B2B customers expectations

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Transcript of B2B customers expectations

Page 1: B2B customers expectations
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WHAT B2B CUSTOMERS

REALLY EXPECT?

Group 4

Marketing Management Presentation

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GROUP MEMBERS

Ankit Uttam

Shobhit Deo

Sweta Chouhan

Rahul Raju

Saurabh Kumar

Special Appearence : Mukul Attri

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TRAITS OF B2B ORGANIZATION

Fewer and larger buyers.

Close supplier-customer relationship

Professional purchasing

Derived demand

Inelastic demand

Fluctuating demand

Direct purchasing

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HOW EXACTLY B2B IS DIFFERENT

FROM B2C?

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BUYING SITUATIONS

Straight Rebuy

Purchase department reorder

Suppliers are chosen from an approved list

Modified Rebuy

Change in buying requirements of the buyer

Opportunity for out-suppliers.

Sleepless nights for in-suppliers

New task

First time buyers

Longer decision time

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ASK

1. First, do you know specifically how your company helps

customers make more money?

2. Does your organization measure and track how much money

customers make doing business with your company over time?

3. Does your organization understand how it will make more

money for your customers in the future?

4. The fourth and final question is the ultimate measure of winning.

Does your organization measure and track how much more money

your customers make doing business with your company as

compared with your competitors?

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PURCHASING AGENTS

V/S

DEPARTMENT PERSONNEL

Purchasing agents Department Personnel

Influential in straight-rebuy and

modified rebuy situations.

Influential in new-buy situations.

Dominate in selecting suppliers. Dominate in selecting product

components.

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BUYING CENTER

Decision–making unit of a buying organization.

Includes all those individuals and groups who

participate in the purchasing decision making

process, who share some goals and the risks

arising from decisions.

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BUYING CENTER

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ROLES IN BUYING CENTER

Initiators: Request that something needs to be purchased.

Users: Uses the product or service.

Influencers: People who influence the buying decisions, often by

helping define specifications and providing other information.

Deciders: Decide on product requirements or on suppliers.

Approvers: Authorize the proposed action of buyer or deciders.

Buyers: Selects suppliers, arranges purchase terms,

negotiations, etc.

Gatekeepers: Have power to prevent sellers or information from

reaching members of buying center.

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TARGETING FIRMS AND BUYING

CENTERS

To be successful, the business marketers must

know

Which types of firms to focus on in their selling

efforts ;

Who to concentrate on within the buying centres

in those organizations.

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TARGETING FIRMS AND BUYING

CENTERS

Targeting firms: Finding those business sectors

with the greatest growth prospects, more profitable

customers and promising opportunities.

Targeting within the Business centres: Figure

out:

Who are the major decision participants?

What decisions do they influence?

What is their level of influence?

What evaluation criteria do they use?

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THE PURCHASE PROCESS

Business buyers always seek to obtain the highest benefit package.

The buyers incentive will be a function of the difference between the perceived benefits and costs.

Framing : Customers are given a point of view that allows the firm to put its “best foot forward”.

Framing requires understanding how customers think and choose products.

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GROWTH OF THE PURCHASE DEPT

Purchase dept. basically held a low position in

the management hierarchy.

Present situations have led companies to

upgrade the department.

Mission is to seek the best value from fewer and

better suppliers.

Multinationals have elevated them to “Strategic

supply departments”.

Eg : Caterpillar, Rio Tinto, Tata Steel.

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STAGES IN BUYING PROCESS

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PROBLEM RECOGNITION

Company recognizes a problem or need that

can be met by acquiring a good or service.

Can be either internal or external stimuli.

Internal : Decision to develop a new product or

purchased materials are unsatisfactory.

External : buyers getting ideas at trade shows ,

seeing an advertisement etc..

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GENERAL NEED RECOGNITION AND PRODUCT SPECIFICATION

Next the buyer determines the needed items

general characteristics and quantity.

Developing the items technical specifications.

Product Value Analysis to be done.

Cost reduction without adversely affecting the

product performance.

Examples : HP, Cemex (Mexican cement giant).

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SUPPLIER SEARCH

The buyer identifies the most appropriate suppliers through different means like internet.

-Catalog sites (e-procurement softwares)

-Vertical markets (e –hubs)

-“Pure Play” auction sites – Ritchie Bros.

-Spot or Exchange markets.

-Private exchanges

-Buying alliances and Barter Market.

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PROPOSAL SOLICITATION & SUPPLIER SELECTION

Buyer invites qualified suppliers to submit proposals.

After evaluation, the buyer invites a few suppliers to make formal presentations.

Before selection,the buyer will rank desired supplier attributes using a supplier evaluation model

The most important attributes are price, supplier reputation,reliability and flexibility.

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ORDER ROUTE SPECIFICATION

After selection, the buyer negotiates the final order.

The buyer lists the technical specifications,the

quantity needed ,the expected time of delivery,

warranties .etc.

In case of maintenance and repair buyers move

towards blanket contracts rather than periodic

purchase orders.

Some buyers shift the ordering responsibility to

their suppliers in systems called vendor managed

inventory.

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PERFORMANCE REVIEW

The buyer periodically reviews the performance of

the chosen supplier by:

-Contacting end users ,asking for their

evaluations.

-Weighted score Method.

-Aggregate the cost of poor performance to

come up with adjusted cost of purchase.

The review may lead the buyer to continue ,modify

or end a supplier relationship.

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B2B CUSTOMER RELATIONSHIP

MANAGEMENT

Corporate Credibility is the extent to which

customers believe a firm can design & deliver

products/services that satisfy their needs & wants.

1.• Corporate expertise

2.• Corporate trustworthiness

3.• Corporate likability

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Some other factors which determine CorporateCredibility are:- Competence

Integrity

Honesty

Benevolence

Management

Past activities

Building trust has become more tricky with theadvent of technology. (e.g. Alibaba.com)

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RISKS & OPPORTUNISM

Manufacturer’s Perspective Supplier’s Perspective

Business Buyers worry that they will

not product of right qualityWorry of Getting paid on time

Worry of Right delivery place & right

time

Cancellation of order at the last

moment

Specific investment such as transfer of

technology may be under or over

utilised.

High Inventory Holding costs if the

process/product is updated at the last

stage

Market Pressure Vendor Pressure

Supplier may demand more payment

at the time of delivery which are

incurred due to unforeseen events

Unforeseen costs may decrease profit

margin at the time of delivery

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Opportunism:-A form of cheating or undersupply relative to an

implicit or explicit contract.

Self-serving

Concealing relevant information

Blackmailing

Forming a Joint venture with customers to pressurize the Vendor.

For example, in 1996, Lear Corp ‘while knowing that they are unable to fulfil their demands’ committed to a contract with Ford Motor Comp to supply some parts.

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WHAT B2B CUSTOMERS

REALLY EXPECT?

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MISTAKE……

Most Vendors carefully research what customers

expect of their product and services “but”

FEW ask customers what they expect of their

salespeople.

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FIRST INTERVIEW……

In an interview conducted, 120 sales leaders in

vendors organization, from various industries were

asked

“What they thought customers expected of their

salespeople and determined whether they

incorporated those expectations into recruitment?”

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SECOND INTERVIEW….

After the sales leaders, their customers were asked

“What they really expected when evaluating

potential suppliers and where they saw the greatest

need for improvement?”

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KEY

FINDINGS…(EXHIBIT)

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KEY FINDINGS….

1)- Subject Matter and Solution Expertise:-

Customers put salespeople’s subject matter

and solution expertise at the top of their list of

important qualities.

Vendors rank it 3rd among qualities they believe

customers want most with subject matter and

solution expertise when recruiting new

salespeople.

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2)- Understanding customer’s business and

industry:-

Customers believe that this is the quality which

needs improvement (39% of customers expressed

dissatisfaction in this area).

Vendors also rank it on the same spot, but less

than 25% specifically evaluate customer industry

knowledge when recruiting salespeople.

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3)- Professionalism-

Vendors rank flexibility, integrity, reliability,

responsiveness, respectfulness, fairness and

understatement, 1st among the qualities they

believe customers expect of their salespeople

It is ranked much lower in vendor recruitment

criteria, because it is difficult to evaluate

during the hiring process.

Customers rank it 3rd .

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4)- Social and Communication Skills:-

On customer list sensitivity, empathy, willingness to

listen and presentation ability on last in list.

It is ranked 1st in vendor recruitment criteria,

illustrating that social skills are more important than

other qualities and need to be present from start.

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RECOMMENDATIONS……..

As per the survey, vendors would be wise

if to put industry and subject matter expertise

ahead of social skills when it comes to

recruitment.

Vendors should interview their customers to

determine which skills and expertise they expect.

Vendors should assess their salesperson’s

current performance against the desired skills.

Vendors should incorporate subject matter and

industry expertise into customer satisfaction

surveys and performance reviews.