McGraw-Hill/Irwin

Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
Part One

Business Markets and
Business Marketing
Part One
Business Markets and Business Marketing

• Chapter 1
•

Introduction to Business Marketing

•

The Character of B...
Chapter 1
Business Markets
and
Business Marketing
BASF EXAMPLE
A TYPICAL BUSINESS-TO-BUSINESS
COMPANY THAT:

•
•
•
•
•

Creates value for its customers
Builds brand recogni...
MARKETING SALT
Business marketing Business Marketing

Consumer Marketing
McDonalds
Salt is added to
fries

You
Salt mine

...
BUSINESS MARKETING

• THE MARKETING OF GOODS AND
SERVICES TO:

• Companies that consume
• Government Agencies
• Resellers ...
BUSINESS MARKETING IS UNIQUE
•
•
•
•
•
•
•
•

VARYING INVOLVEMENT LEVELS IN BUYERSELLER RELATIONSHIPS
SHORTER DISTRIBUTION...
MARKET DRIVEN MEANS:
•

ALL EMPLOYEES FOCUS ON CUSTOMER
SATISFACTION

•

CONSTANTLY SEEKING OPERATIONAL
EFFICIENCY

•
•

B...
TYPICAL BUSINESS TO BUSINESS
GOODS AND SERVICES INCLUDE:
•
•

RAW MATERIALS

•

COMPONENT OR OEM PARTS
(Part of a complete...
BUSINESS TO BUSINESS:
IT IS ALL ABOUT RELATIONSHIPS
BUSINESS TO BUSINESS DEPENDS ON:

•

Close Business and Personal Relat...
BUSINESS TO BUSINESS
CHALLENGES

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

• Strict performa...
BUSINESS TO BUSINESS:
IT IS ALL ABOUT DEMAND

• DERIVED DEMAND

• The demand for a company’s products comes from
•

(deriv...
BUSINESS TO BUSINESS
DERIVED DEMAND SIMPLIFIED
YOU MAKE HEADLAMP ASSEMBLIES FOR GM
Consumers
want more
cars

Consumers
sto...
THE FLOW OF GOODS AND SERVICES
Transported via facilitating services

Raw
Materials

Manufactured
materials

SubAssembly
a...
CREATING VALUE
VALUE IS THE PERCEPTION
OF A PRODUCT’S BENEFIT
BEYOND ITS PRICE
VALUE HAS THREE PARTS:
1. VALUE RECEIVED FR...
BUSINESS TO BUSINESS: THREE
CRITICAL QUESTIONS FOR A SUCCESSFUL
BUSINESS-TO-BUSINESS PROGRAM
A BUSINESS MUST DETERMINE:

1...
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Chap001

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Chap001

  1. 1. McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Part One Business Markets and Business Marketing
  3. 3. Part One Business Markets and Business Marketing • Chapter 1 • Introduction to Business Marketing • The Character of Business Marketing • The Purchasing Function • Organizational Buyer Behavior • Chapter 2 • Chapter 3 • Chapter 4
  4. 4. Chapter 1 Business Markets and Business Marketing
  5. 5. BASF EXAMPLE A TYPICAL BUSINESS-TO-BUSINESS COMPANY THAT: • • • • • Creates value for its customers Builds brand recognition Communicates a unified message Targets decisions makers Supports salespeople with variety of communication tools 1-5
  6. 6. MARKETING SALT Business marketing Business Marketing Consumer Marketing McDonalds Salt is added to fries You Salt mine Morton’s Salt Salt is mined Salt is processed into food-grade or industrial grade salt Exhibit 1-1 Kroger Salt is sold in shakers General Foods Salt is added to frozen dinners 1-6
  7. 7. BUSINESS MARKETING • THE MARKETING OF GOODS AND SERVICES TO: • Companies that consume • Government Agencies • Resellers (i.e. wholesalers) • Institutions (i.e. hospitals) • Non-Profit Organizations (i.e. American Red Cross) FOR USE IN PRODUCING THEIR PRODUCTS AND/OR TO FACILITATE OPERATIONS 1-7
  8. 8. BUSINESS MARKETING IS UNIQUE • • • • • • • • VARYING INVOLVEMENT LEVELS IN BUYERSELLER RELATIONSHIPS SHORTER DISTRIBUTION CHANNELS EMPHASIZES PERSONAL SELLING AND NEGOTIATION GREATER WEB INTEGRATION IN COMMUNICATION UNIQUE PROMOTIONAL STRATEGIES CONSUMPTION KNOWLEDGE OF CUSTOMER’S CUSTOMER MARKETING RESEARCH 1-8
  9. 9. MARKET DRIVEN MEANS: • ALL EMPLOYEES FOCUS ON CUSTOMER SATISFACTION • CONSTANTLY SEEKING OPERATIONAL EFFICIENCY • • BUILDING EFFECTIVE EMPLOYEE TERMS • • BEING INNOVATIVE CONSTANTLY IMPROVING SERVICE/SUPPORT TO CUSTOMERS DEVELOPING APPROACHES TO OPEN NEW MARKETS 1-9
  10. 10. TYPICAL BUSINESS TO BUSINESS GOODS AND SERVICES INCLUDE: • • RAW MATERIALS • COMPONENT OR OEM PARTS (Part of a completed product) • • • ACCESSORY EQUIPMENT (Tools) MANUFACTURED MATERIALS (Transformed from raw materials) CAPITAL EQUIPMENT (Machinery) MRO ITEMS (Maintenance, repair and operation products) 1-10
  11. 11. BUSINESS TO BUSINESS: IT IS ALL ABOUT RELATIONSHIPS BUSINESS TO BUSINESS DEPENDS ON: • Close Business and Personal Relationships Because of . . . . • Shorter Distribution Channels Leads to . . . . • Emphasis on Personal Selling Through . . . . • Dependence on WEB Integration and • Unique Promotional Strategies 1-11
  12. 12. BUSINESS TO BUSINESS CHALLENGES • The size and location of customers – bigger, fewer, and concentrated • Strict performance standards for products by customers • Complicated purchasing decisions – Involvement and time 1-12
  13. 13. BUSINESS TO BUSINESS: IT IS ALL ABOUT DEMAND • DERIVED DEMAND • The demand for a company’s products comes from • (derived) the demand for their customer’s products. Most demand originates with consumers. • JOINT DEMAND • Two products are used together and demanded • together Both products are consumed at the same time 1-13
  14. 14. BUSINESS TO BUSINESS DERIVED DEMAND SIMPLIFIED YOU MAKE HEADLAMP ASSEMBLIES FOR GM Consumers want more cars Consumers stop buying cars Automobile manufacturers produce more cars Automobile manufacturers stop making cars You sell more of your company’s headlamp assemblies You sell fewer headlamp assemblies 1-14
  15. 15. THE FLOW OF GOODS AND SERVICES Transported via facilitating services Raw Materials Manufactured materials SubAssembly assembly Component parts Finished car Purchase order printed facilitating product Amount and type of car determined by research facilitating service Exhibit 1-6 1-15
  16. 16. CREATING VALUE VALUE IS THE PERCEPTION OF A PRODUCT’S BENEFIT BEYOND ITS PRICE VALUE HAS THREE PARTS: 1. VALUE RECEIVED FROM THE PRODUCT 2. VALUE RECEIVED FROM SELLER’S SERVICES 3. VALUE RECEIVED FROM RELATIONSHIP WITH SELLER 1-16
  17. 17. BUSINESS TO BUSINESS: THREE CRITICAL 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 BUYING DECISIONS? 1-17
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