CHAPTER 05

B2B
MARKETIN
G

© 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

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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

• firms selling to
organizations
are often
restricted to far
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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