What’s Next? Buying for a better world (#M4BW)

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The following is a direct quote from the forthcoming 17th edition of Essentials of Marketing and highlights examples of marketing for a better world in B2B. The boxed element in the textbook provides other examples.

While B2B buyers care about doing what’s best for their company, many organizations want to do more. Creative buyers are finding ways to help their companies and make the world a better place.

For example, South African grocery chain Woolworths (no relationship to the U.S. drugstore chain) follows its “Global Business Journey.” This strategic initiative identifies key areas where Woolworths can make sub-Saharan Africa (where it operates) a better place. For example, to achieve objectives in three of those key areas—sustainable farming, ethical sourcing, and water—Woolworths began to work closely with the farmers who grow the fruits and vegetables on its store shelves. Many of these suppliers are small businesses with limited financial resources. They regularly contend with South African droughts, so Woolworths developed its “Farming for the Future” program to train farmers on water and fertilizer management. Those who attended reduced water usage by 16 percent and cut pesticide and herbicide use in half. To give its black- and women-owned suppliers a leg up, its “Supplier and Enterprise Development Program” offers them low-cost loans. Programs like these bring Woolworths a more stable supply chain, better-quality produce, and make a better South Africa.

 

Amazon Backing Off Hospital Sales

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Amazon is a juggernaut that seems to enter one market after the next.  Most of these ventures are successful for the firm but not all work out well.  A recent example relates to Amazon’s plans to sell pharmaceuticals to hospitals as detailed in this USA Today article.  Amazon’s goal was to apply their logistics expertise and bulk savings benefits to pharmaceuticals and start supplying hospitals directly.  According to the article, this is looking harder than they originally intended for a a couple of reasons.  The biggest issue seems to be challenges disrupting the existing purchasing process.  Hospitals have existing processes and suppliers and they appear to be unwilling to change those processes.  Another possible issue could be logistical – transporting materials that need to be refrigerated.

There are several marketing concepts that could be tied to this article.  There’s a logistics management issue Amazon would have to address, there’s a direct link to personal selling and the potential advantages that is providing incumbents, a general opportunity to discuss the buying behavior of business and organizational customers, and there’s the specific issue with the existing buying centers being unwilling to change their purchasing processes – presumably even when that change could result in lower cost.  That last issue could potentially represent an ethical discussion as well.  If insurance companies pay the bill, should hospitals be worried about cost management?

What’s Now? Chapter 6 – Do B2B Sellers Understand How Purchasing Agents Shop?

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office-workerAs we know from chapter 6, organizational customers are different as compared to consumers. The chapter notes that “most purchasing managers start with an Internet search when they need to identify new suppliers, better ways to meet needs, or information to improve decisions.” Yet as noted in this article, “Stop Treating B2B Customers Like Digital Novices,” (Harvard Business Review, May 10, 2016) many companies that sell to B2B customers have yet to figure out how to take advantage of the web.

Review the text book’s discussion of Exhibit 6-4, the Model of Organizational Buying. Now think about how the ideas suggested in this article might influence an organizational buying firm.  What would the effects be on new-task buying? A straight rebuy? A modified rebuy? How might it impact the buyer-seller relationship?