BUSINESS TO BUSINESSMARKETING

Ing. Lucia Bartková, PhD.

PRICE IN B2B MARKETING

PRICE

•as equivalent, has to be paid for product

•reward to company for product or service supply

•monetary expression of product value

•instrument for value measuring and comparison

PRICE MIX COMPONENTS

•price setting process•price actualization•discounts•price strategies•payment tools•payment methods•price differentiations

PRICE AS…

•rent•school fee•charge•interest•road tool•insurance•transport charge

•royalty

•salary

•deposit

•tax

•membership fee

•commission

FACTORS OF PRICE DECISION

1.internal factors

-marketing goals

-costs

-marketing mix strategy

-organization of price setting

FACTORS OF PRICE DECISION

2.external factors

-market and demand character

-competition

-value perceived by customer

-another factors

PRICE ADAPTATION

•geographic aspect

•price discounts

•advertising pricing

•discriminatory pricing

•marketing mix pricing

- distant locality, finance shortage…

• barter

• compensation deal

• redeem (re-purchase)

• counter-claim

GEOGRAPHIC ASPECT

- cash discounts given to everybody

• cash discounts

• bulk discounts

• functional discounts

• charge deduction

PRICE DISCOUNTS

- early purchase support

• free service, guaranty extension

• payment with low interest running

• psychological price

ADVERTISING PRICING

• according to the segment

• according to the product variant

• according to the time

• according to the place

DISCRIMINATORY PRICING

• price of special supplements

• fixed products

• packages

• secondary product

• capitation

MARKETING MIX PRICING

• documentary credit• documentary collection• clear payment• bill of exchange• cheque• advance payment• leasing payment• e-commerce• bank guaranty• bank loan• supply loan• factoring, forfeiting

PAYMENT TOOLS

• bigger sensibility to price• bigger amount of money• individual price calculation• price as result of compromise• price as result of relationships • price set by competition, tender• discounts providing• many payment tools• price is not always competing tool• price according to the law• state regulations

PRICE SPECIFICS

DISTRIBUTION IN THE B2B MARKETING

- distribution = all activities allowing transfer of physical and dispositional right for product from one subject to another

- distribution channels = groups of independent organizations participate in accessing products for another usage or end consumption

- middlemen = members of distribution channel helping producers to search and obtain customers and to realize transactions

DISTRIBUTION

- economical advantages (spanning of distance, product completion)

- solution of weaknesses in organization (lack of finance, lack of staff, lack of know-how, enterprise risk elimination)

- customers’ expectations fulfilling

ARGUMENTS FOR USING DISTRIBUTION CHANNELS

• market research• marketing communication• contact obtaining• negotiations• range of goods transformation• physical distribution• risk acceptance• financing

FUNCTIONS OF DISTRIBUTION CHANNEL

producer consumer

producer wholesale consumerretail

producer consumerretail

DISTRIBUTION CHANNEL CREATION ON B2C MARKET

producer wholesale consumerretailmiddleman

• agreement with producer about expected functions of wholesaler

• information obtaining about producer by visit, conference, sales exhibition

• fulfilling obligations in payment discipline and in information providing towards producer

• searching and offering services to customers remaining customer value

TRENDS IN WHOLESALE

• new forms of retail and its combination

• shorter life-cycle of some forms of retail

• fast increase retail without selling places

• increase of competition among the same and among different types of retail

• wide-range of goods offering or specialty retailer ???

TRENDS IN RETAIL

• shopping centers considered to be suite for “purchase under one roof” =>

• services as coffee-bars, tea-houses, children corners, bookshops, cinemas, restaurants

• distributional channels are better and more professional managed

• IT as important competing tool• big retailers with strong brands expansion from

foreign countries

TRENDS IN RETAIL

DISTRIBUTION CHANNEL CREATION ON B2B MARKET

producerB2B

consumer

producer B2B consumer

B2B distributor

producerB2B

consumersales

departmentB2B

distributor

producerB2B

consumersales agent

B2B distributor

• producer = producing and delivering product• sales department = organization division of

producer• sales agent = individual company• b2b distributor = businessman with industrial

goods and raw materials with a network of b2b customers

• b2b consumer = company buying raw materials and semi-products for another production or buying product for own consumption

SUBJECT OF DISTRIBUTION CHANNEL ON B2B MARKET

• purchase frequency• product differentiation• value of purchase unit• credit of brand• purchase bulk• technical complexity of product• investments to storehouses• consumers’ arrangement• type of market (b2b, b2c)• size of market• competition• consumers with specific requests

FACTORS OF DISTRIBUTION CHANNEL SELECTION

1. traditional

2. vertical

- close

- administrative

- contractual

3. horizontal

4. multi-channel

DISTRIBUTION CHANNELS ORGANIZATION

1. traditional

- individual producer, wholesaler and retailer

- each of them try to maximize own profit

- each of them works independently and don’t have dominant control in system

DISTRIBUTION CHANNELS ORGANIZATION

2. vertical- producer, wholesaler and retailer as one

system, one is dominant (e. g. owner)• close (production and distribution in one owner

unit)• administrative (size and power of one subject in

system)• contractual

DISTRIBUTION CHANNELS ORGANIZATION

3. horizontal

- two or more organizations connection

- they don’t have enough capital, know-how or production capacities for individual business

- permanent or temporary cooperation

DISTRIBUTION CHANNELS ORGANIZATION

4. multi-channel

- combination of vertical and horizontal distribution channels

- better market covering

- lower distributional costs

- comfortable purchase for customers

- more efficient selling

DISTRIBUTION CHANNELS ORGANIZATION

• physical distribution

• orders processing

• storage

• inventories managing

• carriage (speed, availability, safety, capacity, frequency, costs)

LOGISTIC

• truck, air, railway, ship, sea

• carriage by pipeline

• combined carriage

- piggyback (railway and truck)

- fishyback (ship and truck)

- trainship (train and ship)

- airtruck (air and truck)

CARRIAGE

• railway wagons

• oil-ducts, gas-ducts, pipelines

• tanks, cisterns

• barrels

• pallets

• boxes

COVERING

• ferryboats

• containers

• electrical networks

• by air

• technical progress

• international trade

- E (removal) – EXW

- F (main carriage not paid) – FCA, FAS, FOB

- C (main carriage paid) – CFR, CIF, CPT, CIP

- D (arrival) – DAF, DES, DEQ, DDU, DDP

INCOTERMS

• more direct and shorter distributional channels• specific distributional channels• higher demand for capacity and type of

carriage• higher demand for territorial covering by

distributor• untraditional covering• direct sale require higher demands for selling

staff

SPECIFICS OF DISTRIBUTION IN B2B MARKETING

PROMOTION IN THE B2B MARKETING

1. informing about products, their attributes, benefits, quality, value, usage, utility

2. listening, receiving suggestions and request of consumers

MARKETING COMMUNICATION

• integrated and controlled system of communication tools and methods for presentation of organization and its products to consumers

• advertising, sales promotion, public relations, personal selling and direct marketing

MARKETING COMMUNICATION MIX

• any paid form of impersonal presentation and promotion of ideas, goods or services to target market

• advertising strategy:- advertising goals setting- advertising message creation- media plan- budget for advertising plan realization- advertising effectiveness measuring

ADVERTISING

• advertising goals setting

- informative advertising

- persuasive advertising

- reminding advertising

- supporting advertising

ADVERTISING STRATEGY

• advertising message creation

- according to the goals

- effort to attract consumers’ interest

- product attributes, features, usage presentation

- profit achieving or costs saving for consumer

- end b2b consumer or retailer

ADVERTISING STRATEGY

• media plan

- reach, frequency, effect, advantages, weaknesses of every medium

- newspaper, journals, TV, radio, internet, address mail, bulletins, catalogues, brochure, folders, telephone, 3D items, untraditional forms (trucks, hot-air balloons, airships, transparent hung after airplane)

ADVERTISING STRATEGY

• budget for advertising plan realization

- goal of advertising campaign

- product life-cycle stage

- market share

- competition and its communication

- advertising frequency

- substitute product influence

ADVERTISING STRATEGY

• advertising effectiveness measuring

- advertising effect on informedness, knowledge or preferences

- advertising effect in relation to expenses and achieved results or to goals fulfilling

- marketing research

ADVERTISING STRATEGY

• package of motivational tools with short-term character created for faster of bigger purchase stimulation

- sales promotion for customers

- sales promotion for trade systems

- other forms of sales promotion

SALES PROMOTION

• sales promotion for customers- samples- coupons- discounts- presents- free trying of goods- product guarantees- product exhibiting and demonstration

SALES PROMOTION

• sales promotion for trade systems

- discount

- charge deduction

- free goods

SALES PROMOTION

• other forms of sales promotion

- trade fairs and exhibitions

- selling competitions

- advertising presents

SALES PROMOTION

• communication focused on forming of attitudes towards organization

• goal is to create positive relationships of customer to organization and its products

• programs focused on organization presentation, defense of organization's image or image of products

PUBLIC RELATIONS

• main activities:- relations with press to positive inform about

organization, results, intensions- product publicity- organizational communication (internal &

external)- lobbing with government- consulting for management

PUBLIC RELATIONS

• main tools:- publications (annual reports, brochures,

articles, own newspapers and journals, books, etc.)

- events (conferences, seminars, trips, exhibitions, competitions, anniversary celebrations, etc.)

- sponsoring

PUBLIC RELATIONS

• main tools:- press (electronic, printed; news, speech,

interviews, professional articles, meetings, analysis, etc.)

- public services (e. g. environment protection)

- internal PR (meetings, company-journals, reports, notice-boards, circular letters)

PUBLIC RELATIONS

• PR goals:

- building of awareness about organization

- building of credibility of organization

- selling staff or representatives stimulation

- decrease of promotional costs

PUBLIC RELATIONS

• the most used type of marketing communication on b2b market

• “one-to-one” communication with one or more potential buyers focused on product presentation, drawing an attention, answering the questions and order acquirement

PERSONAL SELLING

• main goals:- to rouse excitement and interest on market

before start of advertisement- to built base of critical customers- to built relationships with customers- to change satisfied customer into promoters

and advocates of organization- to affect persons with some influence in favor of

organization (doctors, teachers,…)- to determine product positioning

PERSONAL SELLING

• deliveryman (of information or product)• orders receiver (order completing)• missioner (commerce establishing, trust

excitation)• technician (technical mechanism seller)• consultant• demand creator• problem solutionist

ROLES AND FUNCTIONSOF SELLER

• to search new customers and new business opportunities

• to give his time to potential and existing consumers• to communicate with consumers and to provide

information for them• to sell products• to provide services, consultations, help,…• to collect information by market research, market

analysis, selling analysis• to lay out products, to evaluate consumers, to set

delivery order, delivery conditions specification,…

TASKS OF SELLER

• personally or by telephone / internet

• with group of consumers

• as a sellers’ team with group of consumers

• organization of selling conferences (presentation)

• organization of selling seminars (presentation and education)

SELLING NEGOTIATION

PERSONAL SELLIG PROCES

7. care after selling

6. business closing

5. objections handling

4. presentation and demonstration

3. contact establishment

2. preparation for contact establishment

1. searching and appraisal

• interactive marketing system using one or more media to reach measurable response from customers or to realize a transaction from anywhere

• the core is to create database of customers• marketing of direct supply or marketing of direct

relations• long-time relationships with customers

DIRECT MARKETING

• advantages for customer:- comfort purchase in own organization - time saving, visit of many shops- comparison of each purchase advantage- obtaining information without meetings with

sellers- possibility to call for free numbers- goods delivering by mail

DIRECT MARKETING

• advantages for seller:- list of customers from any target group

obtaining- long-time relations with customers- message timing- more addressed promotional materials- usage of secret selling and communication

strategies- measuring of responses to the campaign

DIRECT MARKETING

• direct mail

- letters, hand-outs, bulletins, offering materials, CD with offers or with advertising programs, presents, samples

- lettershop – mass mail processing

• direct distribution – addressless mailing

• catalogue marketing

DIRECT MARKETING

• telemarketing (selling dialogue through telephone)

• faxmailing

• teleshopping

• direct marketing in radio, TV, newspapers

• e-commerce

• order automat

DIRECT MARKETING

THANK YOU FOR YOUR ATTENTION