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Products and Services for Businesses. . Chapter 13. Modular: Afjal Hossain Assistant Professor, Department of Marketing PSTU. McGraw-Hill/Irwin International Marketing, 13/e. Major Categories U.S. Exports. Insert Exhibit 13.1. Demand in Global Business-to-Business Markets.

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Products and Services for Businesses

.Chapter

13

Modular:

AfjalHossain

Assistant Professor, Department of Marketing

PSTU

McGraw-Hill/Irwin International Marketing, 13/e

demand in global business to business markets
Demand in Global Business-to-Business Markets
  • Demand in industrial markets is by nature more volatile
  • Stages of industrial and economic development affect demand for industrial products
  • The level of technology of products and services make their sales more appropriate for some countries than others
the volatility of industrial demand
The Volatility of Industrial Demand
  • Cyclical swings in demand
    • Professional buyers tend to act in concert
    • Derived demand accelerates changes in markets
  • Measures to manage volatility:
    • Maintain broad product lines
    • Raise prices faster and reduce advertising expenditures during booms
    • Ignore market share as a strategic goal
    • Eschew layoffs
    • Focus on stability

Derived demand can be defined as demand dependent on another source.

derived demand example
Derived Demand Example
  • Insert Exhibit 13.2
stages of economic development
Stages of Economic Development
  • Stage 1 – the traditional society
  • Stage 2 – preconditions for takeoff
  • Stage 3 – take off
  • Stage 4 – drive to maturity
  • Stage 5 – the age of mass consumption
technology and market demand
Technology and Market Demand
  • Trends spurring demand for technologically advanced products:
    • Expanding economic and industrial growth in Asia
    • The disintegration of the Soviet empire
    • The privatization of government-owned industries worldwide
  • The companies with the competitive edge will be those whose products are:
    • Technologically advanced
    • Of the highest quality
    • Accompanied by world-class service
quality and global standards
Quality and Global Standards
  • Perception of quality rests solely with the customer
    • Level of technology reflected in the product
    • Compliance with standards that reflect customer needs
    • Support services and follow-through
    • Price relative to competitive products
  • Relevant quality features
quality is defined by the buyer
Quality is Defined by the Buyer
  • How well a product meets the specific needs of the buyer
  • The price-quality relationship
  • Product design must be viewed from all aspects of use
    • Climate
    • Terrain
  • Total Quality Management (TQM)
  • Lack of universal standards
  • Country-specific standards
  • The metric system
iso 9000 certification an international standard of quality
ISO 9000 Certification: An International Standard of Quality
  • Positively affects the performance and stock prices of firms
  • Certification of the existence of a quality control system a company has in place to ensure it can meet published quality standards
  • Generally voluntary
  • EU Product Liability Directive
  • Now a competitive marketing tool in Europe and around the world
  • The ACSI approach
business services
Business Services
  • For many industrial products the revenues from associates services exceed the revenues from the products
    • Cellular phones
    • Printers
  • Leasing capital equipment
  • Services not associated with products
    • Boeing at-sea-satellite-launch services
    • Ukrainian cargo company space rental on giant jets
after sale services
After-Sale Services
  • Installation
  • Training
  • Spare and replacement parts
    • Delivery time
    • Cost of parts
  • Service personnel
  • Crucial in building strong customer loyalty
  • Almost always more profitable than the actual sale of the machinery or product
other business services
Other Business Services
  • Client followers
  • Mode of entry
    • Licensing
    • Franchising
    • Direct investment
  • Protectionism
  • Restrictions on cross-border data flows
trade shows a crucial part of business to business marketing
Trade Shows: A Crucial Part of Business-to-Business Marketing
  • Secondary methods for marketing:
    • Advertising in print media
    • Catalogs
    • Web sites
    • Direct mail
  • Trade shows have become the primary and most important vehicle for doing business in many foreign countries
  • Total annual media budget spent on trade events:
    • Europeans – 22 percent
    • Americans – 5 percent
trade shows a crucial part of business to business marketing continued
Trade Shows: A Crucial Part of Business-to-Business Marketing (continued)
  • Trade shows:
    • Provide the facilities for a manufacturer to exhibit and demonstrate products to potential users
    • Allow manufacturers to view competitors products
    • Are an opportunity to create sales and establish relationships with agents, distributors, franchisees, and suppliers
  • Online trade shows:
    • Become useful in difficult economic and/or political circumstances
    • Are obviously a less than adequate substitute for live trade shows
relationship marketing in business to business contexts
Relationship Marketing in Business-to-Business Contexts
  • It is not a matter of selling the right product the first time, but rather of continuously changed the product to keep it right over time.
  • The objective of relationship marketing is to make the relationship an important attribute of the transaction, thus differentiating oneself from competitors.
  • Using the Internet to facilitate relationship building and maintenance
    • Cisco Systems
    • IBM