Business-to-Business Marketing BSM 3572

1. Business-to-Business MarketingBSM 3572 Lecture 1 Lecturer: Leo Kwan

2. Assessment • CA (40%) • Test (10%) • Project (20%) • Class Participation (10%) • Exam (60%)

3. Consumer Business Organizational Behavior Organization Demand Analysis Business Segmentation Targeting Positioning Product Channel Promotion Price Managing Products & Innovation Supply Chain Promotional Tools Distribution Business Relationship Business Services Implementing Evaluation and Review

4. Nature of Business Marketing Objectives: • Define Business Marketing • Differentiate Business Marketing from Consumer Marketing • Identify 3 Types of Business Market Customers • Describe the characteristics of each type of business customers • Recognize the need for a market-centered organization

5. Do you want to own this product? Industrial products Household product

6. Business Markets Markets for products and services bought by business, government, or institutions Products to be incorporated into other products, used , consumed, or resold

7. 1. products and services bought by business, government, or institutions • Process of determining needs and developing marketing mixes for organizations • The nature of customer & how the product is used distinguishes business and consumer goods marketing. • Note that the industrial rice cooker can be tailor made for the industry.

8. 2. Products to be incorporated into other products, used , consumed, or resold- LCD TV Products to be incorporated into other products, used , consumed, or resold Sony LCD TV Samsung LCD panel

9. Video – Selling of Pork • From the video, you are required to find out 4 customers and 4 suppliers. Watch the ATV News from the DVD

10. ATV News story on pork selling licence licence licence licence Farms Health Dept Consumer Council Pork Distributor in China 五豐行 Pork retailers Farms Pork buyers Farms Customer Customer Customer Customer Supplier Supplier Supplier Supplier

11. Business Marketing Consumer Marketing Individual persons. Customers are large in numerous. Customers are widely dispersed geographically Mostly companies, institutions, or government. Customers are fewer in number Customers Buying Behavior Professionally trained and technically qualified buyers. Usually, it is a highly specialized job in a company. Most consumers lack specialized or technical knowledge about the product

12. Business Marketing Consumer Marketing Supplier/ Customers relationship Close, Interact in product design & problem-solving. e.g. the seller knows me well. Little Contact e.g. seller not even knows my name. Decision making Buying process contains more stages and needs to follow a procedure in a company. Purchase decisions are made by a team of people. Many buying influences Buying process contains fewer stages and is a simple personal decision.

13. Business Marketing Consumer Marketing Complex, technical and need to be trained in using; Buyer requires detailed specifications, After sales service is very important. Product Standardized product. Style is the more important buying factor. Price Negotiated, Bidding process, Different prices for different users. Fixed. Standard price.

14. Different prices for different users $219

15. Business Marketing Consumer Marketing Promotion Personal Selling e.g. sales representatives, use catalogues Mass Advertising Direct, fewer intermediaries at each level. Delivery is made to customer’s door, even for small value stationeries. Indirect, many intermediaries Pick up at outlets. e.g. Priceright, Fortress Channels

16. Business Marketing Consumer Marketing Payment Method It is common that a payment is made at least 30 days after the products or services have been received. Payment is usually made by company cheque or direct debit into the bank account of the supplier. Payment is made immediately when the product is purchased. Pay by cash or by credit card.

17. Business Market Customers 3 types:- A) Commercial enterprises 1. End Users -- purchase goods for use in making other products -- buy equipment and machinery that are employed to manufacture other products

18. Business Market Customers 2. OEM -- Buy products which will be incorporated into a finished product 3. Resellers -- including dealers and distributors who purchase business products for the purpose ofresellingthem tousers & OEM

19. Who is your Customer? Sony is an OEM Distributor / Intermediary manufacturer Panasonic is an OEM Reseller

20. Video: Microwave Cooker- Program 5, Chapter 2 at 6:55 to end • Things to observe: • 尚朋堂 is the OEM, but product not selling well. • Shung Hing as distributor (reseller) for the microwave cooker. • China Light and Power as the retailer (or reseller)

21. Business Market Customers B) Governments • Government Housing Department C) Institutions • e.g. hospitals, universities, etc • There is a seasonal buying pattern. They usually purchase their needed products and services by inviting tender from suppliers (will be practised at seminar)

22. What does the Tendering Process involve? • tender process is used to control every step in a company purchase to ensure that it buys the right products at the best price • Formal tendering will take one of two forms either an "open" tender process or a one-off "select" list process.

23. Stage 1 Potential suppliers are vetted for their suitability and will be given a "pre-qualification questionnaire" (PQQ) to complete. They will be assessed according to their general suitability to become a qualified supplier Stage 2 Organizations short-listed from Stage 1 will be invited to tender against a specification and to complete and return the tender documents by a specific date. The buying organization will award the contract to the supplier it considers offering the best value in terms of cost and quality Tendering Process

24. Summary • Business market • Business marketing • Business vs consumer goods marketing • 3 types of business market customers • A market-centered organization

25. End of Lecture 1