Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 Learning Objectives: Chapter 6  1. Describe business marketing  2. Describe the role of the internet in business marketing  3. Discuss the role of relationship marketing and strategic alliances in business marketing  4. Identify the four major categories of business market customers  5. Explain the North American industry classification system  6. Explain the major differences between business and consumer markets  7. Describe the seven types of business goods and services  8. Discuss the unique aspects of business buying behavior

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 LO 1 What Is Business Marketing? The marketing of goods and services to individuals and organizations for purposes other than personal consumption. Business Marketing Business Products: Are used to manufacture other products or, Become part of another product or, Aid the normal operations of an organization or, Are acquired for resale without change in form The key is intended use.

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 Role of the Internet in Business Marketing: Measuring Online Success LO 2 Stickiness A measure of a Web site’s effectiveness; calculated by multiplying the frequency of visits times the duration of a visit times the number of pages viewed during each visit. Stickiness = Frequency x Duration x Site Reach

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 Evolution of E-Business Initiatives LO 2 Revenue generation Aggressive disintermediation initiatives Basic marketing communication strategies Reduce costs Build channel partnerships and trust Customer-focused technology and systems Brand building and development Integrate online and traditional media Past initiativesPresent initiatives Time

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5 Discuss the role of relationship marketing and strategic alliances in business marketing Strategic Alliances LO 3 A cooperative agreement between business firms (strategic partnership). Strategic Alliance or Partnership Strategic Alliance or Partnership

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 Relationships in Other Cultures LO 3 A network of interlocking corporate affiliates. Keiretsu

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 LO 4 4 Major Categories of Business Customers Producers Resellers Governments Institutions OEMs Wholesalers Retailers Federal Municipal Local SchoolsHospitalsColleges ChurchesUnionsFraternal groups Civic ClubsFoundations Nonbusiness organizations

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 North American Industry Classification System NAICS- North American Industry Classification System LO 5 NAICS A detailed numbering system developed by the U.S., Canada, and Mexico to classify North American business establishments by their main production processes. What is the North American Industry Classification System?

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 NAICS LO 5 Provides a common industry classification system Valuable tool for marketers in analyzing, segmenting, and targeting markets Data can be used to determine: Number, size, and geographic dispersion of firms Market potential / market share estimates Sales forecasts New customer identification

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 Business versus Consumer Markets The Differences Are: LO 6CharacteristicCharacteristic Demand Volume # of Customers Location Distribution Nature of Buy Buy Influence Negotiations Reciprocity Leasing Promotion Business Market Organizational Larger Fewer Concentrated More Direct More Professional Multiple More Complex Yes Greater Personal Selling Consumer Market Individual Smaller Many Dispersed More Indirect More Personal Single Simpler No Lesser Advertising Pages 88 – 90 in text

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 Demand in Business Markets LO 6 Demand is... DescriptionDescription Derived Inelastic Joint Fluctuating Demand for business products results from demand for consumer products. A change in price will not significantly affect the demand for product. Multiple items are used together in final product. Demand for one item affects all. Demand for business products is more volatile than for consumer products.

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 7 Types of Business Products LO 7 Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services Online

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 REVIEW LEARNING OUTCOME LO 7 Types of Business Goods and Services Aluminum ore: raw material Extruded metal: processed material Propeller blade: component part Extruding machine: major equipment Tool cart: accessory equipment Uniforms: contracted service Paper: supply

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 Discuss the unique aspects of business buying behavior Business Buying Behavior Business Buying Behavior LO 8

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 What are the Unique Aspects of Business Buying Behavior? LO 8 Customer Service Business Ethics Buying Situations Evaluative Criteria Buying Centers Aspects of Business Buying Behavior Aspects of Business Buying Behavior

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 Roles in the Buying Center LO 8 Initiator Influencers Gatekeepers Decider Purchaser Users Online

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Evaluative Criteria LO 8  Quality  Service  Price

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Buying Situations LO 8 New Buy A situation requiring the purchase of a product for the first time. A situation requiring the purchase of a product for the first time. Modified Rebuy Modified Rebuy A situation where the purchaser wants some change in the original good or service. A situation where the purchaser wants some change in the original good or service. Straight Rebuy Straight Rebuy A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 REVIEW LEARNING OUTCOME LO 8 Business Buying Behavior Customer service Initiator Influencer Decider Gatekeeper Purchaser User Buying Center  Quality  Service  Price Evaluative Criteria Buying Situations New buy Straight rebuy Modified rebuy

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Summary – we know 1. What business marketing is 2. the role of the internet in business marketing 3. The role of relationship marketing and strategic alliances in business marketing 4. The four major categories of business market customers 5. The North American industry classification system 6. The major differences between business and consumer markets 7. The seven types of business goods and services 8. The unique aspects of business buying behavior

Chapter 6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 Now Go to mktg4me.com At this site, study and review the flash cards Take the practice quiz on chapter 6 Explore other aspects of this site for chapter 6 Take chapter 6 quiz in the allocated time on WebCt Note: You might also take the extra credit quiz even if you have not read the article.