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Introduction to Business-to-Business (B2B) Marketing

Introduction to Business-to-Business (B2B) Marketing. What Is Marketing?. the process of planning and executing the conception (product), pricing, promotion, and distribution of ideas, goods, and services to create relationships that satisfy individual and organizational objectives.” .

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Introduction to Business-to-Business (B2B) Marketing

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  1. Introduction toBusiness-to-Business (B2B) Marketing

  2. What Is Marketing? • the process of planning and executing • the conception (product), pricing, promotion, and distribution • of ideas, goods, and services • to create relationships • that satisfy individual and organizational objectives.”

  3. BUSINESS MARKETING IS • MARKETING OF GOODS AND SERVICES TO: • Companies • Government Bodies • Institutions (i.e. hospitals) • Non-Profit Organizations (i.e. American Red Cross) FOR • USE IN PRODUCING THEIR PRODUCTS AND/OR TO FACILITATE THEIR OPERATIONS

  4. What Distinguishes B2B from B2C? • B2B: goods or services are sold for any use other than personal consumption • Note: It is not the nature of the product; it is the reason for thetransaction.

  5. Is it a B2C or a B2B Transaction? • You buy a gear to fix your mountain bike. • Ford buys the same gear to fix a machine. • Xerox buys soft drinks for its cafeterias. • You start a landscaping business and purchase a lawnmower. • The U.S. government buys…anything.

  6. B2B versus B2C Marketing

  7. BUSINESS TO BUSINESS: IT IS ALL ABOUT DEMAND • DERIVED DEMAND • The demand for a company’s products comes from (derived) the demand for their customer’s products. • Most demand comes from consumers. • JOINT DEMAND • Two products are used together and demanded together – Both products are consumed at the same time

  8. Other Characteristics of Business Demand • Inelastic Demand • Fluctuating Demand

  9. Major Uses of B2B Products • For additional production (e.g., components are combined into subassemblies and become part of the finished product) • For use in operations, but not part of the finished product • For resale

  10. Classifying Business Goods & Services 3 Main Categories of Products • Entering Goods • Become part of the finished product • Cost assigned to the manufacturing process • Foundation Goods • Capital Items • Typically depreciated over time • Facilitating Products • Support organizational operations • Handled as overhead expenses

  11. Classifying Business Goods & Services Entering Goods • Raw Materials • Farm products & natural products • Only processed as necessary for handling & transport • Require extensive processing • Manufactured Materials & Parts • Any product that has undergone extensive processing prior to purchase • Component Materials require additional processing • Component Parts generally do not require additional processing

  12. Classifying Business Goods & Services Foundation Goods • Installations • Major long-term investment items • Buildings, land, fixed equipment, etc. • Accessory Equipment • Less expensive & short-lived • Not considered part of fixed plant • Portable tools, PC’s, etc.

  13. Classifying Business Goods & Services Facilitating Products • Supplies • Any supplies necessary to maintain the organization’s operations • Services • Maintenance & Repair support • Advisory support • Logistical support

  14. Categories of B2B Customers • Commercial enterprises • Indirect channel members and facilitators • OEMs (original equipment manufacturers) • Users = customers • Governmental organizations • Institutions

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