Business to Business Customers, Marketing and Environment MKTG 550 August 28, 2012 Dr. Dawne Martin

Learning Objectives Understand the different kinds of business customers and the differences in marketing issues associated with each Understand the different categories of business marketers within each major types and related differences in marketing issues Understand the different product types and associated marketing issues. Investigate how the environmental influences on business marketers affect choices and challenges in marketing products and services For next time:

Organizational Customers Commercial Enterprises Non-Profit and Not-for-Profit Organizations Government Units Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Commercial Enterprises Industrial Distributers Value Added Resellers Original Equipment Manufacturers (OEM) Users and End Users Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Classify the following businesses Supplier of copper wire to manufacturers Supplier of rear axle assemblies to heave truck manufacturers A distributor of private telephone exchange equip. Supplier of automated assembly equipment VARS Users Component producers Raw material producers Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Commercial Enterprises: Industrial Distributers Provide 4 types of utility: Form, Time, Place, Possession Assortment of Products from many manufacturers based on segment needs “Reduce the discrepancy of assortment” Serve smaller customers where direct representation is not efficient Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Commercial Enterprises: Value Added Resellers More than just a distributor Provides unique, complete offering from many sources Creates a value network at the user level Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Commercial Enterprises: Original Equipment Manufacturers (OEM) Purchase products and incorporate those products into their products Usually the largest-volume users of goods and services Ex: Intel is an OEM to many computer manufacturers. Goodyear is an OEM to the auto industry. Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Commercial Enterprises: Users and End Users A manufacturer that purchases goods or services for consumption or incorporation into its own products Identity of the purchased product becomes lost Ex: When Goodyear purchases steel for fabrication of steel belts for tires, Goodyear is the steel manufacturer’s end user Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Government Units: 85,000 Local, State and Federal Units What are some of the differences between marketing to a typical commercial enterprises and government agencies? More than 35% of GNP Largest consuming group in the United States Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Nonprofit and Not-for-Profit Organizations Consumer grouping consists of: Hospitals Churches Colleges Nursing Homes Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Product Types Raw Material Producers Accessory Equipment Suppliers Component Parts and Manufactured Materials Producers Accessory Equipment Suppliers Capital Goods Manufacturers Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Raw Materials Producer Product Type: Raw Materials Producer Compete in price sensitive markets Seek Value Added positions Product loses identity once incorporated into customer’s product Dominated by a few very large producers Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Component Parts and Manufactured Materials Producers Product Type: Component Parts and Manufactured Materials Producers Parts retain their same form when incorporated Retain identity when incorporated into consumer’s product Differentiated by value added EX: Seagate Disc Drives in Hewlett Packard Computers Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Capital Goods Manufacturer Product Type: Capital Goods Manufacturer Consists of large purchases with high risk to customer Many parts of customer organization involved in decision Customers expect installation, equipment and accessories Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Accessory Equipment Suppliers Product Type: Accessory Equipment Suppliers Equipment that works with another offering Accessories can be added to a bundle opportunity by a channel intermediary Produced by an independent supplier Add value by complying with industry standards for primary offering Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Business to Business Market Environment: Publics Communities of interested parties who are not direct participants in a market as customers, channel members, suppliers or competitors. Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Business to Business Market Environment: Types of Publics Financial Publics Independent Press Public Interest Groups Internal Publics All may have interests because of economic or societal effects of activities Often may be considered stakeholders in the buying center Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

How can the agenda and focus of financial publics and public interest groups create seemingly opposite goals for business-to-business marketers? Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

The Macro-Environment Demographic Environment Economic Environment Socio-cultural Environment Technological Environment Natural Environment Influence Value Creation Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

The Macro-Environment: The Competitive Environment Influences value creation, behavior of market participants Various Types: Pure Competition Monopolistic Competition Oligopolistic Competition Pure Monopoly Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Exhibit 2-3: The Multidimensional Value Network Value Activities Value Enabling Value Creating Total Offering Efforts of collaborators at different levels in the Value Network combine to create the total offering for the customer. See Chapter 1, Exhibit 4 for greater detail. Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Exhibit 2-5: The Product Life Cycle (PLC) Decline Introduction Growth Maturity Time Sales Revenue/ period Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Exhibit 2-6: The Technology Adoption Life Cycle (TALC) Technophiles Visionaries Laggards Time Sales from New Adopters/ period Pragmatists Conservatives Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

TALC and PLC Exhibit 2-7: A Hypothetical TALC and PLC for Wireless LANs Time PLC -Total Sales TALC - Sales from New Adopters/ period Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

What market characteristics make it unlikely that pragmatists will easily follow the role of model of visionaries? Relate the PLC and the chasm with particular emphasis on market factors that undergo change from introduction to rapid growth of an offering. Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

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