Strategic MarketingChapter 6 Learning Outcomes

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

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

Describe business marketing

What Is Business Marketing?LOI

BusinessMarketing

BusinessMarketing

The marketing of goods and services to individuals and organizations for purposes other than personal consumption.

Interesting fact: The US Government is the WORLD’S largest single customer

LOI What Is Business Marketing?

LOI

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.

Describe the role of the Internet in

business marketing

Business Marketing on the Internet

LO2

LO2

StickinessStickiness

A measure of a Web site’seffectiveness; calculated by multiplying the frequency of visits times the duration of a visit times the number of pages viewed during each visit.

Measuring Online Success

Stickiness = Frequency x Duration x Site Reach

REVIEW LEARNING OUTCOMEThe Internet in Business Marketing

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

Discuss the role of relationship marketing and

strategic alliances inbusiness marketing

Relationship Marketing andStrategic AlliancesLO3

LO3

StrategicAlliance

StrategicAlliance

Strategic Alliances

A cooperative agreement between business firms (strategic partnership).

Identify the four majorcategories of

business market customers

Major Categories of Business CustomersLO4

LO4Major Categories of Business Customers

Producers

Resellers

Governments

Institutions

OEMs

WholesalersRetailers

FederalMunicipalLocal

Schools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs FoundationsNonbusiness organizations

LO4

OriginalEquipment

Manufacturers

OriginalEquipment

Manufacturers

Producers

OEMs.Individuals 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

LO4

Business MarketingBusiness Marketing

InstitutionsInstitutionsResellersResellers

Wholesalers

Retailers

ProducersProducers

OEMs

GovernmentsGovernments

Federal

State

Municipal

County

Unions

CivicClubs

Other

Churches

Foundations

Nonprofits

Explain the North American Industry

Classification System

North American Industry Classification SystemLO5

NAICSNAICS

LO5 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

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

NAICS

Explain the major differences between business and

consumer markets

Business versus Consumer Markets

LO6

CharacteristicCharacteristic

DemandDemand

VolumeVolume

# of Customers# of Customers

LocationLocation

DistributionDistribution

Nature of BuyNature of Buy

Buy InfluenceBuy Influence

NegotiationsNegotiations

ReciprocityReciprocity

LeasingLeasing

PromotionPromotion

Business MarketBusiness Market

OrganizationalOrganizational

LargerLarger

FewerFewer

ConcentratedConcentrated

More DirectMore Direct

More ProfessionalMore Professional

MultipleMultiple

More ComplexMore Complex

YesYes

GreaterGreater

Personal SellingPersonal Selling

Consumer MarketConsumer Market

IndividualIndividual

SmallerSmaller

ManyMany

DispersedDispersed

More IndirectMore Indirect

More PersonalMore Personal

SingleSingle

SimplerSimpler

NoNo

LesserLesser

AdvertisingAdvertising

LO6 Business versus Consumer Markets

LO6

Demand is...Demand is... DescriptionDescription

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.

Demand in Business Markets

Describe the seven types of business goods

and services

Types of Business ProductsLO7

22

LO7

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

Discuss the unique aspects of business buying behavior

Business Buying BehaviorLO8

LO8

Customer ServiceCustomer Service

Business EthicsBusiness Ethics

Buying SituationsBuying Situations

Evaluative CriteriaEvaluative Criteria

Buying CentersBuying Centers

Aspects of Business

BuyingBehavior

Aspects of Business

BuyingBehavior

Business Buying Behavior

Buying CenterBuying Center

LO8 Buying Centers

All those persons in an organization who become involved in the purchase decision.

LO8

InitiatorInitiator InfluencersInfluencers GatekeepersGatekeepers

DeciderDecider PurchaserPurchaser UsersUsers

Roles in the Buying Center

Online

http://www.loctite.com

LO8 Evaluative Criteria

1. Quality

2. Service

3. Price

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 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

Business Ethics

• Ethical behavior refers to moral principles or values that govern the conduct of companies.

• Companies publish a code of ethics which help guide buyers and sellers.

REVIEW LEARNING OUTCOMEBusiness Buying Behavior

LO8

Customer service

InitiatorInfluencerDecider GatekeeperPurchaserUser

Buying Center

Quality Service Price

EvaluativeCriteria

Buying Situations

New buyStraight rebuyModified rebuy