introduction Business to business marketing

Introduction to business to business marketing

1. Introduction to
Business-to-Business
(B2B) Marketing

2. What Is Marketing?
•the process of planning and
executing
•the conception (product), pricing,
promotion, and distribution
•of ideas, goods, and services
•to create relationships
•that satisfy individual and
organizational objectives.”

3. BUSINESS TO BUSINESS IS NOT
BUSINESS TO CONSUMER
•Do NotServe Same Types of Customers
•Do NotServe the Same Number of Customers
•DoRequire Strong Buyer-seller Relationships
•DoDepend on Strong Buyer Demand for their
Customer’sProducts

4. BUSINESS MARKETING
IS
•MARKETING OF GOODS AND SERVICES TO:
–Companies
–Government Bodies
–Institutions (i.e. hospitals)
–Non-Profit Organizations (i.e. American Red Cross)
FOR
•USE IN PRODUCING THEIR PRODUCTS
AND/OR TO FACILITATE THEIR OPERATIONS

5. •Those activities that facilitate
exchanges involving products and
customers in business markets
•Activities in which goods or services
are sold for any use other than
personal consumption
•Note: It is notthe nature of the
product; it is the reason for the
transaction.
What Is Business Marketing?

6. •Is it a consumer transaction or a
business transaction?
You buy a gear to fix your mountain bike.
Ford buys the same gear to fix a machine.
Xerox buys soft drinks for its cafeterias.
You start a landscaping business and
purchase a lawnmower.
The U.S. government buys…anything.
What Is Business Marketing?

7. B2B versus B2C Marketing
Characteristic B2B Market B2C Market
Sales volume Greater Smaller
Purchase volume Greater Smaller
Number of buyers Fewer Many
Size of individual buyersLarger Smaller
Location of buyers Concentrated Diffuse
Buyer-seller relationshipCloser More Impersonal
Nature of channel More direct Less direct
Buying influences Multiple Single/Multiple
Type of negotiations More complex Simpler
Use of reciprocity Yes No
Use of leasing Greater Less
Key promotion method Personal Selling Advertising

8. 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 comes from consumers.
•JOINT DEMAND
–Two products are used together and demanded
together –Both products are consumed at the
same time

9. •Inelastic Demand
•Fluctuating Demand
Other Characteristics of Business Demand

10. Major Uses of B2B Products
For additional production
(e.g., components are combined
into subassemblies and become
part of the finished product)
For use in operations, but not
part of the finished product
For resale

11. Classifying Business Goods & Services
3 Main Categories of Products
Entering Goods
Become part of the finished product
Cost assigned to the manufacturing process
Foundation Goods
Capital Items
Typically depreciated over time
Facilitating Products
Support organizational operations
Handled as overhead expenses

12. Classifying Business Goods & Services
Entering Goods
Raw Materials
Farm products & natural products
Only processed as necessary for handling & transport
Require extensive processing
Manufactured Materials & Parts
Any product that has undergone extensive processing prior
to purchase
Component Materialsrequire additional processing
Component Partsgenerally do not require additional
processing

13. Classifying Business Goods & Services
Foundation Goods
Installations
Major long-term investment items
Buildings, land, fixed equipment, etc.
Accessory Equipment
Less expensive & short-lived
Not considered part of fixed plant
Portable tools, PC’s, etc.

14. Classifying Business Goods & Services
Facilitating Products
Supplies
Any supplies necessary to maintain the
organization’s operations
Services
Maintenance & Repair support
Advisory support
Logistical support

15. Categories of B2B Customers
•Commercial enterprises
–Indirect channel members and
facilitators
–OEMs (original equipment
manufacturers)
–Users = customers
•Governmental organizations
•Institutions