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7 Business Marketing

7 Business Marketing. Professor Close. Business Marketing. Organization market is larger than consumer market (B2B marketing/industrial marketing) Easy to define need: do not have the “less rational” needs of consumers (fewer customers) Organizations purchase for: Resale Use in business

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7 Business Marketing

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  1. 7Business Marketing Professor Close

  2. Business Marketing • Organization market is larger than consumer market (B2B marketing/industrial marketing) • Easy to define need: do not have the “less rational” needs of consumers (fewer customers) • Organizations purchase for: • Resale • Use in business • Or to produce other items • B2B internet marketing is huge (disintermediation)

  3. Internet B2B Trends

  4. Relationship Marketing • Decrease in costs: changes in traditional relationship (long-term interaction, not just 1 transaction) • Cooperation (strategic alliances): • Mutual goals (still difficult; why Japanese experience during troubled times) • Info. Sharing: • Provide data to enhance decisions (web – Dell) • Potential for abuse (GM sends specs to others) • Keiretsu

  5. Relationship Commitment • Adaptations: • Make changes for one customer (NUMMI; McDonald’s & China potatoes) • May hedge bets with multiple suppliers • Operational linkages (outsourcing: train other jobs; IBM) • Ties with internal processes (place people in plants) • Allows better coordination (Mark @ VSU, windshields, Rubbermaid)

  6. McDonald’s in Saudi Arabia

  7. Legal Bonds • Firestone-Ford, Maytag-Hoover, B2C, over $150, 2 round trip tickets 200,000) • Formalized? But locked in • “Hand shake” allows flexibility (other risks) +

  8. Business Customers • Producers • Resellers • Governments • Institutions

  9. NAICS • North American Industry Classification System • Utility maximization: • Personal selling: customized, large orders • Purchasing specs: precise description of what firm wants • Demand: derived, inelastic, or joint • More volume • B2B = geographically concentrated

  10. Buying Center • Roles – auto parts • Users: work with product, often generate specs (line workers) • Influencers: can modify outcome; dev. Specs, evaluate alternatives (engineers) • Buyers: complete transaction, negotiate (purchasing manager) • Deciders: select or approve (upper/middle management; may be same as buyer) • Gatekeepers: control info. Within buying center (secretary)

  11. Buying Situations (1) • Buying process: 3 types (goes with individual as well) • Straight rebuy • Small, recurring items like office supplies • Little buyer’s time, little info needed • Reminder ads, automate process • Purchasing manager and no one else

  12. Buying Situations (2) • Modified rebuy (contract with dining hall ends) • Some review • Dissatisfy: look for opportunity • Comparison ads: your product • Your client: protect, attention to changing needs • New task buying (plant overseas) • Unique situation • Lots of information, effort, and time • Develop product and vendor specs • Many influences

  13. Dell Commercial

  14. Summary • Types of business products, negotiations • B2B and the internet • Buying situations • Multiple influences – roles • Relationship marketing • NAICS • Buying center • Any questions?

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