Business-to-Business transactions involve negotiations and agreements on a more wide variety of subjects and features than Business-to-Consumer transactions . A large part of the Business-to-Business market involves sale of heavy machinery and engineering services. Not only are these products and services much more expensive and capital-intensive than most ordinary consumer products in the Business-to-Customer market, they also involve a large amount of after-sales servicing, repairs and overhauls. All these have to be negotiated in a contract before the sale between the seller and customer. Business-to-Consumer market features a single-point selling contract with no scope for much negotiation .
Why it is difficult for firms to know what ethical behavior is and what is not?
While ethics in society is fairly easy to understand for individuals, ethics involving an entity or organization, involves a lot more variables which may not be as straightforward. For example, while it is indeed ethical for a firm to take care that its operations do not harm the environment adversely, it is also ethical to ensure that employees have regular income, shareholders and equity owners have a regular payout of dividends and profits, taxes are paid regularly, and customers get products that are safe to use. When these latter ethical concerns conflict with the ethical concern for the environment, how is the firm supposed to prioritize? Herein is the difficulty for the firm .
Four major types of B2B buyers.
The four major types of Business-to-Business buyers are – Producers, Resellers, Governments, and Institutions. Producers are those business buyers that use the bought products to manufacture a new product of their own. Coca Cola, and Boeing are two examples.
Resellers are those that buy a B2B product and sell it for a higher price, taking the profit as an income.. Retailers such as Walmart are the biggest examples in this field. They do not add any extra value on the product.
Governments manage the affairs of a country – such as the United States Government, Brazilian Government, etc. Governments need to buy a lot of Military equipment, such as jet fighters from a company such as General Aerodynamics.
Institutions are non-profit organizations that serve a wide variety of people, such as schools, Churches, agencies like the Red Cross and the Salvation Army. They require a budget and products such as routine grocery supplies as well.
The duties of a professional buyer
The duties of a professional buyer include –
1. To search for a product that is priced within the organization’s budget and quality expectations.
2. To make all pre-conditions of the deal clear to the seller at the beginning of negotiations.
3. To ensure that the seller will agree to offer after-sales services, maintenance, and support to the product.
4. To ensure the product bought meets the quality standards.
References
Aaker, D., & McLoughlin, D. (2010). Strategic Market Management: Global Perspectives. Hoboken, New Jersey, USA: John Wiley & Sons.
Jennings, M. (2013). Business Ethics : Case Studies and Selected Readings. Stanford, CT: Cengage.
Means, T. (2012). Business Communication. Mason: South-Western Cengage.
