Chapter 7 Business Marketing
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Transcript of Chapter 7 Business Marketing
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7Business MarketingProfessor Close
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Business MarketingOrganization market is larger than consumer market (B2B marketing/industrial marketing)Easy to define need: do not have the less rational needs of consumers (fewer customers)Organizations purchase for:ResaleUse in businessOr to produce other itemsB2B internet marketing is huge (disintermediation)
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Internet B2B Trends
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Relationship MarketingDecrease in costs: changes in traditional relationship (long-term interaction, not just 1 transaction)Cooperation (strategic alliances): Mutual goals (still difficult; why Japanese experience during troubled times)Info. Sharing:Provide data to enhance decisions (web Dell)Potential for abuse (GM sends specs to others)Keiretsu
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Relationship CommitmentAdaptations:Make changes for one customer (NUMMI; McDonalds & China potatoes)May hedge bets with multiple suppliersOperational linkages (outsourcing: train other jobs; IBM)Ties with internal processes (place people in plants)Allows better coordination (Mark @ VSU, windshields, Rubbermaid)
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McDonalds in Saudi Arabia
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Legal BondsFirestone-Ford, Maytag-Hoover, B2C, over $150, 2 round trip tickets 200,000)Formalized? But locked inHand shake allows flexibility (other risks)+
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Business CustomersProducersResellersGovernmentsInstitutions
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NAICSNorth American Industry Classification SystemUtility maximization:Personal selling: customized, large ordersPurchasing specs: precise description of what firm wantsDemand: derived, inelastic, or jointMore volumeB2B = geographically concentrated
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Buying CenterRoles auto partsUsers: work with product, often generate specs (line workers)Influencers: can modify outcome; dev. Specs, evaluate alternatives (engineers)Buyers: complete transaction, negotiate (purchasing manager)Deciders: select or approve (upper/middle management; may be same as buyer)Gatekeepers: control info. Within buying center (secretary)
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Buying Situations (1)Buying process: 3 types (goes with individual as well)Straight rebuySmall, recurring items like office suppliesLittle buyers time, little info neededReminder ads, automate processPurchasing manager and no one else
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Buying Situations (2)Modified rebuy (contract with dining hall ends)Some reviewDissatisfy: look for opportunityComparison ads: your productYour client: protect, attention to changing needsNew task buying (plant overseas)Unique situationLots of information, effort, and timeDevelop product and vendor specsMany influences
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Dell Commercial
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SummaryTypes of business products, negotiationsB2B and the internetBuying situationsMultiple influences rolesRelationship marketingNAICSBuying centerAny questions?