01 important slide b2 b

1

B2B MarketingB2B Marketing

2

Industrial Marketing Industrial Marketing consists consists of all activities involved in the of all activities involved in the marketing of products and services marketing of products and services to to

organizationsorganizations ( i.e., commercial enterprise, profit ( i.e., commercial enterprise, profit and not-for-proft-institutions , and not-for-proft-institutions , government agencies, and government agencies, and resellers) resellers)

that use products and services in that use products and services in production of consumer or production of consumer or industrial goods and services and industrial goods and services and to facilitate the operation of their to facilitate the operation of their enterprises enterprises

5

Industrial versus Consumer Industrial versus Consumer Marketing Marketing Industrial MarketsIndustrial Markets Consumer Consumer

MarketsMarkets

Market Market StructuStructurere

•Geographically Geographically concentratedconcentrated

•Relatively few Relatively few buyersbuyers

•Oligopolistic Oligopolistic CompetitionCompetition

•GeographicallGeographically dispersedy dispersed

•Mass marketsMass markets

•Monopolistic Monopolistic CompetitionCompetition

ProducProductsts

•Technical Technical complexitycomplexity

•CustomizedCustomized

•Service, delivery Service, delivery and availability and availability very importantvery important

•StandardizedStandardized

•Service, Service, delivery and delivery and availability availability importantimportant

6

Industrial versus Consumer Industrial versus Consumer Marketing Marketing

Industrial Industrial MarketsMarkets

Consumer Consumer MarketsMarkets

Buyer Buyer behavibehavioror

•Functional Functional involvementinvolvement

•Rational/task Rational/task motives motives predominatepredominate

•Technical Technical expertiseexpertise

•Stable relationsStable relations

•Interpersonal Interpersonal relationshipsrelationships

•ReciprocityReciprocity

•Family Family involvementinvolvement

•Social/Social/psychological psychological motives motives predominatespredominates

•Less technical Less technical expertiseexpertise

•Nonpersonal Nonpersonal relationshiprelationship

7

Industrial versus Consumer Industrial versus Consumer Marketing Marketing

Industrial Industrial MarketsMarkets

Consumer Consumer MarketsMarkets

Decision Decision makingmaking

•Distinct, Distinct, observable stagesobservable stages

•Unobservable, Unobservable, mental stagesmental stages

ChannelChannelss

•Shorter, more Shorter, more direct, fewer direct, fewer linkageslinkages

•Indirect, Indirect, multiple multiple linkageslinkages

PromotiPromotionon

•Emphasis on Emphasis on personal sellingpersonal selling

•Emphasis on Emphasis on advertisingadvertising

PricingPricing •Competitive Competitive bidding, bidding, negotiating on negotiating on complex complex purchasespurchases

•List price on List price on standard itemsstandard items

•List pricesList prices

Value Creation Selling1 You as a seller and your organization devote

large amounts of time and energy.

2 You use capabilities and tools that you’ve never used before to understand how your customers do business and how you can help them improve that business.

3 You’re going to make it your business to know not only your customers but also your customers' customers.

Economies of Industrial Demand

Derived Demand : is the single most important

force in the marketing of industrial goods and

services.

Joint Demand : It occurs when one product requires

the existence of others to be useful.

Cross Elasticity of Demand : Responsiveness of the

sales of one product o a price change in another

The Process Exchange in the Industrial Market

Quality Maintenance

ServiceCustomers

Product Exchange Suppliers


Technical

Economics Customers

Information Exchange

Suppliers


Credit

Leasing Customers

Financial Exchange

Suppliers


Trust

Interpersonal Relationship

Customers

Social

Exchange Suppliers

The Reseller’s MarketResellers purchase goods and services to facilitate the

operation of their businesses.

Everything that is purchased is purchased to make profit.

Wholesalers and retailers are treated as a n element of the

marketing mix (place or distribution) rather than as

served market.

These firms represent a sizable and important Buying

Group whose behavior is similar to Industrial Buyers

Industrial Customers

Industrial Distributors

Commercial Enterprises

Government

Agencies

Profit/non profit institution

Industrial Customers ( Products Purchased)

Commercial Enterprises

Original Equipment Manufactures

(OEM)

Users

Lubricants, coal, hand tools, brooms,

paper and management

consulting services

Steel, cement, generators, motors, batteries, plastics,

farm products, raw materials


Government Agencies

Airplanes, computers, desks,

guns, paint, pencils and legal services


Profit/nonprofit institutions

Surgical appliances and supplies, X-rays

tables, soap and window cleaning

services

Classification of Industrial Products

Raw materials Manufactured materials and

parts

Installations

Accessory equipment

Supplies Business

services

Materials and Parts

Capital

Items

Supplies and Services

Apple iPod(Gross Margin v/s Cost)

We help people find their way

22

Marketing Strategies over Various Marketing Strategies over Various Buying Situations & PhasesBuying Situations & Phases

PhasesPhases New TaskNew Task Modified RebuyModified RebuyProblem Problem RecognitionRecognition

Anticipate Anticipate problem; problem;

use advertising use advertising and creative and creative people to people to convince buyers convince buyers of problem-of problem-solving solving capabilitiescapabilities

In supplier; In supplier; maintain maintain quality/service quality/service standards : out standards : out supplier :watch supplier :watch for developing for developing trendstrends

Solution Solution DeterminatioDeterminationn

Provide detailed Provide detailed products/service products/service information to information to decision makersdecision makers

In supplier and In supplier and out supplier : out supplier : stress capability, stress capability, reliability, and reliability, and problem solving problem solving capabilitiescapabilities

23


PhasesPhases New TaskNew Task Modified RebuyModified Rebuy

DeterminiDetermining needed ng needed itemitem

Provide Provide detailed detailed product/service product/service information to information to decision decision makersmakers

In supplier and In supplier and out supplier : out supplier : stress stress capability, capability, reliability, and reliability, and problem problem solving solving capabilitiescapabilities

Searching Searching for and for and qualifying qualifying suppliersupplier

In supplier : In supplier : maintain maintain dependability; dependability;

out supplier : out supplier : demonstrate demonstrate ability to ability to perform taskperform task

In supplier : In supplier : watch for watch for problems ; problems ;

out supplier : out supplier : demonstrate demonstrate ability to ability to perform taskperform task

24


PhasesPhases New TaskNew Task Modified RebuyModified Rebuy

Analyzing Analyzing proposalsproposals

Understands Understands details of details of customer customer problem/needs problem/needs ; make timely ; make timely proposals proposals

Understands Understands details of details of customer customer problem/needs problem/needs ; make timely ; make timely proposals proposals

25


PhasesPhases Straight RebuyStraight Rebuy

Problem Problem RecognitionRecognition

In supplier : maintain close In supplier : maintain close relationship with users and buyers; relationship with users and buyers;

Out suppliers : convince firm to Out suppliers : convince firm to reexamine alternativesreexamine alternatives

Solution Solution DeterminatiDeterminationon

Same as phase 1Same as phase 1

26


PhasesPhases Straight RebuyStraight Rebuy

Determining Determining needed itemneeded item


Searching Searching for and for and qualifying qualifying suppliersupplier


Analyzing Analyzing proposalsproposals

Make timely proposalMake timely proposal

27

Conflicts Marketing Conflicts Marketing /Engineering/Engineering

Marketing Marketing

ResponsesResponsesEngineering Engineering

ResponsesResponses

New New ProductProducts s DesignDesign

They don’t give They don’t give us products we us products we can sell. can sell.

By the time we By the time we get them to get them to design they are design they are obsolete.obsolete.

We’re limited in We’re limited in what we can what we can design because we design because we have to keep it have to keep it simple for simple for marketingmarketing

Breadth Breadth of the of the Product Product LineLine

We need more We need more varietyvariety

We have too much We have too much variety now.variety now.

28


Marketing Marketing


ResponsesResponses

Product Product AppearaAppearance nce

•Our line Our line looks so looks so inferiorinferior

•Our line does not Our line does not need a lot of fancy need a lot of fancy window dressingwindow dressing

Product Product ProblemsProblems

•Why can’t Why can’t engineering engineering make make workable workable productsproducts

•Neither the Neither the customer nor our customer nor our marketing marketing department department understand the understand the product and how it product and how it is supposed to is supposed to work.work.

29


Marketing Marketing


ResponsesResponses

Product Product PromotioPromotionn

•The The information information we get from we get from engineering is engineering is so dull and so dull and technical that technical that no one would no one would read itread it

•The information The information that marketing that marketing includes is so includes is so exaggerated. We exaggerated. We could get sued for could get sued for false advertising.false advertising.

30


Marketing Marketing


ResponsesResponses

PackaginPackaging g

It looks so It looks so cheap & cheap & functions so functions so poorly that it poorly that it makes our makes our products products hard to sell.hard to sell.

Trying to package Trying to package so many products so many products and hold costs and hold costs down is extremely down is extremely difficult.difficult.

QualityQuality Why can’t we Why can’t we have have reasonable reasonable costs.costs.

We must design so We must design so many products many products with numerous with numerous options that it is options that it is hard to maintain hard to maintain quality and keep quality and keep costs down.costs down.

31


Marketing Marketing


ResponsesResponses

TechnicaTechnical l

We need a We need a technical technical expert to expert to soothe soothe customers customers even they even they really do not really do not have a have a problemproblem

We don’t have We don’t have enough manpower enough manpower to hold the hand to hold the hand of some pet of some pet customers of customers of marketingmarketing

WarrantyWarranty Engineering Engineering always goes always goes by the book, by the book, they don’t they don’t understand understand that you have that you have to bend a to bend a little.little.

Marketing wants Marketing wants us to pay the full us to pay the full amount of every amount of every claim, even an claim, even an invalid oneinvalid one

01 important slide b2 b

Education