Chapter 6Business Marketing

Business to Business Marketing

Marketing Aimed at bringing about an exchange in which a product or service is sold for any use other than personal consumption.

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Business Products:

Are used to manufacture other products

Become part of another product

Aid the normal operations of an organization

Are acquired for resale without change in form

Business ProductsThe key is intended use.

Business Marketing on the InternetMeasuring On-Line Success

RecencyFrequencyMonetary Value

Stickiness = Frequency X Duration X Site Reach

Disintermediation

Elimination of intermediaries from the distribution channel

Why do Businesses Form Relationships with Their Customers?More profitable May create

competitive advantage

Partnerships may create win-win situations

Strategic AlliancesLicensingDistribution

agreementsJoint VenturesConsortiaKeiretsu

Alliances form between all types of companies

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Major Categories of Business Customers

Producers

Resellers

Governments

Institutions

OEMs, Growers, Extractors

WholesalersRetailers

FederalMunicipalLocalSchools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs FoundationsNonbusiness organizations

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NAICSNAICS

NAICS

A detailed numbering system developed by the U.S., Canada, and Mexico to classify North American business establishments by their main production processes.

North American Industry

Classification System

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Provides a common industry classification system

Valuable tool for marketers in analyzing, segmenting, and targeting markets

Data can be used to determine:

– Number, size, and geographic dispersion of firms

– Market potential / market share estimates

– Sales forecasts– New customer identification

NAICS

What Makes Business Markets Different From Consumer Markets?Demand

Derived DemandInelastic DemandJoint DemandFluctuating Demand

Purchase Volume

Number of Customers

Location of Buyers

Use of Leasing

Primary Promotional Method

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Major EquipmentMajor Equipment

Accessory EquipmentAccessory Equipment

Raw MaterialsRaw Materials

Component PartsComponent Parts

Processed MaterialsProcessed Materials

SuppliesSupplies

Business ServicesBusiness Services

Types of Business Products

Online

http://www.sysco.com

BuyingCenter

InfluencersUsers

Gatekeepers Deciders

Purchasers

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Exhibit 6-2

ProductProductQualityQuality

RelatedRelatedServicesServices

PricePrice

Delivery &Delivery &InventoryInventory

BottomBottomLineLine

New BuyNew BuyA situation requiring the purchase of a product for the first time.

A situation requiring the purchase of a product for the first time.

ModifiedRebuy

ModifiedRebuy

A situation where the purchaser wants some change in the original good or service.

A situation where the purchaser wants some change in the original good or service.

StraightRebuy

StraightRebuy

A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.

A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.

Buying Situations