Business Marketing
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Business Marketing
Chapter 5
Prepared by Deborah Baker Texas Christian University Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
1
Learning Objectives 1. Describe business marketing. 2. Describe the role of the Internet in business marketing. 3. Discuss the role of relationship marketing and strategic alliances in business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
2
Learning Objectives (continued) 4. Identify the four major categories of business market customers. 5. Explain the North American Industry Classification System. 6. Explain the major differences between business and consumer markets.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
3
Learning Objectives (continued) 7. Describe the seven types of business goods and services. 8. Discuss the unique aspects of business buying behavior.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
4
1
Learning Objective
On OnLine Line http://www.gm.com http://www.gm.com
Describe business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
5
1
Business Marketing
The marketing of goods and services to individuals and organizations for purposes other than personal consumption.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
6
1
Business Products Are used to manufacture other products Become part of another product Aid the normal operations of an organization
Key is intended use
Are acquired for resale without change in form
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
7
2
Learning Objective
Describe the role of the Internet in business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
8
2
Internet Marketing Opportunities
On OnLine Line http://www.gepolymerland.com http://www.gepolymerland.com
Increase efficiency
Reduce costs
Improve customer service
Create one-to-one relationships
Introduce new products
Expand markets
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
9
2
Benefits of Marketing on the Internet
On OnLine Line http://www.covisint.com http://www.covisint.com
1. 1. Lower Lower prices prices 2. 2. Greater Greater selection selection of of products products and and vendors vendors 3. 3. Access Access to to customer customer and and product product sales sales data data 4. 4. Around-the-clock Around-the-clock ordering ordering & & customer customer service service 5. 5. Lower Lower costs costs 6. 6. Customized Customized products products
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
10
3
Learning Objective
Discuss the role of relationship marketing and strategic alliances in business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
11
3
Strategic Alliance
A cooperative agreement between business firms (strategic partnership).
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
12
3
Keiretsu
A network of interlocking corporate affiliates.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
13
4
Learning Objective
Identify the four major categories of business market customers.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
14
4
Categories of Business Customers
On OnLine Line http://www.cbd-net.com http://www.cbd-net.com http://www.governmentbids.com http://www.governmentbids.com
Producers
Categories of Business Customers
Resellers
Governments
Institutions Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
15
5
Learning Objective
Explain the North American Industry Classification System.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
16
5
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 Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
17
5
Examples of NAICS
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
18
5
NAICS Provides 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
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
19
6
Learning Objective
Explain the major differences between business and consumer markets.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
20
6
Business vs. Consumer Markets Characteristic Characteristic Demand Demand Volume Volume ## of of Customers Customers Location Location Distribution Distribution Nature Nature of of Buy Buy Buy Buy Influence Influence Negotiations Negotiations Reciprocity Reciprocity Leasing Leasing Promotion Promotion
Business Business Market Market Organizational Organizational Larger Larger Fewer Fewer Concentrated Concentrated More More Direct Direct More More Professional Professional Multiple Multiple More More Complex Complex Yes Yes Greater Greater Personal Personal Selling Selling
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Consumer Consumer Market Market Individual Individual Smaller Smaller Many Many Dispersed Dispersed More More Indirect Indirect More More Personal Personal Single Single Simpler Simpler No No Lesser Lesser Advertising Advertising 21
6
Demand in Business Markets Demand Demand is... is...
Description Description
Derived Derived
Demand Demand for for business business products products results results from from demand demand for for consumer consumer products products
Inelastic Inelastic
A A change change in in price price will will not not significantly significantly affect affect the the demand demand for for product product
Joint Joint
Multiple Multiple items items are are used used together together in in final final product. product. Demand Demand for for one one item item affects affects all all
Demand Demand for for business business products products is is more more Fluctuating Fluctuating volatile volatile than than for for consumer consumer products products Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
22
Multiplier Effect (Accelerator Principle)
6
Phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product. Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
23
7
Learning Objective
Describe the seven types of business goods and services.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
24
7
Types of Business Products
On OnLine Line http://www.pmpa.org http://www.pmpa.org
Major Major Equipment Equipment Accessory Accessory Equipment Equipment Raw Raw Materials Materials Component Component Parts Parts
Major Major Categories Categories of of Business Business Products Products
Processed Processed Materials Materials
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Supplies Supplies Business Business Services Services 25
8
Learning Objective
Discuss the unique aspects of business buying behavior.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
26
8
Business Buying Behavior Buying Buying Centers Centers Evaluation Evaluation Criteria Criteria Aspects Aspects of of Business Business Buying Buying Behavior Behavior
Buying Buying Situations Situations Purchasing Purchasing Ethics Ethics Customer Customer Service Service
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
27
8
Buying Center
On OnLine Line http://www.loctite.com http://www.loctite.com http://www.napm.org http://www.napm.org
All those persons in an organization who become involved in the purchase decision.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
28
8
Roles in the Buying Center
Initiator Initiator
Influencers Influencers
Gatekeepers Gatekeepers
Decider Decider
Purchaser Purchaser
Users Users
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
29
8
Roles in the Buying Center
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
30
Evaluative Criteria for Business Buyers
8
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
31
8
Buying Situations
New New Buy Buy
Modified Modified Rebuy Rebuy
Straight Straight Rebuy Rebuy
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
32
8
Buying Situations
New New Buy Buy
A A situation situation requiring requiring the the purchase purchase of of aa product product for for the the first first time. time.
Modified Modified Rebuy Rebuy
A A situation situation where where the the purchaser purchaser wants wants some some change change in in the the original original good good or or service. service.
Straight Straight Rebuy Rebuy
A A situation situation in in which which the the purchaser purchaser reorders reorders the the same same goods goods or or services services without without looking looking for for new new information information or or investigating investigating other other suppliers. suppliers.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
33
Chapter 5
Prepared by Deborah Baker Texas Christian University Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
1
Learning Objectives 1. Describe business marketing. 2. Describe the role of the Internet in business marketing. 3. Discuss the role of relationship marketing and strategic alliances in business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
2
Learning Objectives (continued) 4. Identify the four major categories of business market customers. 5. Explain the North American Industry Classification System. 6. Explain the major differences between business and consumer markets.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
3
Learning Objectives (continued) 7. Describe the seven types of business goods and services. 8. Discuss the unique aspects of business buying behavior.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
4
1
Learning Objective
On OnLine Line http://www.gm.com http://www.gm.com
Describe business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
5
1
Business Marketing
The marketing of goods and services to individuals and organizations for purposes other than personal consumption.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
6
1
Business Products Are used to manufacture other products Become part of another product Aid the normal operations of an organization
Key is intended use
Are acquired for resale without change in form
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
7
2
Learning Objective
Describe the role of the Internet in business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
8
2
Internet Marketing Opportunities
On OnLine Line http://www.gepolymerland.com http://www.gepolymerland.com
Increase efficiency
Reduce costs
Improve customer service
Create one-to-one relationships
Introduce new products
Expand markets
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
9
2
Benefits of Marketing on the Internet
On OnLine Line http://www.covisint.com http://www.covisint.com
1. 1. Lower Lower prices prices 2. 2. Greater Greater selection selection of of products products and and vendors vendors 3. 3. Access Access to to customer customer and and product product sales sales data data 4. 4. Around-the-clock Around-the-clock ordering ordering & & customer customer service service 5. 5. Lower Lower costs costs 6. 6. Customized Customized products products
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
10
3
Learning Objective
Discuss the role of relationship marketing and strategic alliances in business marketing.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
11
3
Strategic Alliance
A cooperative agreement between business firms (strategic partnership).
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
12
3
Keiretsu
A network of interlocking corporate affiliates.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
13
4
Learning Objective
Identify the four major categories of business market customers.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
14
4
Categories of Business Customers
On OnLine Line http://www.cbd-net.com http://www.cbd-net.com http://www.governmentbids.com http://www.governmentbids.com
Producers
Categories of Business Customers
Resellers
Governments
Institutions Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
15
5
Learning Objective
Explain the North American Industry Classification System.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
16
5
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 Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
17
5
Examples of NAICS
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
18
5
NAICS Provides 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
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
19
6
Learning Objective
Explain the major differences between business and consumer markets.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
20
6
Business vs. Consumer Markets Characteristic Characteristic Demand Demand Volume Volume ## of of Customers Customers Location Location Distribution Distribution Nature Nature of of Buy Buy Buy Buy Influence Influence Negotiations Negotiations Reciprocity Reciprocity Leasing Leasing Promotion Promotion
Business Business Market Market Organizational Organizational Larger Larger Fewer Fewer Concentrated Concentrated More More Direct Direct More More Professional Professional Multiple Multiple More More Complex Complex Yes Yes Greater Greater Personal Personal Selling Selling
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Consumer Consumer Market Market Individual Individual Smaller Smaller Many Many Dispersed Dispersed More More Indirect Indirect More More Personal Personal Single Single Simpler Simpler No No Lesser Lesser Advertising Advertising 21
6
Demand in Business Markets Demand Demand is... is...
Description Description
Derived Derived
Demand Demand for for business business products products results results from from demand demand for for consumer consumer products products
Inelastic Inelastic
A A change change in in price price will will not not significantly significantly affect affect the the demand demand for for product product
Joint Joint
Multiple Multiple items items are are used used together together in in final final product. product. Demand Demand for for one one item item affects affects all all
Demand Demand for for business business products products is is more more Fluctuating Fluctuating volatile volatile than than for for consumer consumer products products Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
22
Multiplier Effect (Accelerator Principle)
6
Phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product. Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
23
7
Learning Objective
Describe the seven types of business goods and services.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
24
7
Types of Business Products
On OnLine Line http://www.pmpa.org http://www.pmpa.org
Major Major Equipment Equipment Accessory Accessory Equipment Equipment Raw Raw Materials Materials Component Component Parts Parts
Major Major Categories Categories of of Business Business Products Products
Processed Processed Materials Materials
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Supplies Supplies Business Business Services Services 25
8
Learning Objective
Discuss the unique aspects of business buying behavior.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
26
8
Business Buying Behavior Buying Buying Centers Centers Evaluation Evaluation Criteria Criteria Aspects Aspects of of Business Business Buying Buying Behavior Behavior
Buying Buying Situations Situations Purchasing Purchasing Ethics Ethics Customer Customer Service Service
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
27
8
Buying Center
On OnLine Line http://www.loctite.com http://www.loctite.com http://www.napm.org http://www.napm.org
All those persons in an organization who become involved in the purchase decision.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
28
8
Roles in the Buying Center
Initiator Initiator
Influencers Influencers
Gatekeepers Gatekeepers
Decider Decider
Purchaser Purchaser
Users Users
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
29
8
Roles in the Buying Center
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
30
Evaluative Criteria for Business Buyers
8
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
31
8
Buying Situations
New New Buy Buy
Modified Modified Rebuy Rebuy
Straight Straight Rebuy Rebuy
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
32
8
Buying Situations
New New Buy Buy
A A situation situation requiring requiring the the purchase purchase of of aa product product for for the the first first time. time.
Modified Modified Rebuy Rebuy
A A situation situation where where the the purchaser purchaser wants wants some some change change in in the the original original good good or or service. service.
Straight Straight Rebuy Rebuy
A A situation situation in in which which the the purchaser purchaser reorders reorders the the same same goods goods or or services services without without looking looking for for new new information information or or investigating investigating other other suppliers. suppliers.
Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
33
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