chapter 6copyright ©2008 by south-western, a division of thomson learning. all rights reserved 1...

Chapter 6 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1

MKTG

Designed byAmy McGuire, B-books, Ltd.

Prepared byDeborah Baker, Texas Christian University

Lamb, Hair, McDaniel 2007-2008

Business Marketing6CHAPTER


Learning Outcomes

Describe business marketing

Describe the role of the Internet in business marketing

Discuss the role of relationship marketing and strategic alliances in business marketing

Identify the four major categories of business market customers

LO1

LO2

LO3

LO4


Learning Outcomes

Explain the North American Industry Classification System

Explain the major differences between business and consumer markets

Describe the seven types of business goods and services

Discuss the unique aspects of business buying behavior

LO5

LO6

LO7

LO8


Describe business marketing

What Is Business Marketing?What Is Business Marketing?LO1


LO1

What Is Business Marketing?

The marketing of goods The marketing of goods

and services to individuals and services to individuals

and organizations for and organizations for

purposes other than purposes other than

personal consumption.personal consumption.

BusinessMarketing

BusinessMarketing


LO1

Business Products

The key is intended use.

Business Products: Are used to manufacture other products

Become part of another product

Aid the normal operations of an organization

Are acquired for resale without change in form


REVIEW LEARNING OUTCOMELO1

Business Marketing

cupboards

oven

folderand pen

Teddy bear

CONSUMER BUSINESScupboards

Coffee pot

oven

folderand pen

photocopier


Describe the role of the Internet in

business marketing

Business Marketing Business Marketing on the Interneton the Internet

LO2


Measuring Online Success

LO2

StickinessStickiness

A measure of a Web site’s

effectiveness; calculated by

multiplying the frequency of

visits times the duration of a

visit times the number of pages

viewed during each visit.

Stickiness = Frequency x Duration x Site Reach


Evolution of E-Business Initiatives

LO2

• 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

Past initiatives Present initiatives

Time



The Internet in Business Marketing

THEN

NOW Reduce costsBuild partnerships and alliancesBuild and support brandingDevelop customer-focused technology and systemsIntegrate online and traditional media

Revenue GenerationBasic Marketing Communication

Business Internet Uses

and


Discuss the role of relationship marketing and

strategic alliances inbusiness marketing

Relationship Marketing andRelationship Marketing andStrategic AlliancesStrategic Alliances

LO3


Strategic AlliancesLO3

A cooperative agreement

between business firms

(strategic partnership).

StrategicAlliance

StrategicAlliance


Relationships in Other CulturesLO3

A network of interlocking

corporate affiliates.

KeiretsuKeiretsu



Relationship Marketing and Strategic Alliances

Supplier(like Intel) Supplier

Supplier

Company(like Dell)

Company 1(like Starbucks)

Company 2(like Jim Beam)

Company(like UPS)

Customer/Distributor(like Ford)


Identify the four majorcategories of business

market customers

Major Categories of Business CustomersMajor Categories of Business CustomersLO4


LO4

Major Categories of Business Customers

Producers

Resellers

Governments

Institutions

OEMs

WholesalersRetailers

FederalMunicipalLocal

Schools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs FoundationsNonbusiness organizations


LO4

Producers

OEMs.

Individuals and organizations

that buy business goods and

incorporate them into the

products that they produce for

eventual sale to other producers

or to consumers.

OEMs.

Individuals and organizations

that buy business goods and

incorporate them into the

products that they produce for

eventual sale to other producers

or to consumers.

OriginalEquipment

Manufacturers

OriginalEquipment

Manufacturers



Business Market Customers

Business MarketingBusiness Marketing

InstitutionsInstitutionsResellersResellers

Wholesalers

Retailers

ProducersProducers

OEMs

GovernmentsGovernments

Federal

State

Municipal

County

Unions

CivicClubs

Other

Churches

Foundations

Nonprofits


Explain the North American Industry

Classification System

North American North American Industry Classification SystemIndustry Classification System

LO5


NAICSLO5

NAICSNAICS 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


Example of NAICS HierarchyLO5

NAICS

Level

Sector Subsector Industry Group

U.S.

Industry

NAICS

Code

31-33 334 3346 334611

Description Manufacturing Computer

electronic

product manufacturing

Mfg. and reproduction of magnetic/optical media

Reproduction of software


NAICSLO5

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 firmsMarket potential / market share estimatesSales forecastsNew customer identification


Explain the major differences between

business and consumer markets

Business versus Business versus Consumer MarketsConsumer Markets

LO6


Business versus Consumer Markets

LO6

CharacteristicCharacteristicCharacteristicCharacteristic

DemandDemand

VolumeVolume

# of Customers# of Customers

LocationLocation

DistributionDistribution

Nature of BuyNature of Buy

Buy InfluenceBuy Influence

NegotiationsNegotiations

ReciprocityReciprocity

LeasingLeasing

PromotionPromotion

Business MarketBusiness MarketBusiness MarketBusiness Market

OrganizationalOrganizational

LargerLarger

FewerFewer

ConcentratedConcentrated

More DirectMore Direct

More ProfessionalMore Professional

MultipleMultiple

More ComplexMore Complex

YesYes

GreaterGreater

Personal SellingPersonal Selling

Consumer MarketConsumer MarketConsumer MarketConsumer Market

IndividualIndividual

SmallerSmaller

ManyMany

DispersedDispersed

More IndirectMore Indirect

More PersonalMore Personal

SingleSingle

SimplerSimpler

NoNo

LesserLesser

AdvertisingAdvertising


Demand in Business MarketsLO6

Demand is...Demand is...Demand is...Demand is... DescriptionDescriptionDescriptionDescription

DerivedDerived

InelasticInelastic

JointJoint

FluctuatingFluctuating

Demand for business products results from demand for consumer products.Demand for business products results from demand for consumer products.

A change in price will not significantly affect the demand for product.

Multiple items are used together in final product. Demand for one item affects all.

Demand for business products is more volatile than for consumer products.


Fluctuating DemandLO6

Multiplier EffectMultiplier Effect

(Accelerator Principle)

(Accelerator Principle)

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.


Describe the seven types of business

goods and services

Types of Business ProductsTypes of Business ProductsLO7


Types of Business Products

LO7

Major Equipment Major Equipment

Accessory Equipment Accessory Equipment

Raw Materials Raw Materials

Component Parts Component Parts

Processed Materials Processed Materials

Supplies Supplies

Business Services Business ServicesOnline

http://www.sysco.com



Types of Business Goods and Services

Aluminum ore:raw material

Extruded metal:processed material

Propeller blade:component part

Extruding machine:

major equipmentTool cart:accessory equipment

Uniforms:contracted

service

Paper:supply


Discuss the unique aspects of business

buying behavior

Business Buying BehaviorBusiness Buying BehaviorLO8


Business Buying Behavior

LO8 Customer ServiceCustomer Service

Business EthicsBusiness Ethics

Buying SituationsBuying Situations

Evaluative CriteriaEvaluative Criteria

Buying CentersBuying Centers

Aspects of Business

BuyingBehavior

Aspects of Business

BuyingBehavior


Buying Centers

LO8

Buying CenterBuying CenterAll those persons in an

organization who become

involved in the purchase

decision.


Roles in the Buying Center

LO8

InitiatorInitiator InfluencersInfluencers GatekeepersGatekeepers

DeciderDecider PurchaserPurchaser UsersUsers

Online

http://www.loctite.com


Evaluative Criteria

LO8

Quality

Service

Price


Buying Situations

LO8

New BuyNew Buy A situation requiring the purchase of a product for the first time.

A situation requiring the purchase of a product for the first time.

ModifiedRebuy

ModifiedRebuy

A situation where the purchaser wants some change in the original good or service.

A situation where the purchaser wants some change in the original good or service.

StraightRebuy

StraightRebuy

A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.

A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.


Biz Flix

LO8 Bowfinger


Customer Service

LO8

Divide customers into groups based on their value

Create policies that govern how service will be allocated among groups



Business Buying Behavior

Customer service

InitiatorInfluencerDecider GatekeeperPurchaserUser

Buying Center

Quality Service Price

EvaluativeCriteria

Buying Situations

New buyStraight rebuyModified rebuy

chapter 6copyright ©2008 by south-western, a division of thomson learning. all rights reserved 1...

Documents

business marketing slide

division of thomson

business initiatives

business products

chapter slide

marketing of goods

learning outcomes

types of business goods