1. Chapter 5 Ver 2e1 Chapter 5 ©2000 South-Western College Publishing Business Marketing Prepared by Deborah Baker Texas Christian University

2. Chapter 5 Ver 2e2 1.Describe business marketing. 2.Describe the role of the Internet in business marketing. 3.Discuss the role of relationship marketing and strategic alliances in business marketing. (continued) Chapter 5 Objectives ©2000 South-Western College Publishing

3. Chapter 5 Ver 2e3 4.Identify the four major categories of business market customers. 5.Explain the North American Industry Classification System. 6.Explain the major differences between business and consumer markets. (continued) Chapter 5 Objectives ©2000 South-Western College Publishing

4. Chapter 5 Ver 2e4 7.Describe the seven types of business goods and services. 8.Discuss the unique aspects of business buying behavior. Chapter 5 Objectives ©2000 South-Western College Publishing

5. Chapter 5 Ver 2e5 What is Business Marketing?  Are used to manufacture other products  Become part of another product  Aid the normal operations of an organization  Are acquired for resale without change in form Business Products Key is intended use ©2000 South-Western College Publishing

6. Chapter 5 Ver 2e6 Forms of Strategic Alliances Licensing Joint Ventures R & D Consortia Partnerships Strategic Alliances ©2000 South-Western College Publishing

7. Chapter 5 Ver 2e7 Strategic Alliances Benefits of Strategic Alliances  Access to markets or to technology  Economies of scale by combining activities  Faster entry of new products to market  Sharing of risk ©2000 South-Western College Publishing

8. Chapter 5 Ver 2e8 Categories of Business Customers Producers Resellers Governments Institutions ©2000 South-Western College Publishing

9. Chapter 5 Ver 2e9 NAICS Codes  Provides common industry classification system  Valuable tool for marketers in analyzing, segmenting, and targeting markets  Data can be used to determine:  Number of establishments in industry  Sales volumes  Number of employees  Growth and geographic trends  Declining industries ©2000 South-Western College Publishing

10. Chapter 5 Ver 2e10 Business vs. Consumer Markets CharacteristicCharacteristic Demand Volume # of Customers Location Distribution Nature of Buy Buying Influence Negotiations Reciprocity Leasing Promotion Business Market Organizational Larger Fewer Concentrated More Direct More Professional Multiple More Complex Yes Greater Personal Selling Consumer Market Individual Smaller Many Dispersed More Indirect More Personal Single Simpler No Lesser Advertising ©2000 South-Western College Publishing

11. Chapter 5 Ver 2e11 Business vs. Consumer Markets Demand in Business Markets Demand is... DescriptionDescription DerivedDerived InelasticInelastic Demand for business products results from demand for consumer products A change in price will not significantly affect the demand for product JointJoint Multiple items are used together in final product. Demand for one item affects all FluctuatingFluctuating Demand for business products is more volatile than for consumer products ©2000 South-Western College Publishing

12. Chapter 5 Ver 2e12 Types of Business Products Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services Major Categories of Business ProductsMajor Products ©2000 South-Western College Publishing

13. Chapter 5 Ver 2e13 Business Buying Behavior Customer Service Purchasing Ethics Buying Situations Evaluation Criteria Buying Centers Aspects of Business Buying Behavior Behavior ©2000 South-Western College Publishing

14. Chapter 5 Ver 2e14 Roles in the Buying Center DeciderDeciderInitiatorInitiatorInfluencersInfluencersGatekeepersGatekeepers PurchaserPurchaserUsersUsers ©2000 South-Western College Publishing

15. Chapter 5 Ver 2e15 Evaluative Criteria for Business Buyers ©2000 South-Western College Publishing

16. Chapter 5 Ver 2e16 ©2000 South-Western College Publishing Buying Situations New Buy Product is purchased for the first time Modified Rebuy Changes are desired in the original product Modified Rebuy Changes are desired in the original product Straight Rebuy Original product is reordered Straight Rebuy Original product is reordered

17. Chapter 5 Ver 2e17 Purchasing Ethics  Gift must be of nominal value  Social amenities must be appropriate and limited  Discounts must be made generally available  Cash, gift certificates, food/alcohol gifts prohibited  Money cannot be borrowed Gifts from Suppliers-- Ford Motor Company’s Policy ©2000 South-Western College Publishing

18. Chapter 5 Ver 2e18 Online Services CD-ROMs World Wide Web Customer Service is enhanced through technology Customer Service ©2000 South-Western College Publishing