1. Ch. 1: Introduction to Business-to-Business Marketing http://osmangok@yasar.edu.tr
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2. B2B? Business to Business Marketing= B2B
Covers transactions between business organizations
Both sides are companies or organizatons
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3. B2B Transactions
A machinery company sells machine to a chemical company
A chemical company sells chemical raw materials to a food company
A petrolium company sells raw petrolium materails to a plastic company
A microchip company sells microchips to a computer manufacturer company
A packaging company sells packages to a laundry detergent producer
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5. B2B Services
A logistics company sells logistics services to a construction company
An advertising agency creates advertising campaign for a food company
A consultancy company provides management consultancy for an energy company
A hotel chain makes an agreement with a textile company for their sales-persons business trips
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6. What is Business-to-Business Marketing?
marketing of products to businesses or other organizations for use in production of goods, for use in general business operations (such as office supplies), or for resale to other consumers, such as a wholesaler selling to a retailer.
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7. The Marketing Mix Place Price Product Promotion Marketing Mix
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8. Marketing Mix: Product
The total offering is created by a partnership between the buying organization and the marketing organization.
The process creates an augmented product that is specific to the buying unit’s needs and maximizes the value creation capabilities of the marketer.
Core Product
+ Financing Terms
+ Delivery Options
= “Total Offering”
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9. Marketing Mix: Price
The mutually agreed-upon amount that satisfies both sides in an exchange.
Often varies from fixed price, with more special discounts and allowances (in comparison to consumer markets.)
May involve things other than a one-time price payment (such as commissions.)
Price is the measure of value exchanged and is determined by the market—not by costs.
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10. Marketing Mix: Place
Place is about getting the product to the customer in order to maximize economic utility.
Economic Utility
Form
Time
Place
Possession
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11. Marketing Mix: Promotion
Business-to-business marketing requires a different emphasis on different parts of the promotional mix
Consumer V.S Business to Business
Emphasis is frequently on advertising.
Communication with customers is often a monologue.
Relationship is often brief.
Emphasis is frequently on personal selling.
Communication with customers should be a dialogue.
Relationship is often long-lasting.
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12. Market Structure Business to Business Consumer
Geographically Dispersed
Mass Market; Many Buyers
Relationships are weak
Geographically Concentrated
Relatively Few Buyers
Relationships are usually strong
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13. Products Business to Business Consumer Can be technically complex
Standardized
Service, delivery and availability only somewhat important
Purchased for personal use
Can be technically complex
Customized to user preference
Service, delivery and availability very important
Purchased for other than personal use
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14. Buyer Behavior Business to Business Consumer
Individual purchasing
Family involvement, influence
Social or psychological motives predominate
Professionally trained purchasing personnel
Functional involvement at many levels
Task motives predominate
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15. Buyer/Seller Relationship Expectations
Consumer
Business to Business
Less technical expertise
Nonpersonal relationships
Little personal information exchanged
Changing, short-term relationships encourage switching
Technical expertise is an asset
Interpersonal relationships between buyers and sellers
Significant personal info exchanged
Stable, long-term relationships encourage loyalty
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16. Channels Business to Business Consumer
Indirect, multiple relationships
Little or no customer supply chain involvement
Shorter, more direct
Organization involvement as part of supply chain
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17. Promotion Business to Business Consumer
Emphasis on advertising, monologue
Companies compete for visibility and awareness of consumer market
Emphasis on personal selling, dialogue
Most communications invisible to the consumer
Consumer is seldom aware of B2B brands and companies
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18. Price Business to Business Consumer
Usually list or predetermined prices
Complex purchasing process or competitive bidding, depending on purchase type
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19. Demand Business to Business Consumer Derived Direct
Elastic
Less volatile
Derived
Inelastic (short run)
Volatile (leveraged)
Discontinuous
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20. Concept of Derived Demand
Nothing happens unless consumer buys something
Acceleration Principle: “Bullwhip Effect”
1. Suppliers forecast production on existing order rates.
2. If consumer demand drops, the order rate also drops.
3. Supply chain members are then likely to overcompensate the difference between the old and new forecasts, because:
Inventory levels can decline to fit new order rate
Customers change orders frequently
Minimum order quantities may exist
Trade promotions may influence buying patterns
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21. Total Offering The puzzle of the B2B Customer needs “Total Offering”
Product
Service
Image
Availability
Quantity
Evaluated Price
Timely delivery
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22. Trends and Changes in Business Marketing
Hyper-competition
Formation of partner networks
Adoption of technology and the internet
Supply Chain Management
Time Compression
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