Chapter 7 Business Marketing with NOTES

© 2013 by Cengage Learning Inc. All Rights Reserved.1

Lamb, Hair, McDaniel

Chapter 7

2012-2013

Business Business MarketingMarketing

© 2013 by Cengage Learning Inc. All Rights Reserved. 2

What Is Business Marketing?What Is Business Marketing?

The marketing of goods and services to individuals and organizations for

purposes other than personal consumption.

1

the use of the Internet to facilitate the exchange of goods, services,

and information between organizations.

Business-to-Business Electronic Business-to-Business Electronic CommerceCommerce



Relationship MarketingRelationship Marketing

Loyal customers are more profitable than price-sensitive customers with little brand loyalty

Long-term relationships build competitive advantage

3


Strategic AlliancesStrategic Alliances• Licensing or distribution

agreements

• Joint ventures

• Research and development consortia

• “Strategic Partnerships”

Alliances succeed with

commitment and trust.3

Review Learning OutcomeRelationship Marketing and Strategic Alliances

12

LO3

Supplier(e.g. Intel) Supplier

Supplier

Company(e.g. Dell)

Company 1(e.g. Starbucks)

Company 2(e.g. Jim Beam)

Company(e.g UPS)

Customer/Distributor(e.g. Ford)

Copyright 2010 by Cengage Learning Inc. All Rights Reserved

14

Major Categories of Business Customers

• OEMS

LO4

Producers Resellers Governments Institutions

• Wholesalers

• Retailers

• Federal• Municipal• Local

• Schools• Churches• Civic Clubs• Hospitals• Unions• Foundations• Organizatio

ns• Colleges • Fraternal

GroupsCopyright Cengage Learning 2013

All Rights Reserved

Producers

15

Original Equipment Manufacturer’s-

OEMsIndividuals and organizations that buy business goods and

incorporate them into the products that they produce

for external sale to other producers or to consumers.


Review Learning OutcomeBusiness Market Customers

16

LO4

Business Marketing

InstitutionsResellers

Wholesalers

Retailers

Producers

OEMs

Governments

Federal

State

Municipal

County

Unions

CivicClubs

Other

Churches

Foundations

Nonprofits


North American Industry Classification System

17

Explain the North American Industry

Classification System.

LO5



North American North American Industry Classification SystemIndustry Classification System

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

by their main production processes.

(NAICS)

5

19

NAICS

• 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

LO5 Copyright Cengage Learning 2013All Rights Reserved

Business versus Consumer Markets

20

Explain the major differences

between business and consumer markets.

LO6


Business versus Consumer Markets

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CharacteristicCharacteristicDemand

Volume# of CustomersLocationDistributionNature of BuyBuy InfluenceNegotiationsReciprocityLeasingPromotion

Business MarketBusiness MarketOrganizationalLargerFewerConcentratedMore DirectMore ProfessionalMultipleMore ComplexYesGreaterPersonal Selling

Consumer MarketConsumer MarketIndividualSmallerManyDispersedMore IndirectMore PersonalSingleSimplerNoLesserAdvertising


Demand in Business Markets

Derived Demand for business products results from demand for consumer products.

Inelastic A change in price will not significantly affect the demand for product.

Joint Multiple items are used together in final product. Demand for one item affects all.

Fluctuating Demand for business products is more volatile than for consumer products.

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Fluctuating Demand

Phenomenon in which a small increase or decrease in

consumer demand can produce a much larger change in demand for

the facilities and equipment needed to make the consumer product.

Multiplier Effect (Accelerator Principle) -


Types of Business Products

24

Describe the seven types of business goods

and services.

LO7


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Types of Business Products

Major Equipment

Accessory Equipment

Raw Materials

Component Parts

Processed Materials

Supplies

Business Services


Review Learning OutcomeTypes of Business Goods and Services

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LO7

Aluminum ore:raw material

Extruded metal:processed material

Propeller blade:component part

Extruding machine:

major equipmentTool cart:accessory equipment

Uniforms:contracted

servicePaper:supply


Business Buying Behavior

27

Discuss the unique aspects of business buying behavior.

LO8


Customer Service

Business Ethics

Buying Situations

Evaluative Criteria

Buying Centers

Aspects of Business

BuyingBehavior

Business Buying Behavior


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Roles in the Buying CenterInitiator Influencers Gatekeepers

Decider Purchaser Users


Evaluative CriteriaEvaluative Criteria


Quality

Service

Price

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Buying SituationsBuying Situations


Chapter 7 Business Marketing with NOTES

Marketing

Transcript of Chapter 7 Business Marketing with NOTES