Business Markets and Business Marketing CHAPTER 1

 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 Business Marketing Chapter 1 - Introduction to Business Marketing

 Why should you care? Business Markets Chapter 1 - Introduction to Business Marketing

Business marketingBusiness MarketingConsumer Marketing McDonalds Salt is added to fries You Salt mineMorton’s SaltKroger Salt is sold in shakers Salt is minedSalt is processed into food-grade or industrial grade salt General Foods Salt is added to frozen dinners Example

BUSINESS TO BUSINESS  Different Customers  Close Business and Personal Relationships  Shorter Distribution Channels  Emphasis on Personal Selling  Dependence on WEB Integration and Unique Promotions Because of Leads to Through Leads to Its All About Relationships Chapter 1 - Introduction to Business Marketing

 The size and location of customers – bigger, fewer, and concentrated  Strict performance standards for products by customers (knowledgeable customers)  Complicated purchasing decisions – Involvement and time Business Market Challenges Chapter 1 - Introduction to Business Marketing

 Raw Materials  Manufacturing Materials (Transformed from raw materials)  Component or OEM Parts (Part of a completed product)  Accessory Equipment (Tools)  Capital Equipment (Machinery) Business Market Products Chapter 1 - Introduction to Business Marketing

 Original Equipment Manufacturers (OEMs)  Users  Industrial Distributors  Government Agencies  Institutions The process may be different for different customer types. Business Market Customers Chapter 1 - Introduction to Business Marketing

 Derived Demand  The demand for a company’s products comes from (derived) the demand for their customer’s products. Business Market Demand Chapter 1 - Introduction to Business Marketing

 You can make headlamp assemblies for autos Consumers want more cars Automobile manufacturers make more cars They need more of your company’s headlamp assemblies Consumers stop buying cars Automobile manufacturers stop making cars You can’t sell headlamp assemblies Derived Demand Simplified Chapter 1 - Introduction to Business Marketing

 Creating value through a value chain  Supply chain partners working together to produce the most value for all involved.  They are only as strong as the weakest link  How do we create a successful supply chain?  What role do competitive advantages play? The Role of Marketing Chapter 1 - Introduction to Business Marketing