1 Chapter 7: Business Marketing Copyright Cengage Learning 2013 All Rights Reserved Designed & Prepared by Laura Rush B-books, Ltd. Introduction to

2 Learning Outcomes Describe business marketing Describe the role of the Internet in business marketing Discuss the role of relationship marketing and strategic alliances in business marketing Identify the four major categories of business market customers LO 1 LO 2 LO 3 LO 4 Copyright Cengage Learning 2013 All Rights Reserved

3 Learning Outcomes Explain the North American Industry Classification System Explain the major differences between business and consumer markets Describe the seven types of business goods and services Discuss the unique aspects of business buying behavior LO 5 LO 6 LO 7 LO 8 Copyright Cengage Learning 2013 All Rights Reserved

4 Business Products The key is intended use. Business Products: Are used to manufacture other products Become part of another product Aid the normal operations of an organization LO 1 Copyright Cengage Learning 2013 All Rights Reserved

Online B-to-B Marketing Tools 5 Blogs Social Networking Sites Twitter Video Mobile Marketing Copyright Cengage Learning 2013 All Rights Reserved

6 Measuring Online Success 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 LO 2 Copyright Cengage Learning 2013 All Rights Reserved

7 Strategic Alliances A cooperative agreement between business firms (strategic partnerships). LO 3 Copyright Cengage Learning 2013 All Rights Reserved

8 Relationships in Other Cultures Keiretsu- A network of interlocking corporate affiliates. LO 3 Copyright Cengage Learning 2013 All Rights Reserved

9 Major Categories of Business Customers OEMS LO 4 ProducersResellersGovernmentsInstitutions Wholesalers Retailers Federal Municipal Local Schools Churches Civic Clubs Hospitals Unions Foundations Organizations Colleges Fraternal Groups Copyright Cengage Learning 2013 All Rights Reserved

10 NAICS NAICS (North American Industry Classification System)- A detailed numbering system developed by the United States, Canada, and Mexico to classify North American business establishments by their main production processes. LO 5 Copyright Cengage Learning 2013 All Rights Reserved

11 NAICS 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 LO 5 Copyright Cengage Learning 2013 All Rights Reserved

Demand in Business Markets Demand is... DescriptionDescription Derived Demand for business products results from demand for consumer products. Inelastic A change in price will not significantly affect the demand for product. Joint Multiple items are used together in final product. Demand for one item affects all. Fluctuating Demand for business products is more volatile than for consumer products.

13 Fluctuating Demand Phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product. Multiplier Effect (Accelerator Principle) - LO 6 Copyright Cengage Learning 2013 All Rights Reserved

14 Types of Business Products Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services LO 7 Copyright Cengage Learning 2013 All Rights Reserved

15 Business Buying Behavior Customer Service Business Ethics Buying Situations Evaluative Criteria Buying Centers Aspects of Business Buying Behavior Aspects of Business Buying Behavior LO 8 Copyright Cengage Learning 2013 All Rights Reserved

16 Roles in the Buying Center Initiator Influencers Gatekeepers Decider Purchaser Users LO 8 Copyright Cengage Learning 2013 All Rights Reserved

17 Evaluative Criteria 1.Quality 2.Service 3.Price LO 8 Copyright Cengage Learning 2013 All Rights Reserved

18 Buying Situations 18 New buy – A situation requiring the purchase of a product for the first time. Modified Rebuy – A situation in which the purchaser wants some change in the original good or service. Straight Rebuy – A situation in which the purchaser reorders the same goods or services without looking for new information or investigation other suppliers. LO 8 Copyright Cengage Learning 2013 All Rights Reserved

19 Customer Service Divide customers into groups based on their value Create policies that govern how service will be allocated among groups LO 8 Copyright Cengage Learning 2013 All Rights Reserved