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INTRODUCTION TO BUSINESS TO BUSINESS MARKETING. CHAPTER 1. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013. 1. Defining the Market.

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INTRODUCTION TO BUSINESS TO BUSINESS MARKETING


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  1. INTRODUCTION TO BUSINESS TO BUSINESS MARKETING CHAPTER 1 Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 1

  2. Defining the Market • Organizations buy products and services for use in production of other products and services. • They also buy goods which they resell or rent to others. • B2B market includes customers such as hospitals, charities and government departments. • Organizations buy virtually every type of product and service. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 2

  3. Effective Marketing Programs • Increasing sales. • Reducing costs. • Meeting government regulations/avoiding negative PR. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 3

  4. Exhibit 1.1 Cisco Systems advertisement Reprinted with permission of Cisco Systems Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 4

  5. The Trappings of Marketing • Declarations of support from top management. • Creating a marketing organization complete with product management. • New strategic or marketing planning approaches. • Complete marketing information (MIS) systems. • Increasing marketing expenditures for advertising, research and training. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 5

  6. Conversion Sequence Fig. 1.1 Conversion sequence Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 6

  7. Transactions to Make a Hairdryer Fig. 1.2 Transactions to make a hairdryer Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 7

  8. Twelve Major Differences Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013

  9. Differences between B2B and B2C Internal Differences • Interdependence of departments is greater in B2B. • Product managers have wider responsibilities in B2B, and must gain wider cooperation from other department heads. • Marketing strategy equals corporate strategy. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013

  10. Differences between B2B and B2C Customer/Marketing • B2B customers tend to be more rational in their decision-making. • There is a narrower customer base in B2B: fewer customers, but larger order values. • More buying influences and locations in B2B. • Segmentation operates differently. • More markets and channels in B2B. • Personal contact with customers is more important in B2B. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013

  11. Differences between B2B and B2C Uncontrollables/Environment • Technological change has a greater impact on B2B markets because of the costs of retooling and difficulty of predicting the effect on consumer markets. • Demand in B2B markets is derived from consumer demand. • B2B marketers are more distant from the end user, and therefore operate with less information. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 11

  12. Relationship Building • Development of relationships in B2B markets plays a significant role. • Relationships are not always long-term in B2B markets, but interchange is more than a simple transaction. • Relationship needs can be used as a segmentation variable in B2B markets. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013

  13. The IMP Approach • IMP sees B2B marketing as an ongoing interaction between buyers and sellers. • There are 4 major differences between traditional and IMP approach: • Single purchases vs. long-term complex relationship • Active vs. passive role in transactions • Stable vs. unstable markets • Individual vs. supplier-customer interaction focus Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 13

  14. Business Goods Classification • Entering goods and services: products and services that become part of other products – raw materials, component parts and materials. • Foundation goods and services: products used to make other products, e.g. office buildings, machine tools. • Facilitating goods and services: products and services that help an organisation achieve its objectives, but which do not enter the production process, e.g. market research services, cleaning services and products, accountancy services. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013 14

  15. Summary • Effective B2B marketing relies on three appeals: increasing sales, reducing costs, meeting government regulations. • “Trappings” of marketing cannot substitute for true customer orientation. • B2B markets are larger and have more transactions than B2C markets. • Internet’s influence on buying strategies does not eliminate need for basic marketing orientation. • There are major differences between B2B and B2C marketing. • Relationships are more important in B2B than in B2C. • B2B products are classified as entering, foundation, and facilitating. Use with BUSINESS TO BUSINESS MARKETING MANAGEMENT: A GLOBAL PERSPECTIVE ISBN 978-0-415-53702-5 Published by Routledge 2013