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Contemporary Issues in Marketing Cooperative Purchasing: Old vs New

Contemporary Issues in Marketing Cooperative Purchasing: Old vs New. Zack Leung 100185479 MRKT 4177. Agenda. Concept of Cooperative Purchasing Business to Business Model B2B Model Findings B2C Model Transformation B2C Model Findings What’s in it for Business and Consumers Conclusion.

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Contemporary Issues in Marketing Cooperative Purchasing: Old vs New

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  1. Contemporary Issues in MarketingCooperative Purchasing: Old vs New Zack Leung 100185479 MRKT 4177

  2. Agenda • Concept of Cooperative Purchasing • Business to Business Model • B2B Model Findings • B2C Model Transformation • B2C Model Findings • What’s in it for Business and Consumers • Conclusion

  3. Cooperative Purchasing • “...operational, tactical, and/or strategic cooperation between two or more organization in one or more steps of purchasing process by pooling and/or sharing their volumes, information and/or resources.” –P.F. Johnson • B2B and B2C • Formally and Informally • Business Co-op • Cooperative Purchasing Companies • Friends and Families

  4. B2B Model • 3 Rules why companies purchase cooperatively 1) Servicing at Cost • Road 13 Vineyard: Bottles 2)Cooperative Advantage • Ocean Spray: Added Value 3)Knowledge Sharing • United Service Community Co-op: Consulting Biz 1 Supplier Biz 2 Co-op Company Biz 3

  5. B2B Findings • Cost Minimization • Low profits (B2B Coop Companies) • Speed • Getting confirmation • Technology • Better Deals • Suppliers offer fixed terms • Big Box Stores: Staples, Walmart, Costco

  6. Transformation • B2C • Groupon (2008) • TeamBuy.ca (2010) • Dragon’s Den (2:07) http://www.youtube.com/watch?v=A4Opn3QxJK4 Co-op Company Supplier Consumers

  7. B2C Model: Findings • Effective use of marketing features • Internet Based Websites • Viral Marketing: Social Media & Emails • Layout of Website • Interactive Comment System • Simple Sign Up and Check Out • Sense of Urgency • One deal per day • Count down timer

  8. B2C: What’s in it for... • Consumers • Price Reduction • $14 voucher worth $35 @ Contemporary Cuisine Restaurant • Chance to explore

  9. B2C: What’s in it for... • Businesses • GrouponStats: • 16 million • hip and active college or university students • 68% are ages of 18-34 • 50% Bachelor degree • 75% work full time • $100,000+ annual income • Inexpensive Marketing • Promoting • Building client base • Guaranteed returns*

  10. Guaranteed Returns

  11. Conclusion • Transformed b2c model outshone the b2b • Growing more rapidly • Effective use of marketing • Especially Viral Marketing (P2P) • Opened a New Market • Risk Free Promotion • Win-Win Situation

  12. Thank You • Questions or Comments? • Do you think business owners should worry about their current customers taking advantage of their deal if they get featured on these websites?

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