demand involved in the business market is
the derived demand that finally comes from the demands of final consumers. In certain cases the business
markets deal with the inelastic demand, which is not influenced by the price changes of the relative products or
services especially in the short run.

For example, if the price leather is reduced, then the demand of the shoe producer is not increased unless the
price of the producing shoes also reduces which ultimately enhances the demand of the final customers for
shoes. The demand of the business market is much more fluctuating. This means that the demand for the
business products or service changes more quickly than the demand for the consumer products or services. The
business demand is affected greatly by a small degree of increase in the consumer demand. In certain cases only
15% increase in the consumer demand would cause the business demand to be enhanced for about 250% in
coming days.

(2) Nature of Buying Unit

In the consumer purchase, the participants involved are less along with relatively little efforts. But in case of
business purchase, there are many more participants involved in the purchase process & also the increased
professional effort. These purchasing decisions are carried out by the highly professional people of the
organizations who have spent many years of their lives in learning the way to purchase the business products
effectively.

With purchase of any main items of business market, there is an established buying committee that includes a
group of technical experts along with the members of top management who collectively perform the buying
decision. The business organizations are spending much on training their brightest employees for dealing with
the business customers efficiently & effectively.

(3) Kinds of Decision & Decision Process

The purchasing decisions of the business buyers are more complex than the decisions of the consumer buyers.
Complex economic & technical considerations, large sums of money & interactions among different people at
various levels have taken place in the business purchase process. As then the business purchase process is longer
in duration therefore the decisions of the buyers are also finalized in longer duration.
Moreover, the business buying process is more formalized than the consumer buying process. In the business
purchase process occurring in the larger organizations, special efforts are exerted for the specification of the
detailed product, writing purchase orders, carefully the identification of suppliers & formal approval. The
purchasing process is also detailed through the preparation of the policy manuals by the purchasing
organization.

Finally, the buyers and sellers are highly dependent on each other in the business buying process. Normally the
customers are present at a distant place from their consumer markets. On the other hand the organizations of the
business market are present closer with one another & help their business customers at every step of their
purchase.

They assist in the definition of the problems, searching of the solutions & even after sales operations are also
supported. Moreover, their offerings are customized according to the needs of their customers. Those business
organizations that effectively assist their customers at every step of the purchase are more benefits from a larger
portion of sales in the short run.

Consumer market vs Business market

Characteristics of Consumer Markets:

On the other hand, refers to the transaction of goods and services between organizations and
potential customers.

B2C markets, on the other hand, presents a very simplified procurement process because influences
are not as complex as it is with B2Bs. The most common factors that affect consumers purchasing
decisions include; reference groups, tastes and preferences, marketing campaigns and economic
conditions.

 Behaviouristic characteristics: These include consumer interests in a product

such as how they intend to use it.
 Demographic characteristics: This is the foundation for understanding
consumers and include ethnicity, age, income, gender, occupation, religion,
nationality, social class, education and social class.
 Geographic characteristics: This is information regarding where the consumer
lives. It includes the climate, religion or how densely populated the geographical
area is.
 Psychographic characteristics: This entails the kind of lifestyle the customer
lives, their interest, opinions and attitudes as well as personal values.

Characteristics of business markets:

Business Marketing refers to the sale of either products or services or both by one organization to
other organizations that further resell the same or utilize to support their own system.

 Geographically concentrated customers: Customers in these markets are at

vast geographical locations.
 Presence of fewer but larger buyers: While the buyers may be few, they often
buy in large quantities.
 Final customer demand-driven: Since production is tailored for the final
consumer, the products are tailored towards the final consumers’ wants and needs.
  Quick fluctuation in demand: Since businesses prefer to buy sat the lowest
prices, an increase in prices decreases the products purchases since high price
selling products do not sell well in the market.
 Inelastic demand: The prices in these markets do not affect the demands as they
do not change much.
 Has a formalized buying process: The purchasing process involves following the
organization’s protocol and the complete chain of command.
 Professional purchasing units: Due to the need of maintaining a high level of
professionalism, the purchasing process is very detail-oriented.

Business markets refer to organizations, businesses or entities that acquire products and services for
use in the production of other services and products. On the other hand, consumer markets refer to
markets whereby businesses or producers sell their products or services directly to the final
consumers.

Demand

While business markets have inelastic demand, consumer markets have an elastic demand.

Buying process

While business markets have formalized buying processes whereby the purchasing process involves
following the organization’s protocol and the complete chain of command, consumer markets do not
have formalized buying processes.

Number of buyers

Business markets have fewer buyers who often buy in large quantities. On the other hand, consumer
markets have many buyers who purchase in small quantities.

Investments

While business markets invest heavily in capital equipment, consumer markets invest heavily in
marketing and promotion activities.

Decision making

Since business markets entail many products, decision making before purchases are made is slow. On
the other hand, the decision making in consumer markets is fast since impulse buying is rampant.

Market Segmentation

Business markets refer to organizations, businesses or entities that acquire products and services for
use in the production of other services and products. On the other hand, consumer markets refer to
markets whereby businesses or producers sell their products or services directly to the final
consumers.
Classification of Business products &
Customer’s products
Business products

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.

Consumer’s Product

Consumer products are products purchased for personal, family, or household use. They are often
grouped into four subcategories on the basis of consumer buying habits: convenience products,
shopping products, specialty products and unsought products.

Consumer products can also be differentiated on the basis of durability. Durable products are
products that have a long life, such as furniture and garden tools. Non-durable products are those
that are quickly used up or worn out, or that become outdated, such as food, school supplies, and
disposable cameras.

Shopping Products

Shopping products are purchased only after the buyer compares the various products and brands
available through different retailers before making a deliberate buying decision. These products are
usually of higher value than convenience goods, bought less frequently, and are durable. Price,
quality, style, and color are typically factors in the buying decision. Televisions, computers, lawn
mowers, bedding, and appliances are all examples of shopping products.

Because customers are going to shop for these products, a fundamental strategy in establishing
stores that specialize in shopping products is to locate near similar stores in active shopping areas.
Promotion for shopping products is often done cooperatively with the manufacturers and frequently
includes the heavy use of advertising in local media, including newspapers, radio, and television.

Convenience Products
Convenience products are items that buyers want to purchase with the least amount of effort, that is,
as conveniently as possible. Most are non-durable products of low value that are frequently
purchased in small quantities. These products can be further divided into three subcategories: staple,
impulse, and emergency items.

Staple convenience products are basic items that buyers plan to buy before they enter a store, and
include milk, bread, and toilet paper. Impulse items are other convenience products that are
purchased without prior planning, such as candy bars, soft drinks, and tabloid newspapers.
Emergency products are those that are purchased in response to an immediate, unexpected need
such as ambulance service or a fuel pump for the car.

Since convenience products are not actually sought out by consumers, producers attempt to get as
wide a distribution as possible through various marketing channels which may include different types
of wholesale and retail vendors. Convenience stores, vending machines, and fast food are examples
of retailer focus on convenience products. Within stores, they are placed at checkout stands and
other high-traffic areas.

Specialty Products

Specialty products are items that consumers seek out because of their unique characteristics or brand
identification. Buyers know exactly what they want and are willing to exert considerable effort to
obtain it. These products are usually, but not necessarily, of high value. This category includes both
durable and non-durable products. Specialty products differ from shopping products primarily because
price is not the chief consideration. Often the attributes that make them unique are brand preference
(e.g., a certain make of automobile) or personal preference (e.g., a food dish prepared in a specific
way). Other items that fall into this category are wedding dresses, antiques, fine jewelry, and golf
clubs.

Producers and distributors of specialty products prefer to place their products only in selected retail
outlets. These outlets are chosen on the basis of their willingness and ability to provide an image of
status, targeted advertising, and personal selling for the product. Consistency of image between the
product and the store is also important.

Unsought Products

Unsought products are those products that consumers are either unaware of or have little interest in
actively pursuing. Examples are new innovations, life insurance, and preplanned funeral services.
Because of the lack of awareness of these products or the need for them, heavy promotion is often
required.

The distinction among convenience, shopping, specialty, and unsought products is not always clear.
As noted earlier, these classifications are based on consumers’ buying habits. Consequently, a given
item may be a convenience good for one person, a shopping good for another, and a specialty good
for a third, depending on the situation and the demographics and attitudes of the consumer.

Elements of B2B offering

Branding and sub-branding

In Business-to-Consumer (B2C) markets, the role of branding and sub-branding has already been
highlighted, but Business-to-business (B2B) companies do not rely on branding as 5% of the
decision-making is only based on brand influences. Some B2B companies have created sub-brands for
every aspect of their product range in their urge to use branding strategies. However, the importance
of relationship-building over brand-building for Business-to-business (B2B) has already been
emphasized. Some Business-to-business (B2B) marketers are increasingly relying on the web and
social media to reach out to the potential market.

Price:

Business buyers are far more focused on price and value than consumer buyers, as it directly affects
their profitability. “Trends” and “style” hold much less importance in the business buying landscape.

Business-to-business (B2B) marketers need to focus on innovation

Products thrive on the innovative spirit of the companies that develop them. They, in turn, have to
depend on other suppliers to fine-tune the devices and components. Since innovations are planned
and successfully commercialized in the B2B market, the sellers need to work hand-in-hand to benefit
from new market opportunities. B2B marketers need to undertake detailed market research,
combining it with upstream information to build a complete market intelligence picture.

Business-to-Consumer (B2C) businesses are likely to be less risk-averse as they need to predict to the
whims and irrational behaviour of consumers rather than the more calculated decision-making of
businesses.

Building personal relationships

In consumer selling, the companies depend on the mass media to market their products- it includes
newspapers, television, radio, internet, and at the physical level- banners, hoardings, arches, among
others. Here, the several consumers who buy the products are not known to the company as the
products are sold through wholesale and retail channels except in the case of some products such as
Vaccum Cleaners, mobile phones, water purifiers, books that are sold online or directly at customer
premises.

Here, brand building is more important and providing incentives to channel partners who include
distributors, C&F agents, wholesalers, and retailers who in turn would push the product. However, in
Business-to-business (B2B) marketing, building a personal relationship with the key decision-makers
in the target company is very important. Often the marketing team members are the brand
ambassadors. Therefore, the first impression of a company is formed during the first visits by
salesmen to pitch for the account.

Less number of buyers and probably more sellers

Unlike a consumer market where there could be thousands and millions of buyers, the Business-to-
business (B2B) market is more restricted to a limited number of perhaps large and medium scale
buyers who have the option to choose from several suppliers. The Business-to-business (B2B) market
works on the Pareto Principle of 80: 20, whereby eighty percent of the suppliers vie for 20% of the
buyers in the market. However, the few key business buyers may be buying in large quantities
compared to an average consumer in the market whose spending will be limited to a few thousand
dollars for that product category.

The limited number of buyers presents a challenge and an opportunity for sellers as the process
involves presentations, creating awareness, working closely with a client to make modifications to the
product if required, do the selling process and thereafter provide after-sales service.
Rational buying

Unlike a normal consumer who buys from retail which could be triggered by a variety of factors
including status, impulse buying, conspicuous consumption and so on, the business house buys based
on rational analysis of cost and benefits to the company.

Consumers are less likely to have full information of the products or services they buy, but business
houses base their buying on several parameters with the objective of making profits to the company
or a return on investment (ROI).

With the proliferation of credit cards and more disposable income at the hands of a consumer,
spending habits have changed. They could buy without cash in hand and pay in six months or one
year equated monthly instalments.

The job of Business-to-business (B2B) marketers becomes challenging as the buying is based on
critical analysis of pros and cons; however, buying could also be based on the reputation of the
supplier and his previous track record. No B2B buyer will risk his stake on an unknown product, even
if cost factors are favorable for the company.

Business buying is a complicated process

Business buying is a complicated process that may involve a various hierarchy of decision-makers and
final approval from the finance department or sometimes even by the board of directors if it’s a major
purchase. Moreover, decision-makers keep changing, and that creates a huge problem for Business-
to-business (B2B) marketers. Some companies may go for the lowest quote as their objective is to
keep costs down and earn more margin on product sales.

Business purchases are classified into low risk, low-value purchases that involve decision making at
lower levels, low-risk, high-value goods that require the approval of technical and finance levels, low-
value high risk involving specialists and purchases, and finally, high-value high-risk purchases
involving senior decision-makers in the company.

Complexity of products

Consumer products are bought based on brand building and awareness created by the company.
Consumers may not be bothered about the finer technical details of the product, but the company
needs to evaluate it in detail and see whether customization is required or changes in product
specifications are required.

The Business-to-business (B2B) marketer needs to be armed with all the technical information and
standardization protocols to gain access to the company’s top decision-makers. Information provided
should be factual and not a value-building created in the mind of the buyer. On the other hand, a lot
of investment required for brand building and value creation in the mind of the consumer can be
eliminated In a sale based on ‘technical’ parameters.

Fewer Segmentation and needs

In a consumer market, a particular product could be divided into different segments based on need,
buying power and features. There could be a set of brands from a company that is in the premium
segment- Timex Watches, Unilever consumer products, Levis jeans may have different offerings at
different price points that cater to entry-level, average, and premium buyers.
However, the industrial buyer is not looking at products for end consumption and hence not bothered
to look at them from the perspective of a consumer. Segmentation of the market is much lesser as
whims, insecurities, and indulgences are not the factors that drive the purchasing.  Several people are
involved in Business-to-business (B2B) decision making and segments are based on price, quality,
service, and partnership. The challenge for Business-to-business (B2B) marketer is to focus on the
right segment and work with them to evolve a long-term strategic partnership although limited
segmentation helps to an extent when compared to consumer markets.

Long-term buying

For an average consumer buying fast-moving consumer goods (FMCG), a purchase could be for a
lifetime at least for 5 to 10 years, as in the case of TV, Refrigerator, microwave oven, and others.
Groceries, grains, and consumable goods may be required on a continuous basis.

In the Business-to-business (B2B) industry, it could be a requirement of a component or kit on a

continuous basis until a particular brand or product may be taken off from the market. Or changes in
design or product specifications may make the particular device, component, or kit useless or
obsolete.

In Business-to-business (B2B) business, since customers are fewer and business is long-term, the
sales team needs to build long-term relationships; the company should adequately train the sales
force in the latest technologies and ensure that they are successfully communicating it to the clients.

Looks & packaging do not matter

Consumer goods depend on good packaging and branding for their success. Huge amounts may be
spent on the attractive design of cartons and logos. However, in Business-to-business (B2B),
marketing packaging has lesser importance as buying is not based on looks and design. A product is
judged primarily on its intrinsic merits and not on its attractive looks. Moreover, the decision-makers
may not see the packing at all. It may be opened and used on the production floor by technical and
production personnel.

B2B Marketing mix

Price:

Business buyers are far more focused on price and value than consumer buyers, as it directly affects
their profitability. “Trends” and “style” hold much less importance in the business buying landscape.

When selling to organisations it is pivotal that marketers have a clearly structured pricing plan that is
easy to communicate and understand so that decision makers for the business are not deterred and
can easily pass on the information to those in the C-suit of the company for approval.

Place:

Regardless of your client type, it is always essential to provide the right product, at the right place
and at the optimal time. Marketing your product in a location where you client is not present is a
waste of time and money. Focus your marketing strategy on targeting your clients in the optimal
buying environment.
Place is not necessarily just a physical location though. Your “place” can be determined by the
industry you serve. For instance a pharmaceutical company that sells direct to hospitals works within
the space of medical equipment and services, this medical industry segment is therefore a type of
non-physical space in which they must develop a presence.

Promotion:

This refers to the method of communication used to promote a product. This can vary greatly
between B2B and B2C, as individual consumers tend to seek out information differently than business
buyers. Some excellent communication channels for those in the B2B field include:

Brochures/Pamphlets:

Strategically placed in locations where you prospects have access to them, these types of materials
can house a huge amount of detailed information as well as provide a physical, tangible good for
prospects to take away with them that has your contact information.

Emails:

Email marketing is a hugely important tool for B2B Marketers. When done well this can provide an
easy, cheap avenue to communicate with clients and prospects in a way that is measurable in terms
of your conversions and return on investment.

People:

When it comes to selling a consumer good marketers don’t generally need to concern themselves
with sales people. A homogenous product, such as a can of Coca Cola, doesn’t need a sales person to
convince the buyer that it is the best can of Coke for them. Every Coca Cola is created equal so there
is no added benefit of getting a skilled salesman to persuade prospects that this particular Coca Cola
is fresher or better somehow than any other.

B2B marketers, however, need to provide evidence as to why their offering is the perfect fit. They do
not have the luxury of selling a one-size-fits-all product, this means that salespeople are essential for
building trust and motivating prospects to buy.

Physical Evidence:

The B2B marketing mix places a great deal of emphasis on actively building trust in your audience.
This is done through a variety of tangible and intangible means, for instance:

 Given the variation in offerings for B2B marketers; especially when offering a tailored
service such as consultancy, personalised web and office solutions and so on
testimonials and reviews are vital in building confidence in buyers. When consumers
buy a Coca Cola they are completing a very low-risk transaction and thus trust
building is not an essential component of the sale. Business-level transactions,
however, are often high-risk, high-involvement purchases that require trust and
confidence before closing the deal.
 Your office set-up is a huge factor in how clients and prospects perceive you. B2B
selling often involves in-person meetings to gain trust (something which is becoming
less and less prevalent in the B2C realm with the rise of ecommerce). It is therefore
 of high importance to present yourself in a manner fitting to your offering, whether
that is as a distinguished, high-end, professional or a relatable, small-business for
the everyday man, this can be a selling point for prospective clients.

Process:

With the added “people” element in the B2B marketing mix, the buying process becomes a key selling
point of your offering. Your process can demonstrate your expertise and be a key element of the
value proposition.

Given that B2B marketers often offer solutions to their clients that are not standardised, this makes
the process of delivering this solution becomes vitally important, as it differentiates you from your
competition.

Strategic tools for managing product offerings

Marketing Activities Roadmap

Where you want your tech startup to be in the near future guides your marketing activities from
month to month. Using your objectives as a guide, create a blueprint with specific steps to take in
your marketing journey. Include details about:

 Amount and types of content

 Social media outreach and engagement
 Balancing content types
 Posting schedules to various channels
 Following up with contacts
 Analyzing data

Marketing and Sales Funnel

B2B tech startups face the challenge of generating quality leads with real potential to move from
prospect to client. Companies go through a different process than consumers when making
purchasing decisions, and this often includes a lengthy period of research. To design marketing
tactics with the power to steer clients in your direction, create messages pertinent to each part of the
sales funnel. Analyze metrics to clarify purchasing behaviors, and tailor your lead generation efforts to
capture the most likely prospects. Once clients show interest in your services, be sure to follow up so
that your brand stays fresh in their minds.

Competitive Analysis

Look at what your closest local and online competitors are doing to attract customers. Their campaign
designs, keywords, advertising and pricing strategies can help you determine the best way to bring
more clients to your startup. Determine if there are unmet needs your services can fulfill, and use this
to draw B2B customers to you rather than using your competitors’ tactics to try and outdo them.

Target Customers

Who are you selling to, and why are they looking for your services? What needs must you meet for
successful lead generation? B2B clients want personalized experiences with targeted solutions just as
much as B2C customers, and the problems they’re trying to solve influence the way they search. Gain
as much insight into your audience as possible, and use your discoveries to influence the content you
deliver as part of your inbound marketing plan.

Company Branding

To establish your brand, you need more than a recognizable logo and a company “voice.” A strong
value proposition expands your mission statement to communicate the benefits clients get from
working with you. It differentiates your startup from other tech companies with a clear declaration of
how your services help your target audience.

Complete your company’s image with a positioning statement on which to base your inbound
marketing campaign. By unifying all the elements of successful marketing, this statement helps keep
your message in line with your business vision.

Mission Statement

You company’s mission statement reflects the purposes and objectives on which the business was
established. What story do you tell potential clients? Distill your vision and values into a strong
statement showing the heart of your company, the reliability of your services and why other
businesses should take advantage of what you offer.

Business Goals and Challenges

B2B marketing is an investment in growth, so it’s important for startups to establish what the
company should accomplish in the coming year and identify any obstacles standing in the way. Be
realistic as you map out your goals for the next 12 months, but don’t hesitate to dream big. Creating
a list of milestones you wish to reach prepares you to take action when you find a stumbling block in
your way. In addition to finding solutions to the challenges that are holding you back right now,
brainstorm solutions to the most likely problems that you may encounter, and you won’t flinch in the
face of inevitable challenges.

Customer Personas

Creating customer personas takes you deeper into the mind of your target audience. While it may
seem strange to profile the fictitious Robert the CEO from Widgets, Inc. and figure out why he’s in
the market for your services, the act of coming up with a realistic portrait of your ideal customer can
help you deliver more relevant marketing messages.

Create detailed and specific personas for your ideal customers. Consider who your mission statement,
value proposition and positioning statement speak to. Conduct market research to see how the
decision makers at similar companies search for solutions. Where potential clients are, the platforms
they use to research purchases and whether they primarily search from PCs or mobile devices
influences your marketing objectives.

Product Positioning

The technology landscape is filled with me-too products that have limited differentiation versus other
offerings. Without proper product positioning, your marketing messages will not resonate with
customers or partners. If you have a unique product or service, clearly identify and articulate what
makes it different from other similar offerings in the market. We like Geoffrey Moore’s (author of
“Crossing the Chasm”) format for this exercise.

Month Marketing Objectives

Do you know how many new customers you want by the end of the year? Have you decided on a
percentage of growth to strive for? How does social media engagement factor into your marketing
plan? Successful marketing requires concrete answers to these questions using numbers and
percentages rather than vague statements. Instead of deciding you want “a bigger client base” or
“more long-term contracts,” aim for growing your client base by a set percentage or establishing a
specific number of contracts in the next 12 months.

Organizational Buying and Buyer Behavior

Individual consumers are not the only buyers in a market. Companies and other organizations also need goods
and services to operate, run their businesses, and produce the offerings they provide to one another and to
consumers. These organizations, which include producers, resellers, government and nonprofit groups, buy a
huge variety of products including equipment, raw materials, finished goods, labor, and other services. Some
organizations sell exclusively to other organizations and never come into contact with consumer buyers.

B2B markets have their own patterns of behavior and decision-making dynamics that are important to
understand for two major reasons. First, when you are a member of an organization, it’s helpful to appreciate
how and why organization buying decisions are different from the decisions you make as an individual
consumer. Second, many marketing roles focus on B2B rather than B2C marketing, or they may be a
combination of the two. If you have opportunities to work in B2B marketing, you need to recognize how the
decision-making process differs in order to create effective marketing for B2B customers and target segments.

Who Are the Organizational Buyers?

Unlike the consumer buying process, multiple individuals are usually involved in making B2B buying decisions.
A purchasing agent or procurement team (also called a buying center) may also be involved to help move the
decision through the organization’s decision process and to negotiate advantageous terms of sale.

Organizations define and enforce rules for making buying decisions with purchasing policies, processes, and
systems designed to ensure the right people have oversight and final approval of these decisions. Typically,
more levels of consideration, review, and approval are required for more expensive purchases.

For anyone involved in B2B marketing or selling, it is important to know:

 Who will take part in the buying process?

 What criteria does each person use to evaluate prospective suppliers?
 What level of influence does each member of the process have?
 What interpersonal, psychological, or other factors about the decision team might influence
this buying process?
 How well do the individuals work together as a group?
 Who makes the final decision to buy?

Because every organization is unique, the answers to these questions will be different for every organization and
every sale. Marketers should understand their target segments well enough to identify commonalities where they
exist and then create effective marketing to address the common roles and decision makers identified.
For example, a technology company selling a travel- and expense-management system should expect decision
makers from several departments to be involved in the purchasing decision: the HR department (to ensure the
system is user-friendly for employees and compatible with company travel policies), the accounting department
(to ensure the system is a good complement to the company’s accounting and finance systems), and the IT
department (to ensure the system is compatible with the other systems and technologies the company uses).
Marketers should focus first on managers in the group most responsible for travel and expense policy—typically
the HR department. As the company generates serious interest and leads, marketing and sales staff should take
the time to learn about decision dynamics within each organization considering the system. Marketing and sales
support activities can focus on getting each of the essential decision makers acquainted with the product and
then convincing them to make it their final selection.

B2B Buying Situations

Who makes the buying decision depends, in part, on the situation. Common types of buying situations include
the straight rebuy, the modified rebuy, and the new task.

The straight rebuy is the simplest situation: the organization reorders a good or service without any
modifications. These transactions are usually routine and may handled entirely by the purchasing department
because the initial selection of the product and supplier already took place. With the modified rebuy, the buyer
wants to reorder a product but with some modification to the product specifications, prices, or other aspects of
the order. In this situation, a purchasing agent may be involved in negotiating the terms for the new order, and
several other participants who will use the product may participate in the buying decision.

The buying situation is a new task when an organization considers buying a product for the first time. The
number of participants and the amount of information sought tend to increase with the cost and risks associated
with the transaction. For marketers, the new task is the best opportunity for winning new business because there
is no need to displace another supplier (which would be the case for the rebuy situations).

For sales opportunities that are new tasks, there may be an opportunity for a solution sale (sometimes
called system selling). In these opportunities, the buyer may be interested in a provider that offers a complete
package or solution for the business problem, rather than individual components that address separate aspects of
the problem. Providers win these opportunities by being the company that has both the vision and the capability
to provide combination of products, technologies, and services that address the problem–and to make everything
work together smoothly. Solution sales are particularly common in the technology industry.

Characteristics of Organizational Buying

B2B purchasing decisions include levels of complexity that are unique to organizations and the environments in
which they operate.

Timing Complexity

The organizational decision process frequently spans a long period of time, which creates a significant lag
between the marketer’s initial contact with the customer and the purchasing decision. In some situations,
organizational buying can move very quickly, but it is more likely to be slow. When personnel change, go on
leave, or get reassigned to other projects, the decision process can take even longer as new players and new
priorities or requirements are introduced. Since a variety of factors can enter the picture during the longer
decision cycles of B2B transactions, the marketer’s ability to monitor and adjust to these changes is critical.

Technical Complexity

Organizational buying decisions frequently involve a range of complex technical dimensions. These could be
complex technical specifications of the physical products, or complex technical specifications associated with
services, timing, and terms of delivery and payment. Purchases need to fit into the broader supply chain an
organization uses to operate and produce its own products, and the payment schedule needs to align with the
organization’s budget and fiscal plans. For example, a purchasing agent for Volvo automobiles must consider a
number of technical factors before ordering a radio to be installed in a new vehicle model. The electronic
system, the acoustics of the interior, and the shape of the dashboard are a few of these considerations.

Organizational Complexity

Because every organization is unique, it is nearly impossible to group them into precise categories with regard
to dynamics of buying decisions. Each organization has a characteristic way of functioning, as well as a
personality and unique culture. Each organization has its own business philosophy that guides its actions in
resolving conflicts, handling uncertainty and risk, searching for solutions, and adapting to change. Marketing
and sales staff need to learn about each customer or prospect and how to work with them to effectively navigate
the product selection process.

Unique Factors Influencing B2B Buying Behavior

Because organizations are made up of individual people, many of the same influencing factors discussed earlier
in this module apply in B2B settings: situational, personal, psychological, and social factors. At the same time,
B2B purchasing decisions are influenced by a variety of factors that are unique to organizations, the people they
employ, and the broader business environment.

Individual Factors

B2B decisions are influenced by characteristics of the individuals involved in the selection process. A person’s
job position, tenure, and level in the organization may all play a role influencing a purchasing
decision. Additionally, a decision maker’s relationships with peers and managers could lead them to exert
more–or less–influence over the final selection. Individuals’ professional motives, personal style, and credibility
as a colleague, manager, or leader may play a role. To illustrate, a new department head might want to introduce
an updated technology system to help her organization work more productively. However, her short time in the
role and rivalry from other department heads could slow down a buying decision until she has proven her
leadership capability and made a strong case for investment in the new technology.

Organizational Factors

Purchasing decisions, especially big-ticket expenditures, may be influenced by the organization’s strategies,
priorities, and performance. Generally the decision makers and the providers competing for the business must
present a compelling explanation for how the new purchase will help the organization become more effective at
achieving its mission and goals. If a company goes through a quarter with poor sales performance, for example,
the management team might slow down or halt purchasing decisions until performance improves. As suggested
above, organizational structure plays a central role determining who participates in the buying process and what
that process entails. Internal organizational politics and culture may also impact who the decision makers are,
what power they exert in the decision, the pace of the buying process, and so forth. An organization’s existing
systems, products, or technology might also influence the buying process when new purchases need to be
compatible with whatever is already in place.

Business Environment

B2B purchasing is also influenced by factors in the external business environment. The health of the economy
and the company’s industry may determine whether an organization chooses to move ahead with a significant
purchase or hold off until economic indicators improve. Competitive pressures can create a strong sense of
urgency around organizational decision making and purchasing. For instance, if a leading competitor introduces
a compelling new product feature that causes your organization to lose business, managers might be anxious to
move forward with a project or purchase that can help them regain a competitive edge. When new technology
becomes available that can improve products, services, processes, or efficiency, it can create demand and sales
opportunities among companies that want the new technology in order to compete more effectively.

Government and the regulatory environment can also influence purchasing decisions. Governmental
organizations often have very strict, highly regulated purchasing processes to prevent corruption, and companies
must comply with these regulations in order to win government contracts and business. Similarly, lawmakers or
governmental agencies might create new laws and regulations that require organizations to alter how they do
business—or face penalties. In these situations, organizations tend to be highly motivated to do whatever it
takes, including purchasing new products or altering how they operate, in order to comply.

consumer and Organization Buying Behavior

Consumer Buying Behavior

Consumer buying behavior is the result of the attitudes, preferences, intentions and decisions made by the
consumer s in a market place before buying a product. The study of consumer buying behavior is an
interdisciplinary subject area drawing widely from sociology, psychology, anthropology etc.

 Standard Buying Process

The buying behaviour can be broken down into a series of tasks.

1. Problem recognition:

During this stage, the consumer becomes aware of an unfulfilled need or want. For example, his old laptop may
be broken and a need arises for a new laptop.

2. Information search:

in this stage, the consumer gathers information relevant to solving his problem. Example, collection of
information about various laptop models.

3. Evaluation:

The various alternatives are evaluated against the consumer’s wants needs, preferences, financial resources etc.

4. Purchase:

In this stage, the consumer will commit to a particular choice and make the final decision. The choice maybe
influenced by price and availability.

5. Post purchase evaluation:

In this stage, the consumer evaluates whether the purchase actually satisfied her need or not.

Types of Buying Behaviour

1. Complex: High degree of consumer involvement with significant brand differences. Eg: –
Cars.
 2. Dissonance Reducing: High degree of involvement with little brand differences. Eg: –
Carpeting
3. Habitual: Low involvement with little brand difference. Eg:- Salt
4. Variety seeking: Low involvement with significant perceived brand difference. Eg:-
Chocolates

 Organizational Buying Behavior

Organization buying behavior is defined as the rational decision-making process in which organization buys
goods and services when they have need of any goods or service for their organization. The purchased products
and services get identified, evaluated, and chosen among alternative brands and suppliers. Organizational
buying is similar to the consumer buyer behavior without any major differences. Organizations buy the products
and services for the betterment of organizational objectives such as manufacture and deliver goods and services
to members, customers or the community. Three types of buying situation have been distinguished: the straight
rebuy, the modified rebuy, and the new task.

The straight rebuy:

It is the buying condition in which the buyers buy the product frequently. Buying of those products will be a
routine task for the organization.

The modified rebuy:

A business buying condition in which the buyer wants to change the product specification, its price as well as
terms or suppliers.

The new task:

When the organization buys any products or services for the first time then it is called new task. In this cases,
the larger the cost, there will be more decision participants and also there will be more efforts for collecting
information. The new task situation creates more opportunity as well as challenges.

Participants in the business buying process:

The buying center who actually participates in buying the products and services, their roles will play a
significant role while making a decision to purchase any products for the organization.

 Users:

The members who uses the products or services. In various cases, users start off with buying proposal and also
help in defining the product specification.

 Influencer

The people who affect the buying decision in an organization are called influencers. They help to define
specifications and they also provide information for evaluating alternatives.

 Buyers

In organizational buying center, the person who actually purchases the goods and services are called buyers.
  Decider

The people who have formal or informal power in order to select or approve the final supplier in organizational
buying center are called decider.

 Gatekeepers

The person who controls the flow of information to others in organizational buying is called gatekeepers.

Major influence on Organization Buyers

Business buyers are subject to many influences when they make their buying decisions. Some marketers assume
that the major influences are economic. However, business buyers actually respond to both economic and
personal factors.

1. Environmental Factors:

Business buyers are mostly influenced by the current economy and future economy of the state or the world
while making any decision. Economic environment consists level of primary demand, the economic outlook and
the cost of money. They are also affected by technological, political and competitive developments in the
environment.

2. Organizational factors:

The major organizational factors like objectives, policies, procedures, structure and system must be understood
well.

3. Interpersonal factors:

There are many participants who influence each other so interpersonal skills also matter in the business buying
process. However, it will be difficult to implement such interpersonal factors and group dynamics.

4. Individual factors

The people who participate in business buying decision process bring in personal motives, perceptions, and
preferences. These individual factors are affected by individual characteristics such as age, income, education,
professional identification, personality and attitudes towards risk.

The Organization buying process:

There are total eight stages and by going through these stages an organization will be able to make a rational
decision. If the desired result is not achieved then the steps will be repeated again until they meet their goals and
objectives.
  Problem Recognition:

The first stage of the business buying process in which people identify the need of the organization which will
be met by purchasing any goods or services. Problem recognition can result from internal or external stimuli.
Internally , the company may take a decision to launch a new product that requires new production equipment
and materials. Or, a machine may break down and need another new part. Externally, the buyer gets some new
ideas at a trade show, see an ad, or receive a call from a seller who offers best products at low price.

 General Need Description:

After the need is recognized, the buyers prepare a general need description which reports both characteristics
and quantity needed and item for the organization. For standard items, this process presents very few problems
but for complex problems the buyer needs to work with the other engineers, users, consultants in order to define
the item.

 Product Specification:

In this stage, the buying organization decides and specifies the technical product features for the needed item.
Product value analysis is the approach that helps to reduce the cost in which the components are studied. After
studying it carefully they can be redesigned, standardized or made by fewer cost methods of production. The
team will decide best product features and specifies them accordingly.
  Supplier Search:

In this stage, the buyer conducts supplier search to find the best sellers. The buyer can assemble a list of
qualified suppliers by analyzing trade directories, doing computer searches or contacting other companies for
recommendation letters.

 Proposal Solicitation:

The stage of the business buying in which the buyer ask qualified suppliers to submit proposals is called
proposal solicitation. After this supplier will send only a catalogue or a salesperson. However, when the item is
complex or expensive, the buyer ask for the detailed written proposals or formal presentations for each potential
supplier.

 Supplier Selection:

In this stage, the buyer reviews proposals and choose a supplier or suppliers. During supplier selection, the
buying center often will prepare up a list of the desired supplier trait and their relative importance. Such trait
includes product and service quality, reputation, on-time delivery, ethical corporate behavior, honest
communication and competitive prices.

 Order- Routine Specification:

This is the stage of buying process in which the buyer choose the final supplier by listing various things like
technical specifications, quantity needed, expected time of delivery, return policies, and warranties.

 Performance Review:

The stage of buying process in which the buyer analyze the supplier’s performance on the basis of different
criteria and decides to continue, modify or drop the arrangement. The seller’s job is to observe and examine the
same factors used by the buyer to make sure that the seller is giving the expected satisfaction.

CRM Process for Marketing Organization

CRM as an essential marketing tool

In the same way that your sales and marketing teams are connected during the sales process, so should your
sales and marketing software. Clever use of customer data is the building block for smart marketing and is
typically held in CRM.

CRM software is fundamentally a sales tool, and can therefore be perceived as unfavourable by marketing
teams. Systems will often be configured to help sales teams get the most out of their deals and pipeline, and
marketing targets are forgotten. However, nothing is stopping you from claiming ownership and making the
following important processes work for you in CRM:

1. Lead management

Lead management and qualification can be a very manual and time consuming process. Capturing leads from
your web forms and entering them in CRM is not the most exciting or useful way for a marketer to spend their
time. You can find a number of quick wins by automating and streamlining your lead management processes.

 Lead capture: Your inbound web traffic can be split into two sources, web forms &
anonymous website visitors. Connect your website with your CRM, so website form leads are
 captured and entered as such in your system. To ensure none of them slip through the cracks,
set up notifications for you and your team to take action.
 Lead scoring: Not all leads that come into your business are created equal. There is no point
in wasting sales or marketing time chasing down leads who aren’t worth the effort. Your lead
scoring plan is how you qualify leads until they’re a MQL and you feel confident handing
them over to sales teams.
 Lead scoring is all about highlighting multiple valuable interactions with your business and
should be automated to let your CRM do the scoring for you. The next part to automate in
CRM will be alerting your teams when leads or prospects reach high scores. As long as
you’ve pre-defined when your leads are qualified, CRM can also do this job for you.

2. Lead nurture

In B2B businesses, the sales cycle is typically longer than their B2C counterparts. To avoid leads and prospects
going cold, keep them engaged throughout the buying cycle. One way to achieve engagement is by sending drip
emails at regular intervals with relevant content. Aim to build trust and relationships, until your leads are ready
to engage with your sales team. Don’t be afraid to re-purpose existing content. After all, this is all about time
saving. There’s no need to re-invent the wheel, your whitepapers could easily be a basis for 1 or 2 good blogs.
Use the resources you already have and build on them.

3. Customer retention and upselling

A marketer’s job doesn’t stop after a prospect is converted and a sale has been made. Customer retention should
carry as much weight as acquiring new business. Keeping your hard-won customers happy and engaged is
essential to long-term recurring sales.

Happy users of your products or services will come back for more and will also be your greatest brand advocate.
In the long run, they will be a great referral lead source and help to generate new business for you. CRM can
automate parts of your customer engagement processes. By allowing you to make the most of your customer
data, you can automate marketing workflows such as:

Automated upselling

 Customer welcome series: Customers are always at risk of falling through the cracks after
their initial purchase. Marketing automation backed by customer data from CRM ensures you
stay in touch and keep your brand/product top of mind. Automate a quick email or phone call
1 month after they become a customer.
 Cross and up-selling campaigns: Segmenting customers by activity data in CRM will allow
you to identify which additional products or services may be useful for your existing
customers. Automate email campaigns to customers who purchased one service and inform
them about the other service or product
 Customer engagement: Staying in touch with your customers and keeping them engaged
takes a lot of effort. Automate certain interactions and keep them personalised using CRM
data.
 When a contact posts on your Facebook wall or tweets your brand, you could automatically
create activities for your social media team.
 When a contact makes a purchase, follow up 30 days later by automatically creating an
activity to ask for feedback or a review. Take full advantage of using an integrated sales and
marketing software, combining CRM data and marketing automation.

4. Marketing organization and planning

Another process to automate in your CRM is the marketing workload planning. In your CRM system, make a
project, add all activities, documents, and relevant emails. Add some automated project workflow in there to
ensure no steps are being missed before your next marketing campaign goes out. For instance, a new customer
newsletter project can automatically launch design & content creation activities for team members.

Marketing spend can be logged against these activities to create a clear picture of ROI of each marketing
activity. The benefits are that management is always aware of the progress of items and every step is traceable
in CRM.

Marketing planning

Now that you’ve automated these 4 key marketing processes in CRM, you will have freed up significant time
for the marketing team. The time you can spend interpreting and refining your marketing strategy or trying out
the next big marketing idea on your list. Smaller companies or organizations who don’t yet have the marketing
tech stack to make this work can start by automating just one process in CRM which could be a quick win for
them, and build on this for the future.

4C’s (Elements) of CRM Process

 Customer Experience: people love to talk about your service and your products. It is the key
driver of consumer conversations.

The basis of positive conversations about your company is very simple: offer strong products and a decent
customer service. These two drive conversations. If you do them well: conversations will boost the business, if
your performing just a little below expectations, conversations will decrease the business. It is the foundation of
a Conversation Company.

The Conversation Company believes in a total philosophy towards customer experience. The role of social
media within this philosophy is to react in real time to people’s problems and complaints. Companies like KLM
and Best Buy  demonstrate perfectly how this pillar fits in to the overall picture. Other companies, such as Dell,
build mission control centres. These centres are manned 24/7 by staff who answer the online questions put by
customers and prospects. No single conversation is left without a response; everyone is helped.

 Conversation: the story of my previous book, The Conversation Manager. It is the goal to

converse and not communicate. Listen, ask questions, facilitate the conversations and actively
take part in them.

The Conversation Company manages online conversations in three stages: observing, facilitating and
participating. They start simply by listening to consumer conversations, adding a few relevant comments where
necessary. At the same time, the company prepares its content in such a way that it can easily be shared with
other interested parties. Clever companies combine these online conversations with their offline activities. The
Heineken Champions League stunt makes clear that the effect of small offline events can be magnified many
times by social media. Heineken facilitated this process by providing the right content in the right form. Some
time ago Kraft had the idea of integrating customer tweets into its offline advertisements. People quickly caught
on to this idea and were super-keen to get their quotes in the adverts. As a result, more than 1.5 million tweets
were sent to Kraft in the course of the campaign.

 Content: give people stuff to talk about, but do it in an authentic, positive and relevant way.

Companies should no longer be concerned with the planning of one-off advertising campaigns, but with the
global planning and management of their content. Your company must learn to think like the publisher of a
newspaper. The paper with the most interesting content is the paper that is read the most. Good content is the
ideal way to increase your reach.
  Collaboration: involve customers in everything your company does. Let them be part of your
boardroom and let them be involved in your decision-making processes.

The Conversation Company collaborates structurally with its customers. This increases the average level of
consumer commitment. It is possible to be fairly creative within this pillar. 4Food, a successful hamburger outlet
in Manhattan, draws up a new menu every day with the help of its own customers. Using a series of tablets left
on the tables, the diners can put together their own recipe for the perfect? hamburger. Every new concept put on
display for the other customers and the best-selling burgers are promoted via Twitter and Facebook. For each
burger sold, the recipe-maker receives 25 cents. In a similar vein, Proctor and Gamble has developed
Vocalpoint, a community in which 350,000 mothers help to develop new product ideas for the P&G brand.
These mothers are also the first users of the new products during the development phase, so that they can
provide feedback with regard to possible problems/weaknesses before the product is finally launched on the
market.

Phases in CRM Process

CRM process involves the activities and strategies that companies use to manage their interaction with current
and potential customers. The keyword here is “relationship.” Nurture that with existing customers and they’ll be
coming back, which means you achieve customer retention and loyalty. Harness that relationship even with
prospects and they’ll be converted into actual customers. In both cases, they translate to revenues that come into
your coffers.

A CRM is a significant tool whether you are a freelancer, sole entrepreneur, startup or global corporation. The
reasons why a CRM system matters much for a business are far too many if we list down specifics and details.
For this section, we go for the big picture. Here are some of them:

(I) Discover: by uncovering useful insights and information about your customers, you are in the position to
understand them better – who they are, how and why they buy your products. Identifying and unraveling
customer trends and interactions are crucial not only because you can readily anticipate their needs and address
their issues but also keep you ahead of competitors who may not be as attuned as you are to customers’ pulse.

(II) Organize: you have the ways and means to keep everything in order – from the whole customer life cycle
to customer channel engagement, from sales process automation to marketing campaigns, and from business
analytics to storing and accessing customer data, among others. An otherwise string of complex situations and
convoluted processes are all streamlined and automated to give you a clearer perspective and solid grasp of
things.

(III) Optimize: you can improve, build and manage customer related operations through a host of CRM tools.
These are designed to give you the flexibility and convenience you need to be responsive to your customers and
at the same time make it easy for customers to do business with you.

Strategic Alliances
The Strategic Alliance refers to the agreement between two or more firms that unite to pursue the common set
of goals but remain independent after the formation of the alliance. In other words, when two companies come
together to achieve the common objective by sharing the particular strengths (resources) with each other is
called as a strategic alliance.

The partner firms in the strategic alliance share the benefits and control over the performance of the assigned
task but are less involved and less permanent than the joint venture. Unlike joint venture where the partner firms
pool their resources to form a separate business entity, in a strategic alliance, the firms to the agreement remain
independent and come together just to capitalize on the strengths of each other.
There are four types of strategic alliances. These are:

1. Procompetitive Alliances
2. Noncompetitive Alliances
3. Competitive Alliances
4. Precompetitive Alliance

Disadvantages of Strategic Alliances

Though, the strategic alliance brings lots of advantages for the partnered firms it has certain loopholes.

 Since each firm maintains its autonomy and has a different way to perform the business
operations, there could be a difficulty in coping with each other’s style of performing the
business operations.
 There could be a mistrust among the parties when some competitive or proprietary
information is required to be shared.
 Often, the firms become so much dependent on each other that they find difficult to operate
distinctively and individually at times when they are required to perform as a separate entity.

Often, the companies enter into the strategic alliance agreement to develop a more effective process, enhance
the production capacity, develop an effective distribution channel, expand into new market segments, etc. There
are several real-time examples of strategic alliances, such as Apple has partnered with Sony, Motorola, Philips
and AT&T., Disney and Hewlett-Packard, Starbucks and Barnes and Nobles Bookstore, etc.