Introduction B2B Marketing

8/10/2019 Introduction B2B Marketing

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Business Markets

Consists of all organizations thatpurchase goods and services to use in thecreation of their own goods and services.These are then oered to customers.

Business markets consists of fewer butlarger customers than consumer markets.They are involved in purchase of large

value. having complex economic,technical and nancial consideration.


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Business !arketing

"rocess of matching andcombining the capabilities of

the supplier with the desiredoutcome of the customer tocreate value for the

customer and hence forboth organizations.


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!arketing !ix

"roduct

Term product refers to core product thatcan be augmented by additional features

and options that will appeal to dierentbuyers.

#n a consumer product such as new car,buyers can add many options to car, such

as sound system or a sport suspensionpackage. Buyers have the choice tocustomize $design% their car according to

their tastes and needs.


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Consider the product when anautomobile company markets a &eet ofnew cars to a rental company.

The new product is still the cars butnow the 'uantity and assortment ofmodels become important.

The car company arranges anavailability and delivery schedule. (contract for spare part delivery become

part of deal.This would also include training of

service personnel. )epending on

capabilities of rental company the car


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#n this we dene business tobusiness product as the *Totaloerings+ that will provide a completesolution to buyers needs. This mayinclude nancing terms, delivery

options based on buyers preference.The desirability portions of oering

will vary among dierent business to

business buying organizations. -hichre'uire &exibility of marketer and themarketing organization.


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Consider again &eet oering from carcompany aimed at rental company.

The price is a negotiated price for whole &eetrather than individual prices for individuals cars.The automaker oers nancing that is morecomplicated than nancing oered to consumer.

The package may include special incentivediscounts.

The price diers between consumer

marketing and bb marketing. "rices forconsumers are xed and discounted , with somenancing provided for high cost purchases.


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"ricing for business consumers oftenvaries includes more special discounts

and allowances, and involve complexnancing.

BB pricing may involve forms suchas commissions or prot sharing.

"ricing internationally may also be

more complex, if the customercompany is multinational. "rice mayhave to be ad1usted for dierent

currencies and may have to change as


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"lace

#n consumer market place is about

getting the product to customer in rightform, at right time, with lessinconvenience associated with place of

purchase and with possession ease.2orm, time, place and possession are

economic utility and are critical part ofvalue delivered to customer.

#n consumer markets economic utilityrefers to consumer preferences in locationconvenience, re'uired purchase 'uantities

convince and ac'uisition convenience.


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#n car example the company

provide economic utility toconsumers by locating dealershipnear population centers.

)ealership are set up to fostersingle car purchase in which thecar is available or can be 'uickly

ordered.(ll activities that facilitate

purchasing car make it possible for

the buyer to start transaction and


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3conomic utility is an important part ofBB markets.

#n example , the car manufactureroers cars in appropriate 'uantities inappropriate time interval. The right carsare shipped to right location.

0pare parts are made available inappropriate 'uantities as well. They alsoare shipped to right location at right time.

Businesses design their marketingchannels to provide maximum value totheir customers while minimizing costs.

!a1or dierence lies in the length and


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The 'uantities purchased inBB marketing are larger thanconsumer purchases withtiming of delivery critical

factor.This leads to direct

relationship betweenmanufacturer and customerand eliminating channel

intermediaries.


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"romotion

BB marketing places dierentemphasis on the parts of promotionmix. $advertising, 0ales promotion,

personal selling and public relations%.#n BB marketing personal selling is

most used and eective type of

promotion. #t allows rapid andaccurate feed back to marketers.


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The carmaker in our example

may have a sales team thatmanages account with the carerental company.

The sales team may provideinformation and personnel serviceto executives and employees of

the car rental company.


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BB versus Consumer !arketingMarket Structure

B2B 4eographically

concentrated

5elatively fewerbuyers

Channels

0horter, moredirect.

Consumer 4eographically

dispersed.

!ass markets,many buyers

Channels #ndirect, multiple

relationships.


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"roducts

Can betechnicallycomplex.

0ervice, deliveryand availabilityvery important.

"urchased forother thanpersonal use.

0tandardized.

0ervice,

delivery andavailability onlysomewhat

important. "urchased for

personal use.


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Buyer Behavior "rofessionally

trained purchasingpersonnel

2unctional

involvement atmany levels.

Promotion

3mphasis onpersonal selling.

Price

Competitive

bidding or result of

#ndividualpurchasing.

2amily involvement

eect.Promotion

3mphasis on

marketing.Price

"redetermined

price


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!arketing Concept

To be successful the rm shouldbe9

!arket sensitive

/nderstand customer needs

!eet needs in a coordinated waythat provide value to customer.

)o so in a way that meetorganizational goals.


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Consumer Demand

:uantity of goods and services desiredto be bought, given market condition.

Derived Demand

)emand experienced by the chain ofsuppliers and producers that contributeto the creation of total oering.

-ithout initial consumer demand, thereis no demand on the chain of suppliers.


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Example

)emand for nylon bers byconsumers does not exit.

7ylon is however demanded to spin

yarn b8c yarn is demanded to weavefabric b8c fabric is demanded to makeclothes.

(ll these demands are *)erived)emand.+

( result of ultimate *Consumer)emand+ for nylon clothing items.


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5elationship !arketing3!C markets high;end data storage systems

implement strategy during s of buildingdirect relationship with customers.

-hile #B! was reducing its eorts tomaintain relationships with customers.

3!C was focusing on working with customersto solve their problems.

-ith this understanding 3!C launchedproducts that made data storage and

management faster, easier and more eective.#n


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@(6/3 A @(6/3 C(#7

@alue is the sum of all thebenets that customer receives

in buying and using a productless than the cost involved.

@alue Chain is the chain ofactivities that creates somethingof value for the targeted

customers.


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)irect @ersus 0upportive(ctivities

)irect activities contribute directly tooering.

0upportive activities make it possible to

perform direct activities.

4oal is to combine elements to createvalue as perceived by target market.

)irect activities include #nbound Aoutbound logistics, perations,marketing and sales, customer service.

0 ti ti iti i l d


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0upportive activities includeinfrastructure, human resources,procurement and technology and

technology development.3xample is marketing creates brand

image , which is valuable to customers b8c itprovides assurance of 'uality andupgradability. !arketing then a directactivity.

uman resource management denes

positions and recruits, hires, trains, andmotivate people who are necessary to domarketing and other activities. Thereforehuman resource management is a

supportive activity.


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Trends A Changes in Business

!arketing

BB marketing environment ischanging rapidly and adaptation to thischange re'uire some new ways of

thinking and acting.

Hyper competition

-e are seeing many smart, fast

competitors across many industries. 7ewcompanies that emerge 'uickly almostovernight challenge established

companies. )ue to this rapidly increasing

This changing competitive landscape


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This changing competitive landscapemeans the business market must adaptcompetitive analysis techni'ues and

competitive actions, focused on addressingcompetition from specic competitors toaccommodate this high level of uncertainty.

Formation of Partner et!ork

"roducts, systems have become so complexand interrelated that no company canprovide a *whole product+ by itself.

0oftware providers needs to partner withhardware vendors, and system integratorsto provide enterprise level softwaresystems.

$35" systems%

0i il t hi f


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0imilar partnership occurs for newproduct development and lling productlines. 6arge companies recognizing that

often other companies have crucial piecesof technology.

The same kind of partner networks are

occurring in industries as construction,energy production and distribution,consulting and employment services.

"doption of #$ and #nternet#T oers enhanced communication,enhanced customer service, and reduced

costs. The concept of total oering and

0 l Ch i ! t


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0upply Chain !anagement0upply chain extends from raw material and

component suppliers, through manufacturer,and through distribution channel to nalbuyer.

Companies have 3lectronic data #nterchange

$3)#% is use to manage supply chain. #t is alsoused and useful as a facilitator of supplierand buyer relation ships.

3)# is a technology for exchanginginformation concerning ordering of goods. #tconsists of order and fulllment informationas well as payments through electronic funds

transfer.

Ti C i


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Time Compression!eans an increase in speed of doingbusiness.

ow organizations reacts to this has bothshort term and long term eects on theirperformance and survivability.

-ith hyper competition competitive pressurescause companies to get new products fasterand replace these products with succeedinggenerations of products more rapidly.

*ow are you dealing with compressionD+*-5E (5)35 (7) 2(0T35+

Introduction B2B Marketing

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