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. Chapter 13

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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. Chapter 13

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  1. Products and Services for Businesses .Chapter 13 Modular: AfjalHossain Assistant Professor, Department of Marketing PSTU McGraw-Hill/Irwin International Marketing, 13/e

  2. Major Categories U.S. Exports • Insert Exhibit 13.1

  3. 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

  4. 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.

  5. Derived Demand Example • Insert Exhibit 13.2

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. Other Business Services • Client followers • Mode of entry • Licensing • Franchising • Direct investment • Protectionism • Restrictions on cross-border data flows

  14. Expansion of U.S. Law Firms in Selected Cities Worldwide • Insert Exhibit 13.3

  15. 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

  16. 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

  17. 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

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