Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 1 MKTG Lamb, Hair, McDaniel Business to Business Marketing 7 CHAPTER

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 2 LO 1 What Is Business Marketing? The marketing of goods and services to …………. and ………………for purposes other than ……………………….. Business Marketing

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 3 Consumer vs Business Products Business Marketing cupboards oven folder and pen Teddy bear CONSUMER BUSINESS cupboards Coffee pot oven folder and pen photocopier

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 4 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: 1.Resale 2.Use in business 3.Or to produce other items  B2B internet marketing is huge (disintermediation)

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 5 Internet B2B Trends

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 6 Evolution of E-Business Initiatives Time 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

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 7 Relationship Marketing  Decrease in costs: changes in traditional relationship (long-term interaction, not just 1 transaction) –Cooperation (strategic alliances): Mutual goals (still difficult) –Info. Sharing: Provide data to enhance decisions (web – Dell) Potential for abuse (GM sends specs to others) –Keiretsu

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 8 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) –Ties with internal processes (place people in plants) –Allows better coordination

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 9 McDonald’s in Saudi Arabia

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 10

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 11

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 12

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 13 Legal Bonds  Firestone-Ford, Maytag-Hoover +

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 14 Business Market Customers Business Marketing Institutions Resellers Wholesalers Retailers Producers OEMs Governments Federal State Municipal County Unions Civic Clubs Other Churches Foundations Nonprofits

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 15 NAICS A detailed numbering system developed by the U.S., Canada, and Mexico to classify North American business establishments by their main production processes. North American Industry Classification System

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 16 Example of NAICS Hierarchy NAICS Level SectorSubsectorIndustry Group U.S. Industry NAICS Code Description ManufacturingComputer electronic product manufacturing Mfg. and reproduction of magnetic/ optical media Reproduction of software

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 17 Construction (23) Construction (23) Others… Manufacturin g (31) Manufacturin g (31) Manufacturing (31) Manufacturing (31) Apparel (315) Apparel (315) Food (311) Food (311) Others… Apparel (315) Apparel (315) Cut & Sew Apparel (3152) Cut & Sew Apparel (3152) Knitting Mills (3151) Knitting Mills (3151) Apparel Accessories (3159) Apparel Accessories (3159) Others… Cut & Sew Apparel (3152) Cut & Sew Apparel (3152) Men’s and Boy’s (31522) Men’s and Boy’s (31522) Women’s & Girls (31523) Women’s & Girls (31523) Other Cut & Sew (31529) Other Cut & Sew (31529) Others… Men’s and Boy’s (31522) Men’s and Boy’s (31522) Suits & Coats (315222) Suits & Coats (315222) Underwear & Nightwear (315221) Underwear & Nightwear (315221) Shirts (315223) Shirts (315223) Others… An NAICS Code Example (apparel industry)

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 18 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

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 19 Types of Business Products Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services Online

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 20 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 ©2010 Cengage Learning Inc. All rights reserved 21 Buying Centers LO 8 Buying Center All those persons in an organization who become involved in the purchase decision.

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 22 Roles in the Buying Center LO 8 Initiator ……………. Gatekeepers ……………. Purchaser ………….

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 23 Evaluative Criteria LO 8  Quality  Service  Price

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 24 Buying Situations LO 8 …… 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. ………….. Rebuy ………….. 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. ………… Rebuy ………… 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 ©2010 Cengage Learning Inc. All rights reserved 25 Customer Service LO 8  Divide customers into groups based on their value  Create policies that govern how service will be allocated among groups

Chapter 6Copyright ©2010 Cengage Learning Inc. All rights reserved 26 Team activity  Get into groups of 3-4  You are acting as the marketing team for Huggies diapers, a brand in head-to-head competition with Pampers.  You are considering unlocking the potential of the business market to increase your share of the disposable diapers market….  But HOW??