 Hello! In this video we will discuss how we can go about defining a well-balanced marketing mix towards the B2B market. As a marketer, you may be working on the organizational markets. This means that you might be working with a company that has only business customers, or a company that sells to both business customers and private customers, also called consumers, or you may be dealing with a company that sells their products through other businesses, intermediaries, or resellers, as we call them. In all these cases you will have dealings with one or several business customers, also called organizational customers. In order for us as marketers to get the most out of these relationships with our business customers, create valuable product offerings, we must activate our knowledge about organizational or B2B buying behavior, and then apply this as we define the marketing mix for our B2B market. Before we move on, let us list the two learning goals for this video. Firstly, we would like to gain a brief overview of some of the characteristics of organizational buying behavior, and secondly we would like to learn how we can define the marketing mix towards the B2B market. So let us begin. Let us look at some of the highlights from organizational buying behavior. Choice criteria. Some of the main differences between what organizations and consumers based their choices on are said to be in terms of economical and technical choice criteria. Although business customers are still people and relationships and subconscious influences matter, organizational buyers are often professional buyers, so we can say that they can be more skilled in setting out specific choice criteria. Decision making unit also known as the DMU. Often there are more members of the DMU when we are dealing with organizational buyers. More people and more roles are often involved in making decisions about a purchase. The decision making process. Although no two processes are the same, one of the main differences between organizations and consumers purchasing processes is considered to be the complexity. So when you are asked to determine the marketing mix for organizational customers, all of this knowledge is incorporated into your knowledge about how to create a well-balanced marketing mix that creates value for both the customers and your company. Having gained an overview of some of the characteristics of organizational buying behavior, let us move on with an example of how we can define the marketing mix towards a B2B market. Let us imagine that we have been asked to determine the marketing mix for a company that produces markets and sells hair dye to hair salons and let us imagine that they would like to launch a new line of energy and eco-friendly products. The company's marketing objective is to increase revenue both to existing customers and by expanding their customer base. To define the product the methods we could use are for example the augmentation of the core product and the FAB. So we can apply the same tools to define the product to businesses as we could towards private consumers. But how we apply these methods and the decisions we reach as we apply them are often different. We should remember that with business customers one of the considerations is that service is often included and that often the products we offer can be of a higher complexity than those typically sold to private customers. With this new line of allergy and eco-friendly hair dye the hairdressers must learn different application procedures. Therefore we could choose to include elements of added service to our product offering as for example product training and some of the benefits we offer the hair salons are the value which a feeling of well-being and doing something good for both planet and people provides and also the opportunity for the hair salons to attract a new eco-conscious target group and thereby increase their sales. To define the price the methods we could use is firstly a cost competitor or marketing oriented pricing and we could make decisions on rapid or slow skimming or penetration strategy. As we're dealing with business customers we are aware that one of the considerations that are relevant to pricing is that pricing is often flexible in B2B relations. Pricing can be individually negotiated and individual payment terms are often agreed upon. In this case it could be appropriate to investigate the value that both the hair salons and the end consumers place on using allergy and eco-friendly hair dye so a market oriented pricing orientation could be used. We estimate the perceived value of this product to be fairly high but we also estimate the need for promotional activity to be high as we wish to both reach new customers and convince existing ones. Therefore at this point we will decide on a rapid skimming strategy. The hair salons differ in size and revenue potential and therefore we most likely wouldn't want to publish standard prices on our website but rather offer our customers individually adapted prices and volume discounts for example based on the salons potential to generate revenue. To define the distribution setup we could consider the need for intermediaries in other words the choice of indirect or direct distribution and we would decide on the distribution intensity meaning the decision of either an intensive, selective or exclusive setup. Characteristics of B2B relevant to distribution is that typically there is a need for fewer intermediaries because there are fewer customers to handle than on the B2C market. In our case each hair salon has the potential to buy more hair dye than one individual consumer would have so we can manage without intermediaries. By dealing directly with the hair salons we can build and maintain close contacts and relationships so we will keep a direct distribution setup. If we had decided on indirect distribution it would also have been relevant to look into distribution intensity. To define the promotional mix we want to consider how our campaign can benefit from the advantages of being integrated and we could consider the pros and cons of the different promotional tools and media channels in relation to our product and target group. With B2B personal sales which is a type of direct marketing is often used and the establishment and maintenance of long-term customer relationships are often strived for. Tele-sales or tele-marketing as it's also called is another type of direct marketing which is also typical for B2B. In our case since we choose direct distribution personal sales is chosen and we have decided to use our key account management team to handle this task. In addition we could use sales promotion as a tool. When we use sales promotion it is important that our choice of sales promotion contribute towards establishing and maintaining long-term customer relationships. If not this type of loyalty could become expensive and difficult to keep up in the long run. Since we know that some members of the DMU some of the hairdressers are skeptical of the quality of our products we could use sales promotion to bridge this perception gap. We could perhaps do this by offering a limited discount on first orders so that we encourage trial of the products and we should follow up on this to encourage the next step. Product demonstrations or events allowing the hairdressers to see and try the products in action before committing to buy could also be used for this purpose. Digital marketing could also support a relationship strategy and we could for example use email marketing campaigns with individualized messages to the different members of the target group. Throughout our promotional mix we want to make sure that the activities we plan are integrated and that they are connected to the rest of the marketing mix. In this video our focus is on the first four piece of the marketing mix but let us just remind ourselves that it would also be necessary to define the additional three piece process physical evidence and people and to do so we would follow the same procedure of integrating our knowledge of organizational buying behavior into our decision process on the marketing mix and ultimately we would create a more detailed activity plan of which promotional and other activities should happen when, who does what and we would draw up a budget for the launch including both costs of our planned activities, estimated revenue and of course the return on investment. So to sum up we have gained a brief overview of some of the main characteristics of organizational buying behavior and we have learned how we can determine the marketing mix for the launch of a product towards the organizational market. The main takeaway from this video is that when we are launching products on the B2B market we can use many of the same methods for determining the marketing mix as we use for the B2C market but the way we use these methods and most importantly the decisions we reach as a result are usually different. This is because we incorporate our knowledge of the different characteristics of organizational buying behavior. To learn more about the different elements of the marketing mix and other marketing subjects I recommend that you watch additional videos on my YouTube channel. To further support and substantiate your learning I recommend that you read Principles and Practice by Jobba, Marketing Management by Hollensen and if you're able to read Danish, International Real Market Sphereing by Rolf Hilanesen and others. My name is Tina Wade, thank you for watching.