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Difference between Business and

Consumer Marketing

 Non-personal relationshipStable interpersonal relationship between

 buyers and sellers

Less technical expertiseTechnical expertise

Decisions are mostly made on

 physiological/social/psychological needsPurchase decisions are made on

rational/performance basis

Involvement of family membersInvolvement of various functional areas

in both buyer and supplier firmsBuyer behaviour 

Service, timely delivery and

availability somewhat important

Service, timely delivery and availability

very importantService characteristics

Customised

StandardisedTechnical complexityProduct characteristics

Mass marketsRelatively few buyers

Geographically disbursedGeographically concentratedMarket characteristics

Consumer MarketsBusiness Markets Areas

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Difference between Business and

Consumer Marketing

List price or Maximum Retail

Price (MRP)

Competitive bidding and negotiated pricePrice characteristics

Emphasis on advertisingEmphasis on personal sellingPromotional

characteristics

Multiple layers of intermediariesFewer intermediaries and middlemen

IndirectMore directChannel characteristics

Consumer MarketsBusiness Markets Areas

List price for standard products

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Business Markets: Nature of Demand

Demand is derived from demand forconsumer goods

Joint demand (pump-motor)

Demand elasticity

Inelastic for most industrial goods forindustry as a whole

Elastic for individual suppliers of a particularindustry

Cross elasticities exist for same application

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Types of Industrial Customers

Commercial enterprises

Manufacturing

Non-manufacturing

Institutional customers

Public/private

Hospitals, educational institutions etc

Government customers

PSUs

Govt Departments Electricity, Irrigation etc

Direct end-users (spares, replacements)

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Classification of Industrial Goods &

Services

Raw materials, components and sub-assemblies

Capital items

Plant & building

Heavy equipment (machinery)

Light equipment (hand tools)

Consumables

Operating consumables

Maintenance consumables

Services: Legal, advertising, courier etc

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B2B Marketing

 Value: Monetary worth provided tocustomer firm

Marketing process in B2B situation

Business across borders

Business networks and workingrelationship

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 Value in Business Markets Price in monetary terms (per unit, per hour,

per liter)

Net benefits to customer in terms of economic,technical, service and social benefits

One competitive alternative to businesscustomer to make the product itself 

Business markets realisation that saving oncost of purchased goods & services improvetheir profitability

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B2B Marketing Process

PDM: Product Development Management 

Understanding customer requirements andpreferences

 Anticipating their changes in requirements

Responding with solutions

Preferences in what way customers arewilling to pay

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B2B Marketing Process

SCM: Acquisition of inputs

Efficiency and effectiveness with which theinputs are converted into customer solutions

CRM:

Identifying customers Creating customer knowledge

Building customer relationships

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B2B Marketing Process Product:

Flexible solutions with alternatives / options Specialise in few segments

Pricing: Evaluate the worth the price offers to customers, better than

other alternatives in the market  Immediate and in the long-run

Promotion: More focused communication Reinforce customer value proposition

Distribution: Customer-driven channels to support CRM process

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B2B Business Across Border Influencing factors:

Culture & language

Political & economic Legal

Business impact: Negotiation Understanding customer decision making process Contract agreement  Dispute resolution Currency exchange & payment risk

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B2B Business Networks

Team with complementary skills Technical or functional expertise

Problem-solving & decision making skills

Communication and interpersonal skills

Collaborative relationship agreements

Mutual advantage Time horizon

Dispute resolution mechanism

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B2B Business Networks

Business network Actors:

Buyers

Users

Consultants

Project teams

Distributors/Agents

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Sectors - Industry Automobile

House hold goods: Refrigerator, T V etc

Consumer goods

Electrical

Electronics Engineering (Machines)

Medical equipment 

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Sectors - Services Banking and Insurance

IT

Hospitality and Tourism

Health

Transportation

Railways

Education

Entertainment 

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GDP Components 2009-10

Rs in crores

Source:R

BI

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Production: Select Industry

2009-10

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Production: Select Industry

2009-10