Business Markets and Business Marketing

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Part One

Business Markets and

Business Marketing


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Part One

Business Markets and Business Marketing

Chapter 1

Introduction to Business Marketing

Chapter 2

The Character of Business Marketing

Chapter 3

The purchasing Function

Chapter 4

Organizational Buyer Behavior


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Copyright 2006 The McGraw-Hill Companies, Inc. All rights reservedMcGraw-Hill/Irwin

Chapter 1

Business Markets

andBusiness Marketing


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BUSINESS MARKETING

IS MARKETING OF GOODS AND SERVICES

TO: Companies

Government Bodies Institutions (i.e. hospitals)

Non-Profit Organizations (i.e. American RedCross)

FOR USE IN PRODUCING THEIR PRODUCTS

AND/OR TO FACILITATE THEIROPERATIONS


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BUSINESS TO BUSINESS IS NOTBUSINESS TO CONSUMER

Do Not Serve Same Types of Customers

Do Not Serve the Same Number of Customers

Do Require Strong Buyer-seller Relationships

Do Depend on Strong Buyer Demand for theirCustomers Products


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TYPICAL BUSINESS TO BUSINESSGOODS AND SERVICES INCLUDE:

RAW MATERIALS

MANUFACTURING MATERIALS

(Transformed from raw materials)

COMPONENT OR OEM PARTS

(Part of a completed product)

ACCESSORY EQUIPMENT (Tools)

CAPITAL EQUIPMENT (Machinery)

MRO ITEMS (Operating supplies)


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BUSINESS TO BUSINESS:IT IS ALL ABOUT RELATIONSHIPS

BUSINESS TO BUSINESS DEPENDS ON: Close Business and Personal Relationships

Shorter Distribution Channels

Emphasis on Personal Selling

Dependence on WEB Integration

and

Unique Promotional Strategies

Because of

Leads to

Through


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BUSINESS TO BUSINESS CHALLENGES

The size and location of customers bigger,fewer, and concentrated

Strict performance standards for productsby customers

Complicated purchasing decisions Involvement and time


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BUSINESS TO BUSINESS:IT IS ALL ABOUT DEMAND

DERIVED DEMAND

The demand for a companys products comes from(derived) the demand for their customers products.

Most demand comes from consumers.

JOINT DEMAND

Two products are used together and demanded together

Both products are consumed at the same time


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BUSINESS TO BUSINESSDERIVED DEMAND SIMPLIFIED

YOU CAN MAKE HEADLAMPASSEMBLIES FOR AUTOS

Consumers

want morecars

Automobile

manufacturers

need more

components

and steel

Need more

of your

companys

headlamp

assembliesConsumersstop buying

cars

Automobile

manufacturers

stop making

cars

You cant sell

headlamp

assemblies

BUSINESS TO BUSINESS THREE


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BUSINESS TO BUSINESS: THREECRITICAL QUESTIONS FOR A SUCCESSFUL

BUSINESS TO BUSINESS PROGRAM

A BUSINESS MUST DETERMINE:

1. Who Are Its Customers?

2. What Do Its Customers Want?

3. How Do Its Buyers Make Their BuyingDecisions?


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Business marketing Business Marketing Consumer Marketing

McDonalds

Salt is added tofries

You

Salt mine Mortons Salt Kroger

Salt is sold in

shakers

Salt is mined Salt is processed into

food-grade or industrialgrade salt

General Foods

Salt is added to

frozen dinners


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IBM

ComponentsRaw materials

Assemblies

OEM Capital equipment

Accessory

equipmentFacilitating

services and

products

Maintenance,

repair, andoperations

supplies

Components Raw materials

Manufactured materials

Supply houses

Value-

added

resellers

Integrated

solutions vendors

Maintenance

repair, and

operations

supplies

Distributors

Original

equipment

products

Users

OEM parts

Manufactured

materials

Subassemblies

CUSTOMER FOCUSED TEAM STRUCTURE


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Transported via facilitating services

Raw

Materials

Manufactured

materials

Sub-

assembly

Assembly Component

parts

Finished

car

Purchase order printedfacilitating product

Amount and type of car determined by

researchfacilitating service

Documents

Business Markets and Business Marketing