Wednesday September 14, 2011

It's All About the Price

A University of Dayton study of B2B purchasers found that price and cost over time are critical factors.

A new study by the University of Dayton's Business Research Group and TriComB2B marketing agency of Vandalia, Ohio, found that while immediate price dominates business-to-business purchasing decisions, the total cost of ownership is an important consideration for many executive decision-makers.

The benchmarking study also found that decision-makers are increasingly turning to online video and digital documents for information.

"The results suggest business people will pay attention to a product difference that influences cost in the long run if they can get the information on that product difference," said Richard Stock, director of the University's Business Research Group.

According to Chris Eifert, principal of TriComB2B, while the amount of information to help guide B2B marketing has exploded during the past 10 years, little research has been done on what factors actual B2B decision-makers take into consideration.

"This collaborative report answers that question," Eifert said. "We're pleased our research partnership with the University of Dayton has definitively validated and, in some cases, shed new light on the criteria that matter most in today's business to business purchasing environment."

The Business Research Group led the development of a comprehensive survey of different aspects of the considered purchase process. TriComB2B and the Business Research Group conducted the survey online using MarketTools, gathering 448 responses from a variety of industries. All respondents were either decision-makers or influencers in the considered purchase decision process. Among the highlights:

  • "Green supply chain" is highly overrated. Only 27 percent of respondents indicated buying a product with a "green" supply chain is an important differentiator in the majority of purchases. The presence of a green supply chain was significantly less important than other factors such as safety features (57 percent) or energy efficiency (48 percent).
  • Price continues to dominate. Sixty-four percent of survey respondents indicated 60 percent or more of purchase decisions were dominated by the immediate purchase price.
  • Total cost of ownership is more important to senior executives. More than half the survey respondents (56 percent) indicated the total cost of ownership had been calculated in their considered purchase decisions at least 60 percent of the time. Older respondents (>60 years) were two to three times more likely to evaluate the total cost of ownership for considered purchases versus all other age groups.
  • Video works. Slightly more than half (51 percent) of respondents have clicked on an online video to gather information as part of the purchase decision-making process. Of those who clicked, 44 percent sought it out.
  • Digital documents trump the printed product catalog. Technical data sheets, accessed from a company's website, were rated as "Important" or "Very Important" information sources in 65 percent of the responses. Printed product catalogs were rated as "Important" or Very important" by only 22 percent of respondents.

The full research report is available at http://tricomb2b.com/about-us/Our-2011-B2B-Research.

The University of Dayton's Business Research Group focuses on program evaluation and economic analysis in the public and nonprofit sectors. The Group also has expertise in private sector market research including focus groups and online surveys. For more, visit http://businessresearchgroup.udayton.edu.

Established in 1984, TriComB2B is a BtoB Magazine Top 150 agency with extensive expertise in business-to-business marketing of technical products and services for manufacturers and providers of process equipment; electronics; climate control and refrigeration systems; electronic enclosures; data center solutions; information technology solutions; quartersawn hardwoods and millwork; engineering and construction services; air management systems; precision-manufactured components; and supply chain consulting and integration solutions. TriComB2B's staff provides a full range of marketing communications services to a worldwide client base from its headquarters in Vandalia, Ohio, and through its strategic partners in the United Kingdom and Germany. Visit www.tricomb2b.com for more.

For more information, contact: Richard Stock, Business Research Group, at richard.stock@notes.udayton.edu and 937-229-2453 or Carl Alexoff, TriComB2B, Carl.Alexoff@tricomb2b.com and 937- 890-5311.