Int To Mktng Ch7

Copyright ©2009 by Cengage Learning Inc. All rights reserved 1

Designed by Eric Brengle B-books, Ltd.

CHAPTER

7

Business Marketing

Prepared byAmit Shah

Frostburg State University

MarketingLamb, Hair, McDaniel

10

Copyright ©2009 by Cengage Learning Inc. All rights reserved

Learning Outcomes

2

Describe business marketing

Describe the role of the Internet in business marketing

Discuss the role of relationship marketing and strategic alliances in business marketing

Identify the four major categories of business market customers

LOI

LO2

LO3

LO4


Learning Outcomes

3

Explain the North American Industry Classification System

Explain the major differences between business and consumer markets

Describe the seven types of business goods and services

Discuss the unique aspects of business buying behavior

LO5

LO6

LO7

LO8


What Is Business Marketing?

4

Describe business marketing

LOI


What Is Business Marketing?

5

BusinessMarketing

BusinessMarketing

The marketing of goods and

services to individuals and

organizations for purposes

other than personal

consumption.

LOI


Business Products

6LOI

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

The key is intended use.


REVIEW LEARNING OUTCOMEBusiness Marketing

7

LOI

cupboards

oven

folderand pen

Teddy bear

CONSUMER BUSINESScupboards

Coffee pot

oven

folderand pen

photocopier


Business Marketing on the Internet

8

Describe the role of the Internet in

business marketing

LO2


Measuring Online Success

9

LO2

StickinessStickiness

A measure of a Web site’s

effectiveness; calculated by

multiplying the frequency of

visits times the duration of a

visit times the number of pages

viewed during each visit.

Stickiness = Frequency x Duration x Site Reach


Evolution of E-Business Initiatives

10

LO2

• Revenue generation• Aggressive

disintermediation initiatives• Basic marketing

communication strategies

• Reduce costs• Build channel

partnerships and trust• Customer-focused

technology and systems• Brand building and

development• Integrate online and

traditional media

Past initiatives Present initiatives

Time


REVIEW LEARNING OUTCOMEThe Internet in Business Marketing

11

LO2

THEN

NOW Reduce costsBuild partnerships and alliancesBuild and support brandingDevelop customer-focused technology and systemsIntegrate online and traditional media

Revenue GenerationBasic Marketing Communication

Business Internet Uses

and


Relationship Marketing andStrategic Alliances

12

Discuss the role of relationship marketing and

strategic alliances inbusiness marketing

LO3


Strategic Alliances

13

LO3

StrategicAlliance

StrategicAlliance

A cooperative agreement

between business firms

(strategic partnership).


Relationships in Other Cultures

14

LO3

KeiretsuKeiretsu A network of interlocking

corporate affiliates.


REVIEW LEARNING OUTCOMERelationship Marketing and Strategic Alliances

15

LO3

Supplier(e.g. Intel)

SupplierSupplier

Company(e.g. Dell)

Company 1(e.g. Starbucks)

Company 2(e.g. Jim Beam)

Company(e.g UPS)

Customer/Distributor(e.g. Ford)


Major Categories of Business Customers

16

Identify the four majorcategories of

business market customers

LO4


Major Categories of Business Customers

17

LO4

Producers

Resellers

Governments

Institutions

OEMs

WholesalersRetailers

FederalMunicipalLocal

Schools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs FoundationsNonbusiness organizations


Producers

18

LO4

OriginalEquipment

Manufacturers

OriginalEquipment

Manufacturers

OEMsIndividuals and organizations

that buy business goods and

incorporate them into the

products that they produce for

eventual sale to other producers

or to consumers.


REVIEW LEARNING OUTCOMEBusiness Market Customers

19

LO4

Business MarketingBusiness Marketing

InstitutionsInstitutionsResellersResellers

Wholesalers

Retailers

ProducersProducers

OEMs

GovernmentsGovernments

Federal

State

Municipal

County

Unions

CivicClubs

Other

Churches

Foundations

Nonprofits


North American Industry Classification System

20

Explain the North American Industry

Classification System

LO5


NAICS

21

NAICSNAICS

LO5

A detailed numbering system

developed by the United States,

Canada, and Mexico to classify

North American business

establishments by their main

production processes.

North American Industry

Classification System


Example of NAICS Hierarchy

NAICS

Level

Sector Subsector Industry Group

U.S.

Industry

NAICS

Code

31-33 334 3346 334611

Description Manufacturing Computer

electronic

product manufacturing

Mfg. and reproduction of magnetic/optical media

Reproduction of software

22LO5


NAICS

23

LO5

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


REVIEW LEARNING OUTCOMENorth American Industry Classification System

24

LO5


Business versus Consumer Markets

25

Explain the major differences between business and

consumer markets

LO6


Business versus Consumer Markets

26

CharacteristicCharacteristicCharacteristicCharacteristic

DemandDemand

VolumeVolume

# of Customers# of Customers

LocationLocation

DistributionDistribution

Nature of BuyNature of Buy

Buy InfluenceBuy Influence

NegotiationsNegotiations

ReciprocityReciprocity

LeasingLeasing

PromotionPromotion

Business MarketBusiness MarketBusiness MarketBusiness Market

OrganizationalOrganizational

LargerLarger

FewerFewer

ConcentratedConcentrated

More DirectMore Direct

More ProfessionalMore Professional

MultipleMultiple

More ComplexMore Complex

YesYes

GreaterGreater

Personal SellingPersonal Selling

Consumer MarketConsumer MarketConsumer MarketConsumer Market

IndividualIndividual

SmallerSmaller

ManyMany

DispersedDispersed

More IndirectMore Indirect

More PersonalMore Personal

SingleSingle

SimplerSimpler

NoNo

LesserLesser

AdvertisingAdvertising

LO6


Demand in Business Markets

27LO6

Demand is...Demand is...Demand is...Demand is... DescriptionDescriptionDescriptionDescription

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

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

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

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


Fluctuating Demand

28

Multiplier EffectMultiplier Effect

(Accelerator Principle)

(Accelerator Principle)

LO6

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.


Types of Business Products

29

Describe the seven types of business goods

and services

LO7


Types of Business Products

30

LO7

Major EquipmentMajor Equipment

Accessory EquipmentAccessory Equipment

Raw MaterialsRaw Materials

Component PartsComponent Parts

Processed MaterialsProcessed Materials

SuppliesSupplies

Business ServicesBusiness Services


REVIEW LEARNING OUTCOMETypes of Business Goods and Services

31

LO7

Aluminum ore:raw material

Extruded metal:processed material

Propeller blade:component part

Extruding machine:

major equipmentTool cart:accessory equipment

Uniforms:contracted

service

Paper:supply


Business Buying Behavior

32

Discuss the unique aspects of business buying behavior

LO8


Business Buying Behavior

33LO8

Customer ServiceCustomer Service

Business EthicsBusiness Ethics

Buying SituationsBuying Situations

Evaluative CriteriaEvaluative Criteria

Buying CentersBuying Centers

Aspects of Business

BuyingBehavior

Aspects of Business

BuyingBehavior


Buying Centers

34

Buying CenterBuying Center

LO8

All those persons in an

organization who become

involved in the purchase

decision.


Roles in the Buying Center

35

LO8

InitiatorInitiator InfluencersInfluencers GatekeepersGatekeepers

DeciderDecider PurchaserPurchaser UsersUsers


Evaluative Criteria

1. Quality

2. Service

3. Price

36

LO8


Buying Situations

37

LO8

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 in which the purchaser wants some change in the original good or service.

A situation in which 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.


Customer Service

• Divide customers into groups based on their value

• Create policies that govern how service will be allocated among groups

38

LO8


REVIEW LEARNING OUTCOMEBusiness Buying Behavior

39

LO8

Customer service

InitiatorInfluencerDecider GatekeeperPurchaserUser

Buying Center

Quality Service Price

EvaluativeCriteria

Buying Situations

New buyStraight rebuyModified rebuy

Int To Mktng Ch7

Business

Transcript of Int To Mktng Ch7