BUS 360 Lecture Notes - Lecture 9: Micromarketing, Value Proposition, Market Segmentation
31 May 2018
School
Department
Course
Professor
The Business-to-Business Buying Process
Need Recognition→ Product Specification→ RFP Process→ Proposal analysis and supplier selection→ Order specification→ Vendor performance assessment using metrics
● Typically, B2B buyers specify their needs in writing and ask potential suppliers to submit formal proposals, whereas B2C buying decisions are usually made by individuals or families and do not need formal proposals
RFP Process→ (request for proposals) A process through which buying organizations invite alternative suppliers to bid on supplying their required components.
● Web portal → An Internet site whose purpose is to be a major starting point for users when they connect to the web.
● Portals can provide tremendous cost savings b/c they eliminate periodic negotiations and routine paperwork, and offer the means to form a supply chain that can respond quickly to the buyer’s needs
Vendor Performance Assessment Using Metrics
● In a B2B setting, this analysis is typically more formal and objective
-Exporting → least financial risk but also allows for only a limited return to the exporting firm
-Strategic alliances → A collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; that is, they do not invest in one another.
-Joint venture → Formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared.
-Direct Investment → When a firm maintains 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. (requires the highest level of
investment and exposes the firm to significant risks, incl the loss of its operating and/or initial investments
The Buying Center → The group of people typically responsible for the buying decisions in large organizations.
● initiator→ The buying center participant who first suggests buying the particular product or service. (your doctor)
● influencer→ The buying center participant whose views influence other members of the buying center in making the final decision. (the medical device supplier, the pharmacy)
● decider→The buying center participant who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy. (The Hospital)
● buyer→ The buying center participant who handles the paperwork of the actual purchase. (likely be the hospital’s materials manager)
● user→ The person who consumes or uses the product or service purchased by the buying center. (the patient)
● gatekeeper→ The buying center participant who controls information or access to decision makers and influencers. (The insurance company)
Organizational culture → Reflects the set of values, traditions, and customs that guide a firm's employees’ behavior. (often set of unspoken guidelines)
Organizational Buying Culture
● Autocratic buying center → A buying center in which one person makes the decision alone, though there may be multiple participants.
● Democratic buying center → A buying center in which the majority rules in making decisions.
● Consultative buying center → A buying center in which one person makes the decision but he or she solicits input from others before doing so.
● Consensus buying center → A buying center in which all members of the team must reach a collective agreement that they can support a particular purchase.
● White papers → In a B2B context, white papers are a promotional technique used by B2B sellers to provide information about a product or service in an educational context, thereby not appearing like a
promotion or propaganda.
They Buying Situation
● New buy → In a B2B setting, a purchase of a good or service for the first time; the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with
the item.
● Modified rebuy → Refers to when the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, or so
forth.
● Straight rebuy → Refers to when the buyer or buying organization simply buys additional units of products that have previously been purchased.
● New buy is the most complex and difficult b/c it requires the buying organization to make changes in its current practices and purchases
Chapter 8 - Global Marketing
Components of a Country Market Assessment
● A firm conducting an economic analysis of a country market must look at three major economic factors using well-established metrics: the general economic environment, the market size and population growth rate, and
real income.
Evaluating the General Economic Environment
● A firm should use as many metrics as it can obtain. One metric is the relative level of imports and exports. (trade deficit/surplus)
● Purchasing power parity (PPP) → A theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, expressed in the same currency.
Analyzing Infrastructure and Technological Capabilities
● Infrastructure → The basic facilities, services, and installations needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions
like schools, post offices, and prisons.
● Marketers are especially concerned with 4 key elements of a country’s infrastructure: transportation, distribution channels, communications, and commerce
Analyzing Governmental Actions
● Tariffs (duty) is a tax levied on a good imported into a country
● Quotas designate a minimum or maximum quantity of a product that may be brought into a country during a specified time period
Exchange Control → refers to the regulation of a country’s currency exchange rate
Trade agreements → Intergovernmental agreement designed to manage and promote trade activities for specific regions.
● Trade bloc→ Consists of those countries that have signed a particular trade agreement.
Hofstede’s cultural dimensions offer a foundation for most research into culture
● 1. Power Distance = willingness to accept social inequality as natural
● 2. Uncertainty Avoidance = the extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life
● 3. Individualism = perceived obligation to and dependence on groups
● 4. Masculinity = the extent to which dominant values are male oriented. A lower masculinity ranking indicates that men and women are treated equally in all aspects of society; a higher masculinity ranking suggests that
men dominate in positions of power
● 5. Time Orientation = short vs long term orientation. A country that tends to have a long term orientation values long term commitments and is willing to accept a longer time horizon for, say, the success of a new product
introduction
● 6. Indulgence = the extent to which society allows for the gratification of fun and enjoyment needs or else suppresses and regulates such pursuits
BRIC Countries → Brazil, Russia, India, China
Choosing a Global Entry Strategy
Internal assessment of a firm's capabilities comes after the assessment analysis (assessment of the firm’s access to capital, the current markets it serves, its manufacturing capacity, its proprietary assets, and the commitment of its
management to the proposed strategy)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Need recognition product specification rfp process proposal analysis and supplier selection order specification vendor performance assessment using metrics. Typically, b2b buyers specify their needs in writing and ask potential suppliers to submit formal proposals, whereas b2c buying decisions are usually made by individuals or families and do not need formal proposals. Rfp process (request for proposals) a process through which buying organizations invite alternative suppliers to bid on supplying their required components. Web portal an internet site whose purpose is to be a major starting point for users when they connect to the web. Portals can provide tremendous cost savings b/c they eliminate periodic negotiations and routine paperwork, and offer the means to form a supply chain that can respond quickly to the buyer"s needs. In a b2b setting, this analysis is typically more formal and objective. Organizational culture reflects the set of values, traditions, and customs that guide a firm"s employees" behavior. (often set of unspoken guidelines)
