Scope of B2B Marketing chapter 2 in detail.pdf

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1. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part. 11
Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
Defining the Scope of
Business (B2B) Marketing

2. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Business Markets
•
Business markets are markets where products or services are sold to
businesses, government agencies, or institutions (like schools, hospitals,
etc.) —not to final consumers.
−
These entities buy goods for:
−
Incorporation –to become part of their own products
−
Consumption –to support their daily operations
−
Use –to run their infrastructure
−
Resale –to sell again in the market
•
Theonlymarketsnotofdirectinterestarethosedealingwithproductsor
servicesthatareprincipallydirectedatpersonaluseorconsumptionsuch
aspackagedgroceryproducts,homeappliances,orconsumerbanking.

3. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
Types of Business Market
(B2B) Customers

4. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part. 4
Types of Business Market (B2B) Customers
GovernmentalCustomersInstitutional CustomersCommercialCustomers
FederalgovernmentSchools,colleges,and
universities
Manufacturers
•
Non-defenseHealth-careorganizationsConstructioncompanies
•
DefenseLibrariesServicefirms
StategovernmentFoundationsTransportationcompanies
LocalgovernmentArtgalleriesSelectedprofessionalgroups
•
CountiesClinicsWholesalers
•
TownshipsRetailers

5. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part. 5
Types of Business Market (B2B) Customers
•
CommercialEnterprisesasCustomers
•
Commercialenterprisesincludemanufacturers,constructioncompanies,servicefirms(for
example,hotels),transportationcompanies,selectedprofessionalgroups(forexample,
dentists),andresellers(wholesalersandretailerspurchasingequipmentandsuppliesto
useintheiroperations).
•
GovernmentBuying
•
Formaladvertisingiswhenthegovernmentsolicitsbidsfromappropriatesuppliers.
•
Negotiatedcontractisusedwhentheproductcannotbedifferentiatedonthebasisof
pricealoneorwhentherearefewpotentialsuppliers
•
Institutions as Customers
•
Institutional buying allows institutions as a group to enjoy lower prices, improved quality
(through improved testing and supplier selection), reduced administrative costs, and
greater competition

6. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
Business (B2B) Markets vs.
Consumer (B2C) Markets

7. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Consumer MarketsBusiness MarketsAspect
Individual consumers or householdsOrganizations, institutions,
governments
Buyer
For personal or household useFor production, resale, or operationsPurchase Purpose
Small, individual purchasesLarge, bulk purchasesBuying Volume
Emotional, informal, individual
decision-making
Rational, formal, multi-level decision-
making
Decision Process
Transactional, brand-drivenLong-term, relationship-drivenRelationship Focus
Moderate to high, often driven by
perception
High, with focus on value and ROIPrice Sensitivity
Mass advertising, promotionsPersonal selling, customized solutionsMarketing Approach
Direct (based on personal needs)Derived (dependent on end-consumer
demand)
Demand
Business Markets vs Consumer Markets

8. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Demand
•
DerivedDemand referstothedirectlinkbetweenthedemandforanindustrial
productandthedemandforconsumerproducts:Thedemandforindustrialproducts
isderivedfromtheultimatedemandforconsumerproducts.
•
FluctuatingDemand: Becausedemandisderived,thebusinessmarketermust
carefullymonitordemandpatternsandchangingbuyingpreferencesinthehousehold
consumermarket,oftenonaworldwidebasis.
•
Ex-Microchipsshortage
•
Thebullwhipeffectinsupplychainsisasupplychainphenomenonthatdescribes
howsmallfluctuationsinpointofsaledemandcancauseprogressivelylarger
fluctuationsindemandatthedistributor,manufacturer,andrawmaterial
supplierlevels

9. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Demand
•
StimulatingDemand -Somebusinessmarketersmustnotonlymonitor
finalconsumermarketsbutalsodevelopamarketingprogramthat
reachestheultimateconsumerdirectly.
•
DemandElasticity referstotheresponsivenessofthequantity
demandedtoachangeinprice.

10. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part. 10
A Global Market Perspective
B2B (Business-to-Business)
Illustration: Amul as a B2C and B2B Marketer
B2C (Business-to-Consumer)
Amul supplies bulk milk powder, butter, and
cheese to bakeries, hotels, restaurants, food
chains (like Pizza Hut), and even export
markets.
Amul sells milk, butter, cheese, curd, and ice
creams directly to end consumers through
retail outlets.
•Companiesmustincreasinglylookbeyonddomesticmarkets tostaycompetitive.
•Forexample,demandforIndianpharmaceuticals,autoparts,softwareservices,andFMCGproducts is
growingfasterinforeigncountries(likeAfrica,SoutheastAsia,andLatinAmerica)thaninIndiaitself.
•Hence,Indianbusinessmarketersmustadoptaglobalmindset—notjustfocusingonIndianconsumers,
butalsoforeignB2Bclientsandpartners.
Amul is present in more than 40 countries and exports dairy products to the Middle East, USA, and Southeast
Asia, showcasing its global B2B strategy.

11. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
Classifying B2B Products and
Services

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Classifying Goods for the Business Market

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Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Adapting Business Marketing
Strategy Among the
Classification Categories

14. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Illustration: Manufactured Materials and
Parts
•
Manufactured materials and
parts enter the buying
organization’s own product.
Whether a part is
standardized or customized
often dictates the nature of
marketing strategy.
Table 1-4 Business Marketing Strategy Adaptations
Marketing Strategy
Emphasis:
Manufactured
Materials and Parts:
•
PersonalSelling
•
RelationshipMarketing
Customized
•
Typicallypurchased
insmallerquantities
•
CompetitivePricing
•
ReliableDelivery
•
SupportingServices
•
UseIndustrial
Distributorsfor
smalleraccounts
Standardized
•
Typicallypurchased
inlargerquantities

15. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Illustration: Installations
•
Installations such as fixed
equipment are classified as
foundation goods because
they are capital assets that
affect the buyer’s scale of
operations.
Installations:
•
Product/Technology
•
Service Capabilities
•
Personal Selling
•
Relationship Marketing
•
Initial price/distribution/advertising
play lesser roles
Customized
•
Direct
distributionis
thenorm
•
Product/Technology
•
Service Capabilities
•
Personal Selling
•
Relationship Marketing
•
Initial price/distribution/advertising
play lesser roles
Standardized
•
Industrial
distributor is
the norm

16. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part. 16
Illustration: Supplies
•
Most supply items reach a
broad market of business
customers from many
different industries.
Supplies:
•
Personal Selling
•
Relationship Marketing
•
Differentiated Product/Services
Customized
•
For firms looking
to provide a
differentiated
offering
compared to
competitors.
•
Advertising directed to resellers
and final users
•
Catalog Listings
•
Personal selling confined to
resellers and large final users
•
Competitive Pricing
•
Timely Reliable Delivery
Standardized
•
Typically the
norm for this
category

17. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part.
Key Imperatives for Business
Marketing Management

18. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Developing Distinctive Capabilities
•
Market-sensing capability concerns how well the organization is
equipped to continuously sense changes in its market and anticipate
customer responses to marketing programs.
•
Customer-linking capability comprises the particular skills, abilities,
and processes an organization has developed to create and manage
close customer relationships.

19. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Strategy Imperatives for B2B Marketers
•
Strategy Imperatives for B2B Marketers
•
Customer relationship management capabilities include all the skills
required to identify, initiate, develop, and maintain profitable
customer relationships.

Understand the Customer Decision Journey

Customer Engagement

Align Strategy and Sales

20. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part. 20
Creating the Customer Value Proposition
•
A customer value proposition captures the particular set of benefits that a supplier
offers to advance the performance of the customer organization.
•
Value Proposition Illustrated
•
Tata Steel supplies advanced high-strength steel to Indian automobile
manufacturers like Maruti Suzuki, Tata Motors, and Mahindra.
Advanced Material Innovation:
High-tensile, lightweight steel grades to support car weight reduction and better fuel efficiency.
Sustainability Advantage:
Eco-efficient processes and lower carbon emissions —something automakers value for ESG goals.
Same Price, Higher Efficiency:
Offers better-performing steel without major cost increasesvs traditional grades

21. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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A Relationship Emphasis
RelationshipMarketingreferstoallmarketingeffortsaimedatestablishing,developing,andmaintainingstrong,
ongoingrelationshipswithcustomerstoensurerepeatbusinessandloyalty.It'sespeciallyimportantin B2B
(Business-to-Business)settingswherepurchasesarelarge,complex,andbasedontrust.
AshokLeyland—CommercialVehicleManufacturer
AshokLeylandmanufacturestrucksandbusesandsellsto:
•Statetransportcorporations|Logisticscompanies(like
VRL,GATI)|Defenseorganizations
Thesecustomersbuyinbulk,requirecustomization,and
demandafter-salessupport.
PurposeActivity
Toensuredirectcommunication
andresolveclientissuesquickly.
Dedicated account
managers
Vehiclesdesignedforcustomer-
specificusecases(e.g.,cold
storagetrucks,sleepercabins).
Customized vehicle
solutions
Mobileservicevansandtrained
techniciansdeployedatcustomer
depots.
On-siteservicesupport
Usestelematics(iAlertsystem)to
helpclientstrackvehicle
performance and reduce
downtime.
Fleetperformancetracking
Helpsclients’driversimprovefuel
efficiencyandsafety.
Trainingfordrivers

22. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Characteristics of Business Market Customers
ExampleCharacteristic
•
Among Dell’s customers are Boeing, Arizona
State University, and numerous state and
local government units
•
Business market customers are
comprised of commercial enterprises,
institutions, and governments
•
An individual may buy one unit of a software
package upgrade from Microsoft while
Citigroup purchases 10,000
•
A single purchase by a business
customer is far larger than that of an
individual consumer
•
New home purchases stimulate the demand
for carpeting, appliances, cabinets, lumber,
and a wealth of other products
•
The demand for industrial products is
derived from the ultimate demand for
consumer products
•
IBM’s relationship with some key customers
spans decades
•
Buyer–seller relationships tend to be
close and enduring
•
A cross-functional team at Procter & Gamble
(P&G) evaluates alternative laptop personal
computers and selects Hewlett-Packard
•
Buying decisions by business customers
often involve multiple buying influences,
rather than a single decision maker

23. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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The Nature of Buyer-Seller
Relationships in a Product’s
Supply Chain

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Consider the Supply Chain for an EV
•
Figure illuminates the importance of a relationship perspective in business marketing
by considering the chain of suppliers involved in the creation of an electric vehicle
(EV).

25. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or in part. 25
Supply Chain Management
•
Supply chain management is a technique for linking a manufacturer’s operations with
those of all of its strategic suppliers and its key intermediaries and customers to
enhance efficiency and effectiveness.
•
Managing Relationships in the Supply Chain
•
Supply Chain Customers
•
Users purchase industrial products or services
•
Original Equipment Manufacturers (OEMs) purchase industrial goods
•
Dealers and Distributors include commercial enterprises
•
Understanding Buying Motivations -each purchases the product for a different reason

26. Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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Hutt, Business Marketing Management: B2B, 13th Edition. © 2024 Cengage. All Rights Reserved. May not be scanned, copied or
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A Look Ahead

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Framework for Business Marketing Management