Slide chapter 14 : Products and Services for Businesses - International Marketing 15th Philip R. Cateora, Mary C. Gilly, and John L. Graham.

1. International Marketing
15th edition
Philip R. Cateora, Mary C. Gilly, and John L. Graham

2. 14
Introduction
• Issues of standardization versus adaptation
– Less relevance to marketing industrial goods than
consumer goods
• Factors accounting for greater market similarities
in customers of industrial goods versus consumer
goods
– The inherent nature of the product (industrial
products and services are used in the process of
creating other goods and services)
– The motive or intent for the user differs (industrial
consumers are seeking profit, whereas the ultimate
consumer is seeking satisfaction)
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3. 14Major Categories
U.S. Exports
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Exhibit 14.1

4. 14Demand in Global
Business-to-Business Markets
• Three factors affect the demand in industrial
markets differently than in consumer markets.
They are:
– Volatility of industrial demand (demand in
industrial markets is by nature more volatile)
– Stages of economic development (stages of
industrial and economic development affect
demand for industrial products)
– Technology and market demand (the level of
technology of products and services make their
sales more appropriate for some countries than
others)
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5. 14The Volatility
of Industrial Demand
• Cyclical swings in demand
– Professional buyers tend to act in concert
– Derived demand accelerates changes in markets
• Derived demand can be defined as demand dependent
on another source
• Minor changes in consumer demand mean major
changes in related industrial demand
– Boeing
• Worldwide demand for travel services related to
demand for new airplanes
• Commercial aircraft industry one of the most volatile
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6. 14Quality and
Global Standards
• Perception of quality rests solely with the
customer
– Level of technology reflected in the product
– Compliance with standards that reflect customer
needs
– Support services and follow-through
– Price relative to competitive products
• Quality standards vary with level of country’s
industrialization
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7. 14
ISO 9000 Certification –
An International Standard of Quality
(1 of 2)
• Positively affects the performance and stock
prices of firms
• Certification of the existence of a quality control
system a company has in place to ensure it can
meet published quality standards
– Describes three quality system models
– Defines quality concepts
– Gives guidelines for using international standards
in quality systems
• Generally voluntary
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8. 14
ISO 9000 Certification –
An International Standard of Quality
(2 of 2)
• EU Product Liability Directive
• Now a competitive marketing tool in Europe and
around the world
• The ACSI approach
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9. 14
Business Services
• For many industrial products the revenues from
associates services exceed the revenues from the
products
– Cellular phones
– Printers
• Leasing capital equipment
• Services not associated with products
– Boeing at-sea-satellite-launch services
– Ukrainian cargo company space rental on giant jets
– Professional services (advertising, banking,
healthcare, etc.)
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10. 14
After-Sale Services
• Installation
• Training
• Spare and replacement parts
– Delivery time
– Cost of parts
• Service personnel
• Almost always more profitable than the actual
sale of the machinery or product
• Crucial in building strong customer loyalty
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11. 14
Other Business Services
• Client followers
• Mode of entry
– Licensing
– Franchising
– Direct investment
• Protectionism
• Restrictions on cross-border data flows
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12. 14
Trade Shows: A Crucial Part of Business-
to-Business Marketing
(1 of 4)
• Secondary methods for marketing:
– Advertising in print media
– Catalogs
– Web sites
– Direct mail
• Trade shows have become the primary and most
important vehicle for doing business in many
foreign countries
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13. 14
Trade Shows: A Crucial Part of Business-
to-Business Marketing
(2 of 4)
• Total annual media budget spent on trade
events:
– Europeans – 22 percent
– Americans – 5 percent
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14. 14
Trade Shows: A Crucial Part of Business-
to-Business Marketing
(3 of 4)
• Trade shows
– Provide the facilities for a manufacturer to exhibit and
demonstrate products to potential users
– Allow manufacturers to view competitors products
– Are an opportunity to create sales and establish
relationships with agents, distributors, franchisees,
and suppliers
• Online trade shows
– Become useful in difficult economic and/or political
circumstances
– Are obviously a less than adequate substitute for live
trade shows
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15. 14
Trade Shows: A Crucial Part of Business-
to-Business Marketing
(4 of 4)
• Not a matter of selling the right product the
first time instead selling a continuously changed
the product to keep it right over time
• The objective of relationship marketing
– To make the relationship an important attribute
of the transaction
• Differentiating oneself from competitors
• Using the Internet to facilitate relationship
building and maintenance
– Cisco Systems
– Solar Turbines Inc.
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