Consist of at least 300 words

Discussion Questions

1.  How did the Coca-Cola Company try to bridge the gap between people’s real selves and their ideal selves with Coke Life?
2. Coke Life was did not sell well and was discontinued in 2017. What went wrong? Can older companies reinvent themselves with newer products like Coke Life? Name a company that succeeded by doing so and one that did not.

The following video case, titled, “Coke Life” is located at the end of chapter 3 and involves an attempt by Coca-Cola to bridge the gap between people’s real selves and their ideal selves with Coke Life.

https://www.youtube.com/watch?time_continue=2&v=aGfdubLAtY8&feature=emb_logo

Initial Post

· All posts are expected to demonstrate the use of proper grammar and be free of typographical and spelling errors.

· Describe the personal and psychological factors that may influence what consumers buy and when they buy it.

· Respond to every aspect of the discussion prompt with originality.

· Demonstrate exceptional familiarity with the text and topics being covered, and utilize text/PowerPoint references.

· Your initial post should consist of at least 300 words

 Discussion Questions

1.  How did the Coca-Cola Company try to bridge the gap between people’s real selves and their ideal selves with Coke Life?

2. Coke Life was did not sell well and was discontinued in 2017. What went wrong? Can older companies reinvent themselves with newer products like Coke Life? Name a company that succeeded by doing so and one that did not.

Principles of Marketing 4.0

Jeff Tanner and Mary Anne Raymond

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PUBLISHED BY:
FLATWORLD
©2019 BY FLATWORLD. ALL RIGHTS RESERVED. YOUR USE OF THIS WORK IS SUBJECT TO THE LICENSE AGREEMENT AVAILABLE.
NO PART OF THIS WORK MAY BE USED, MODIFIED, OR REPRODUCED IN ANY FORM BY ANY MEANS EXCEPT AS EXPRESSLY PERMITTED UNDER THE LICENSING AGREEMENT.

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CHAPTER 4
Business Buying Behavior

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LEARNING OBJECTIVES
Identify the ways in which business-to-business (B2B) markets differ from business-to-consumer (B2C) markets.
Explain why business buying is acutely affected by the behavior of consumers.

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BUSINESS CUSTOMERS

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Number Sold

The number sold to business markets and the size of each transaction is much greater than consumer markets.

The size of each transaction for business customers is also much greater.

Complexity

Business products can be far more complex.

Custom building and retrofitting is common.

Personal Selling

Because the transactions are large, personal selling is justified.

The agility of interactive personal selling allows changes to be made to meet conditions.

DEMAND FOR B2B PRODUCTS
Derived demand: Demand that is derived from a source other than the primary buyer of a product.
Fluctuating demand: A small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it.
Joint demand: Occurs when demand for one product increases the demand for another.
Companies try to influence their B2B sales by directly influencing consumers.

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KEY TAKEAWAYS
B2B markets differ from B2C markets in many ways. There are more transactions in B2B markets and more high-dollar transactions because business products are often costly and complex. There are also fewer buyers in B2B markets, but they spend much more than the typical consumer does and have more-rigid product standards.
The demand for business products is based on derived demand. Derived demand is demand that springs from, or is derived from, a secondary source other than the primary buyer of a product. For businesses, this source is consumers.
Fluctuating demand is another characteristic of B2B markets: a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it.

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LEARNING OBJECTIVES
Describe the major categories of business buyers.
Explain why finding decision makers in business markets is challenging for sellers.

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B2B BUYERS
Business buyers can be either nonprofit or for-profit businesses.
Four basic categories:
Producers
Resellers
Institutions
Governments

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PRODUCERS

These businesses have to buy certain products to produce the goods and services they create.
Producers generally buy in large quantities.

COMPANIES THAT PURCHASE GOODS AND SERVICES THAT THEY TRANSFORM INTO OTHER PRODUCTS

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RESELLERS

Large wholesalers, brokers, and retailers
are typical resellers.
Large resellers wield considerable power over producers as they provide customers and influence prices.

COMPANIES THAT SELL GOODS AND SERVICES PRODUCED BY OTHER FIRMS WITHOUT MATERIALLY CHANGING THEM

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GOVERNMENTS (B2G MARKETS)
State/local governments buy huge amounts of products.
The U.S. government is the world’s largest buyer of goods and services.
Each agency will have its own procurement policies.
Would-be sellers are asked to submit sealed bids.
It’s not always the lowest bid that’s accepted.
Selling to the government is not always easy:
Additional regulations or specifications may be required.
Decision cycles can be very long and involve large buying centers.
Some businesses avoid selling to the government because the perceived hassle is too great to warrant the effort.
Other businesses, though, realize that government purchases can become a sustainable competitive advantage.

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INSTITUTIONS

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Institutional Markets

Include nonprofit organizations

Charitable organizations,
private colleges, civic clubs

Buy Products and Services in Large Quantities

Holding costs down
is especially important

The lower the cost,
the more people they can serve

Products and Services Bought

The same as used by consumers

The quantity bought is much greater

PURCHASING DECISIONS IN BUSINESS MARKETS

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WHO MAKES THE DECISION TO BUY?

Not always clear when dealing with business customers.

FINDING THE DECISION MAKER IS KEY

Where to start in B2B sales can be a little bit like a scavenger hunt.

THERE MAY BE SEVERAL INVOLVED

There are tiers of B2B and B2C customers

KEY TAKEAWAYS
Business buyers can be either nonprofit or for-profit businesses.
There are four basic categories of business buyers:
Producers
Resellers
Governments
Institutions

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KEY TAKEAWAYS
Producers are companies that purchase goods and services that they transform into other products. They include both manufacturers and service providers.
Resellers are companies that sell goods and services produced by other firms without materially changing them. They include wholesalers, brokers, and retailers.
Local, state, and national governments purchase large quantities of goods and services.
Institutional markets include nonprofit organizations such as the American Red Cross, churches, hospitals, charitable organizations, private colleges, civic clubs, and so on. Holding costs down is especially important to them because it enables them to provide their services to more people.
Figuring out who exactly in B2B markets is responsible for what gets purchased and when often requires some detective work by marketing professionals and the salespeople they work with.

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LEARNING OBJECTIVES
Explain what a buying center is.
Explain who the members of buying centers are and describe their roles.
Describe the duties of professional buyers.
Describe the personal and interpersonal dynamics that affect the decisions buying centers make.

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PROFESSIONAL BUYERS

Buyers may have different titles:
Purchasing agents
Purchasing managers
Procurement officers
Merchandisers (retailers)
BUYING CENTERS ARE GROUPS OF PEOPLE WITHIN ORGANIZATIONS WHO MAKE PURCHASING DECISIONS

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DUTIES OF PROFESSIONAL BUYERS
Considering the availability of products, the reliability of the products’ vendors, and the technical support they can provide.
Studying a company’s sales records and inventory levels suppliers and obtaining bids from them.
Negotiating prices, delivery dates, and payment terms for products.
Keeping abreast of changes in the supply and demand for goods and services their firms need.
Staying informed of the latest trends so as to anticipate consumer buying patterns.
Determining the media (TV, the Internet, newspapers, and so forth) in which advertisements will be placed.
Tracking advertisements in newspapers and other media to check competitors’ sales activities.

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OTHER BUYING CENTER PLAYERS

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initiators

People within the organization who first see the need for the product.

users

People and groups within the organization that actually use the product. Frequently one or more users served as an initiator.

influencers

People who may or may not use the product but have experience or expertise that can help improve the buying decision.

OTHER BUYING CENTER PLAYERS

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gatekeepers

People who decide if and when you get access to members of the buying center.

deciders

People (or a person) who make(s) the final purchasing decision.

DYNAMICS OF B2B MARKETING
Interpersonal factors among the people making the buying decisions have an impact on the products chosen.
B2B marketers are aware of these dynamics and try to influence the outcome.
B2B marketing is very strategic
Selling firms gather information about their customers and use that information to their advantage.

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KEY TAKEAWAYS
Buying centers are groups of people within organizations that make purchasing decisions. The buying centers of large organizations employ professional buyers who, in a sense, shop for a living. They don’t make all the buying decisions in their companies, though.
The other people who provide input are users, or the people and groups within the organization that actually use the product; influencers, or people who may or may not use the product but have experience or expertise that can help improve the buying decision; gatekeepers, or people who will decide if and when a seller gets access to members of the buying center; and deciders, or the people who make the final purchasing decision.
Interpersonal dynamics between the people in a buying center will affect the choices the center makes. Personal factors, such as how likeable a seller is, play a part because buyers are often overwhelmed with information and will find ways to simplify their decision making.

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LEARNING OBJECTIVES
Outline the stages in the B2B buying process.
Explain the scorecard evaluation of proposals.
Describe the different types of B2B buying situations and how they affect sellers.

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STAGES IN THE B2B BUYING PROCESS

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NEED RECOGNITION

NEED DESCRIBED AND QUANITIFIED

SEARCH FOR POTENTIAL SUPPLIERS

QUALIFIED SUPPLIERS ASKED FOR RFP

PROPOSALS EVALUATED AND SUPPLIER SELECTED

ORDER ROUTINE IS ESTABLISHED

POSTPURCHASE EVALUATION IS CONDUCTED

TYPES OF B2B BUYING SITUATIONS

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Straight Rebuy

Firm buys the same product in the same quantities from the same vendor.

Modified Rebuy

Firm buys the same type of product as in the past only the order is modified or a new vendor is used.

New Buy

Firm buys a product for the first time.

KEY TAKEAWAYS
The stages in the B2B buying process are as follows:
Someone recognizes that the organization has a need that can be solved by purchasing a good or service.
The need is described and quantified.
Qualified suppliers are searched for, and each qualified supplier is sent a request for proposal (RFP), which is an invitation to submit a bid to supply the good or service.
The proposals suppliers submit are evaluated, one or more supplier(s) selected, and an order routine with each is established.
A post-purchase evaluation is later conducted and the feedback provided to the suppliers.
The buying stages an organization goes through often depend on the buying situation—whether it’s a straight rebuy, new buy, or modified rebuy.

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LEARNING OBJECTIVES
Explain e-commerce’s effect on buying firms, the companies they do business with, where they are located, and the prices they charge.
Outline the different types of e-commerce sites and what each type of site is used for.
Describe how B2B firms use social media, and explain what content marketing is.

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B2B E-COMMERCE
E-commerce has made locating near buyers less important.
B2B e-commerce has been slower to take hold than B2C e-commerce.

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B2B WEBSITES
Sell-side site: Site in which a single seller sells products to many different buyers
A buy-side site: A business buys products from multiple sellers that go there to do business with the firm.
B2B exchanges: e-commerce sites where buyers and sellers find and do business with one another.
B2B auctions: Web-based auctions that occur between businesses.
Reverse auctions: occur when buyer and seller roles are reversed.

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PRICING IN E-COMMERCE MARKETS
E-commerce empowers both consumers and businesses to shop for price.
As a result many products have reached commodity status.
Some companies refuse to sell their products directly online or list their prices on the Web site to avoid price wars.

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CONTENT MARKETING

e.g., IBM’s Big Data and Analytics Hub
Features objective case studies, information about Big Data technology information, help for software developers, etc.
Information is presented via podcasts, animations, videos, webinars, and social media

A STRATEGIC MARKETING APPROACH FOCUSED ON CREATING AND DISTRIBUTING VALUABLE, RELEVANT, AND CONSISTENT CONTENT TO ATTRACT AND RETAIN A CLEARLY-DEFINED AUDIENCE AND DRIVE PROFITABLE CUSTOMER ACTION

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B2B SOCIAL MEDIA MARKETING
Content Marketing
This works well for B2B because businesspeople online are looking for valuable information and experts who can help them succeed.
Most B2B companies utilize LinkedIn.
It was designed to facilitate communication among businesspeople.
Companies can run paid marketing campaigns that target certain groups.
YouTube is used by B2B companies to explain their products.

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KEY TAKEAWAYS
Firms in the same industry tend to cluster in the same geographic areas because the resources these firms need—both human and natural—are located in some areas and not others.
Sellers also want to be close to their buyers.
E-commerce, or commerce conducted electronically such as over the Internet, has made locating near buyers less important for business-to-business sellers and opened up opportunities for them to sell their products around the world.
However, e-commerce has also led to more competition and made it difficult for sellers to raise their prices.
B2B e-commerce was slower to take hold than B2C e-commerce.
Companies have since developed sophisticated e-commerce systems, including sell-side and buy-side websites, exchanges, and B2B auctions.

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LEARNING OBJECTIVES
Describe the reasons why firms in the same industries are often located in the same geographic areas.
Explain how the ethical dilemmas B2B marketers face differ from the ethical dilemmas B2C marketers face.
Outline the measures companies take to encourage their employees and executives to act in ethical ways.

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INTERNATIONAL B2B MARKETS
B2B markets in the same industry tend to cluster in the same geographic areas.
Clustering occurs as:
The resources that these firms need are located in some areas but not others.
Sellers want to be close to their buyers.
Clusters occur both domestically and internationally.

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ETHICS IN B2B MARKETS
Transparency International, a watchdog organization, annually ranks the likelihood of firms from the world’s industrialized countries to bribe abroad.
What is ethical and what is not is often not clear-cut.
How does a business get all of its employees on the same page in terms of how they behave?
Laws and regulations: state, federal, and international
The U.S. Federal Trade Commission (FTC) regulates companies in an effort to prevent them from engaging in unfair trade practices that can harm consumers and hamper competition.
Companies that sell to the government must, by law, follow very strict ethical guidelines.
Ethics codes.

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KEY TAKEAWAYS
Ethics come into play in almost all business settings. Business-to-business markets are no different. For example, unlike B2C markets, offering customers perks is very common in B2B settings.
In many foreign countries, government buyers demand bribes be paid if a company wants to do business with them. Understanding the laws and regulations that apply to their firms is an obvious starting point for companies, their executives, and employees in terms of knowing how to act ethically.
Companies are also adopting ethics codes that provide general guidelines about how their employees should behave, requiring their employees to go through ethics training, and hiring chief ethics officers.
Companies want to do business with firms that are responsible. They don’t want to be associated with firms that are not. Why? Because they know ethics are important to consumers and that they are increasingly demanding firms behave responsibly.

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