Lamb Hair Mc Daniel MKTG 2009 2010 7

What Is Business Marketing? Business Marketing The marketing of goods and services to …………. and ………………for purposes other than ……………. . LO 1 Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 2

Consumer vs Business Products Business Marketing CONSUMER cupboards BUSINESS cupboards Coffee pot oven folder and pen Chapter 6 Teddy bear photocopier Copyright © 2010 Cengage Learning Inc. All rights reserved folder and pen 3

Business Marketing § § § Organization market is larger than consumer market (B 2 B marketing/industrial marketing) Easy to define need: do not have the “less rational” needs of consumers (fewer customers) Organizations purchase for: 1. Resale 2. Use in business 3. Or to produce other items § Chapter 6 B 2 B internet marketing is huge (disintermediation) Copyright © 2010 Cengage Learning Inc. All rights reserved 4

Internet B 2 B Trends Chapter 6 Copyright © 2010 Cengage Learning Inc. All

Evolution of E-Business Initiatives • Revenue generation • Aggressive disintermediation initiatives • Basic marketing communication strategies • Reduce costs • Build channel partnerships and trust • Customer-focused technology and systems • Brand building and development • Integrate online and traditional media Time LO 2 Chapter 6 Past initiatives Present initiatives Copyright © 2010 Cengage Learning Inc. All rights reserved 6

Relationship Marketing § Decrease in costs: changes in traditional relationship (long-term interaction, not just 1 transaction) – Cooperation (strategic alliances): • Mutual goals (still difficult) – Info. Sharing: • Provide data to enhance decisions (web – Dell) • Potential for abuse (GM sends specs to others) – Keiretsu Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 7

Relationship Commitment § Adaptations: – Make changes for one customer (NUMMI; Mc. Donald’s & China potatoes) – May hedge bets with multiple suppliers § Operational linkages (outsourcing: train other jobs) – Ties with internal processes (place people in plants) – Allows better coordination Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 8

Mc. Donald’s in Saudi Arabia Chapter 6 Copyright © 2010 Cengage Learning Inc. All

Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 10

Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 11

Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 12

Legal Bonds § Firestone-Ford, Maytag-Hoover + Chapter 6 Copyright © 2010 Cengage Learning Inc.

Business Market Customers Business Marketing Producers Resellers Governments Institutions OEMs Wholesalers Federal Unions Churches Retailers State Civic Clubs Foundations Municipal Other Nonprofits County Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 14

NAICS North American Industry Classification System Chapter 6 A detailed numbering system developed by the U. S. , Canada, and Mexico to classify North American business establishments by their main production processes. Copyright © 2010 Cengage Learning Inc. All rights reserved 15

Example of NAICS Hierarchy NAICS Level Sector Subsector Industry Group U. S. Industry NAICS Code 31 -33 334611 Computer electronic product manufacturing Mfg. and reproduction of magnetic/ optical media Reproduction of software Description Manufacturing Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 16

An NAICS Code Example (apparel industry) Construction (23) Manufacturing (31) Food (311) Apparel (315) Knitting Mills (3151) Cut & Sew Apparel (3152) Apparel Accessories (3159) Others… Women’s & Girls (31523) Men’s and Boy’s (31522) Other Cut & Sew (31529) Others… Underwear & Nightwear (315221) Suits & Coats (315222) Shirts (315223) Others… Chapter 6 Others… Copyright © 2010 Cengage Learning Inc. All rights reserved 17

NAICS Provides a 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 New customer identification Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 18

Types of Business Products Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Online Chapter 6 Business Services Copyright © 2010 Cengage Learning Inc. All rights reserved 19

Business Buying Behavior Buying Centers Evaluative Criteria Aspects of Business Buying Behavior Buying Situations Business Ethics LO 8 Chapter 6 Customer Service Copyright © 2010 Cengage Learning Inc. All rights reserved 20

Buying Centers Buying Center All those persons in an organization who become involved in

Roles in the Buying Center Initiator ……………. Gatekeepers ……………. Purchaser …………. LO 8 Chapter

Evaluative Criteria u Quality u Service u Price LO 8 Chapter 6 Copyright ©

Buying Situations …… Buy A situation requiring the purchase of a product for the first time. …………. . Rebuy A situation where the purchaser wants some change in the original good or service. ………… Rebuy A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. LO 8 Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 24

Customer Service u Divide customers into groups based on their value u Create policies that govern how service will be allocated among groups LO 8 Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 25

Team activity § Get into groups of 3 -4 § You are acting as the marketing team for Huggies diapers, a brand in head-to-head competition with Pampers. § You are considering unlocking the potential of the business market to increase your share of the disposable diapers market…. § But HOW? ? Chapter 6 Copyright © 2010 Cengage Learning Inc. All rights reserved 26