CHAPTER 05

B2B
MARKETING

© 2021 McGraw-Hill Education Limited Prepared by: Maria Vincenten, Red River College
 Learning Objectives
1. Identify the distinguishing characteristics of
industrial, reseller, government, and non-
profit markets and how they are measured
2. Describe the importance of content
marketing to business-to-business (B2B)
marketers
3. Explain which key characteristics of
organizational buying make the process
different from consumer buying

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 Learning Objectives (continued)
4. Describe how buying centres and buying
situations influence organizational purchasing
5. Outline the process of business segmentation
6. Explain the growing importance of the
approaches to online buying for industrial,
reseller, and government markets

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Supplying Applications for Success

• Business partners that make business better

are assets to organizations
• Strong B2B marketing helps potential business
partners market appropriately to their
prospective clients
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 The Nature and Size of
Organizational Markets
• Business Marketing – marketing products to
organizational buyers
– Buyers purchase and lease large volumes of
equipment, raw materials, manufactured parts,
supplies, and business services
– Organization buyers are divided into different
markets:
1) Industrial
2) Resellers
3) Government
4) Non-profit
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Measuring Industrial, Reseller,
Government, and Non-Profit Markets
• North American Industry Classification System
(NAICS) – provides common industry definitions for
Canada, Mexico, and the US which facilitate the
measurement of economic activity

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 Content Marketing
• Keeps potential customers engaged by ensuring
that relevant and valuable content is available
at various touch points
– Social media, e-newsletters, videos, and research
reports
– Provides opportunity to share feedback and
monitor discussions about products and services

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Characteristics of
Organizational Buying
Figure 5-2 Key characteristics of organizational buying behaviour

Market

Marketing Product
Characteristics or service
mix

Buying
process
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Demand

• Derived Demand –
demand for industrial
products and services is
driven by demand for
consumer products and
services
• Inelastic Demand
• Fluctuating Demand - small
changes in demand for a consumer
product can result in large changes for
B2B needs
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 Size of the Order or Purchase
• Typically, much larger than in consumer buying
• Often run into millions of dollars
• Most organizations place constraints on buyers
in the form of purchasing policies and
procedures

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Number of Potential Buyers

• Companies
selling to
organizations
are often
restricted to
fewer buyers

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Organizational Buying Objectives

“Understanding buying objectives is a necessary

first step in marketing to organizations”
• Increase profits through reducing costs or
increasing sales
• Non-profit firms and government agencies
need to meet the needs of the groups they
serve

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 Organizational Buying Criteria
• Buying Criteria - detailed specifications for the
product or services they want to buy and the
characteristics of the supplier
– price, quality, delivery schedules, technical
capability, warranties and claims policies, past
performance on previous contracts, and production
facilities and capacity
• Reverse Marketing - work with suppliers to make their
products, services, and capabilities for the buyer’s
needs

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Fear in Organizational
Buying Behaviour

• Emotions drive human behaviour

• Fear drives B2B decisions
– Organizational risk
– Personal risk

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Buyer-Seller Relationships and
Supply Partnerships
• Organizational buying is more likely to involve
complex and lengthy negotiations
– Reciprocal arrangements - organizations agree to
purchase each other’s products and services

– Supply Partnership–buyer and its supplier adopt

mutually beneficial objectives, policies, and
procedures to lower the cost or increase the
value

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 The Organizational Buying Process
and the Buying Centre
• Organizational Buying Behaviour – decision-making
process used to:
1) Establish the need
2) Identify, evaluate, and choose among alternative
brands and suppliers

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Stages in the Organizational
Buying Process
Problem recognition

Information search

Evaluation of Alternatives

Purchase Decision

Post-purchase Behaviour
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The Buying Centre:
A Cross-Functional Group
• Buying Centre – group of people who
share common goals, risk, and knowledge
important to the purchase decision
– Buying Committee - if formalized

“A major question in understanding the buying

centre is finding and reaching the people who
will initiate, influence, and actually make the
buying decision.”

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 The Buying Centre:
A Cross-Functional Group (continued)
• Marketers need to answer the following:
1) Which individuals are in the buying centre
for the product or service?
2) What is the relative influence of each
member of the group?
3) What are the buying criteria of each
member?
4) How does each member of the group
perceive the potential supplier, its products
and services, and its salespeople?
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The Buying Centre:
A Cross-Functional Group (continued)
• Roles in a Buying Centre

Users

Gatekeepers Influencers
Buying
Centre
Deciders Buyers

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 The Buying Centre:
A Cross-Functional Group (continued)
• Straight rebuy: reorders from list of acceptable
suppliers
• Modified rebuy: has experience purchasing but wants
a change
–usually mean involving buying centre
• New buy: buying the product or service for the first
time
–greater potential risk
–more complex
–buying centre is larger

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 B2B Market Segmentation
• Segmentation divides markets based on:

Type of Customer

Size of Customer

Type of Buying Situation

Customer Location

Benefits Sought

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Prominence of Online Buying in
Organizational Markets
1) Buyers depend heavily on timely
supplier information
2) Web-based technology reduces buyer
order-processing costs
3) Web-based technology reduces
marketing costs and broadens the
customer base

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E-Marketplaces:
Virtual Organizational Markets
• E-Marketplaces – online trading
communities that bring together buyers
and supplier organizations
– Independent – charge a fee for services
provided
– Private – link the network of qualified
suppliers and customers

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Online Auctions in
Organizational Markets

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