Introduction to Business-to-Business (B2B) Marketing

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 TO BUSINESS IS NOT BUSINESS TO CONSUMER • Do Not Serve Same Types of Customers • Do Not Serve the Same Number of Customers • Do Require Strong Buyer-seller Relationships • Do Depend on Strong Buyer Demand for their Customer’s Products

4. 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

5. What Is Business Marketing? • Those activities that facilitate exchanges involving products and customers in business markets • Activities in which 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.

6. What Is Business Marketing? • Is it a consumer transaction or a business 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.

7. B2B versus B2C Marketing

8. 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

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

10. 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

11. 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

12. 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

13. 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.

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

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