The Unique Nature Of Industrial Marketing

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The Unique Nature Of Industrial Marketing

The Unique Nature Of Industrial Marketing

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  • 1. Chapter 1 The Unique Nature of Industrial Marketing
  • 2. Industrial Marketing
    • Also called: Business-to-Business (B2B) and Organizational Marketing.
    • Definition: the creation and management of mutually beneficial relationships between organizational suppliers and organizational customers.
    • Customer can be private firm, public agency, or nonprofit organization.
  • 3. The Marketing Concept
    • Creating value for customers with goods and services that address organizational needs and objectives.
  • 4. Marketing Concept
    • Three major components:
      • All company activities should begin with, and be based on, the recognition of a fundamental customer need.
      • A customer orientation should be integrated throughout the functional areas of the firm: production, engineering, finance, R&D.
      • Customer satisfaction is viewed as the means to long-term profitability goals.
  • 5. Follower Interact Isolate Shaper Customer Focus Low Technology Focus High High Low Strategic Focus Grid
  • 6. Market Orientation
    • Acquire intelligence from the external environment.
    • Disseminate that intelligence throughout the organization.
    • Respond to the intelligence: take action.
      • (Kohli and Jaworski 1990, Journal of Marketing)
  • 7. Marketing Mission Statement
    • State in terms of meeting customer needs, not in terms of products or technologies.
    • Marketing Myopia (Levitt 1960 HBR)
  • 8. Marketing Activities
    • Identify customer needs
    • Research customer behavior
    • Divide market into manageable segments
    • Develop new products/services
    • Establish/negotiate prices
    • Deliver, install, service products
    • Ensure adequate and timely supply of products at correct place
    • Allocate resources across product lines
    • Communicate with customers
    • Evaluate/control marketing programs
  • 9. Marketing Mix
    • Limited number of variables under Marketing’s control to create position that is attractive to the target market segment.
    • Four Ps
      • Product
      • Price
      • Promotion
      • Place (Distribution)
  • 10. External Environment
    • Characterized by:
      • Degree of Stability
      • Complexity
      • Diversity
      • Hostility
  • 11. External Environment
    • Six Environments
      • Technological
      • Economic
      • Social/Cultural (Customer)
      • Political/Legal
      • Natural/Climatic
      • Competitive
  • 12. So what’s different about B2B?
    • Marketing Concept
    • Marketing Mix
    • Market Segmentation
    • Product Life Cycle
    • All apply in both B2C and B2B.
  • 13. So what’s different about B2B?
    • The technical characteristics of the product are important.
    • These products directly affect the operations and economic health of the customer.
    • The customer is an organization rather than an individual consumer, or family.
  • 14. Five Major Differences Between B2B and B2C
    • Products/Services being marketed
    • Nature of demand
    • How the customer buys
    • Communication process
    • Economic/Financial factors
  • 15. Products/Services
    • More complex
    • Functional vs. Symbolic Attributes
    • Large unit dollar value/Large quantities
    • Custom/Tailored
    • Various Stages from raw material to finished goods.
    • Foundation, Entering, Facilitating Goods
  • 16. Raw Material Extraction Material Processing Manufacturing Parts/Subassembly Assembly Distribution Wholesale/Retail Trade Final Consumers Facilitators Firms in Production Chain
  • 17. Nature of Demand
    • Derived
    • Joint/Shared
    • Concentrated
    • Inelastic
  • 18. How Customer Buys
    • Group Process
    • Formal
    • Lengthy
    • Loyal
    • Decisions based on risk and opportunity
  • 19. Communication
    • Personal selling more important than mass paid advertising
    • Support sales with other promotional activities: advertising in trade journals, catalogs, trade shows, direct mail, WWW.
    • Message focused on technical, factual, and descriptive content.
    • Multiple audience members.
  • 20. Economic/Financial Factors
    • Competition oligopolistic
    • Power/Dependency relationships
    • Reciprocity:Doing business with companies that do business with them.
    • Economic variables: interest rates, inflation, business cycle