Download - B2B customers expectations
WHAT B2B CUSTOMERS
REALLY EXPECT?
Group 4
Marketing Management Presentation
GROUP MEMBERS
Ankit Uttam
Shobhit Deo
Sweta Chouhan
Rahul Raju
Saurabh Kumar
Special Appearence : Mukul Attri
TRAITS OF B2B ORGANIZATION
Fewer and larger buyers.
Close supplier-customer relationship
Professional purchasing
Derived demand
Inelastic demand
Fluctuating demand
Direct purchasing
HOW EXACTLY B2B IS DIFFERENT
FROM B2C?
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
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?
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.
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.
BUYING CENTER
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.
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.
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?
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.
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.
STAGES IN BUYING PROCESS
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..
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).
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.
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.
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.
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.
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
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)
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
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.
WHAT B2B CUSTOMERS
REALLY EXPECT?
MISTAKE……
Most Vendors carefully research what customers
expect of their product and services “but”
FEW ask customers what they expect of their
salespeople.
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?”
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?”
KEY
FINDINGS…(EXHIBIT)
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.
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.
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 .
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.
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.