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10. Marketing Lamb, Hair, McDaniel. Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University. Business Marketing. CHAPTER 7. Business Marketing. What Is Business Marketing?. LO I.

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Designed by Eric Brengle B-books, Ltd.

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  1. 10 MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Business Marketing CHAPTER 7

  2. BusinessMarketing What Is Business Marketing? LOI The marketing of goods and services to individuals and organizations for purposes other than personal consumption.

  3. 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 LOI

  4. Business Marketing on the Internet LO2 Describe the role of the Internet in business marketing

  5. Stickiness Measuring Online Success LO2 A measure of a Web site’seffectiveness; 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

  6. Evolution of E-Business Initiatives • Revenue generation • Aggressivedisintermediation initiatives • Basic marketingcommunication strategies • Reduce costs • Build channel partnerships and trust • Customer-focusedtechnology and systems • Brand building and development • Integrate online and traditional media Time Past initiatives Present initiatives LO2

  7. StrategicAlliance Strategic Alliances LO3 A cooperative agreement between business firms (strategic partnership).

  8. Keiretsu Relationships in Other Cultures LO3 A network of interlocking corporate affiliates.

  9. Producers OEMs WholesalersRetailers Resellers Federal MunicipalLocal Governments Schools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs Foundations Nonbusiness organizations Institutions Major Categories of Business Customers LO4

  10. OriginalEquipmentManufacturers Producers LO4 OEMsIndividuals and organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers.

  11. NAICS NAICS LO5 A detailed numbering system developed by the United States, Canada, and Mexico to classify North American business establishments by their main production processes. North American Industry Classification System

  12. Example of NAICS Hierarchy LO5

  13. NAICS LO5 • 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

  14. Characteristic Business Market Consumer Market Demand Organizational Individual Volume Larger Smaller # of Customers Fewer Many Location Concentrated Dispersed Distribution More Direct More Indirect Nature of Buy More Professional More Personal Buy Influence Multiple Single Negotiations More Complex Simpler Reciprocity Yes No Leasing Greater Lesser Promotion Personal Selling Advertising LO6 Business versus Consumer Markets

  15. Demand is... Description Derived Demand for business products results from demand for consumer products. Inelastic A change in price will not significantly affect the demand for product. Joint Multiple items are used together in final product. Demand for one item affects all. Fluctuating Demand for business products is more volatile than for consumer products. Demand in Business Markets LO6

  16. Multiplier Effect 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. (Accelerator Principle) Fluctuating Demand LO6

  17. Types of Business Products Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services LO7

  18. Buying Centers Evaluative Criteria Aspects of Business Buying Behavior Buying Situations Business Ethics Customer Service Business Buying Behavior LO8

  19. Buying Center All those persons in an organization who become involved in the purchase decision. Buying Centers LO8

  20. Initiator Influencers Gatekeepers Decider Purchaser Users Roles in the Buying Center LO8

  21. LO8 Evaluative Criteria • Quality • Service • Price

  22. New Buy Modified Rebuy Straight Rebuy A situation requiring the purchase of a product for the first time. A situation in which the purchaser wants some change in the original good or service. A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. Buying Situations LO8

  23. Customer Service LO8 • Divide customers into groups based on their value • Create policies that govern how service will be allocated among groups

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