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1Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Business MarketingBusiness Marketing
Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 5
2Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning ObjectivesLearning Objectives
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.
3Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(continued)
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.
4Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(continued)
7. Describe the seven types of business goods and services.
8. Discuss the unique aspects of business buying behavior.
5Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe business marketing.
11
On Linehttp://www.gm.com
On Linehttp://www.gm.com
6Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Business MarketingBusiness Marketing
The marketing of goods and
services to individuals
and organizations for
purposes other than personal
consumption.
11
7Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Business ProductsBusiness Products
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
Key is Key is intended intended
useuse
11
8Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe the role of the Internet in business marketing.
22
9Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Internet Marketing Internet Marketing OpportunitiesOpportunities
Increase efficiency
Reduce costs
Improve customer service
Create one-to-one relationships
Introduce new products
Expand markets
22
On Linehttp://www.gepolymerland.com
On Linehttp://www.gepolymerland.com
10Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Benefits of Marketing on the Benefits of Marketing on the InternetInternet
5. Lower costs5. Lower costs
4. Around-the-clock ordering & customer service4. Around-the-clock ordering & customer service
3. Access to customer and product sales data3. Access to customer and product sales data
2. Greater selection of products and vendors2. Greater selection of products and vendors
1. Lower prices1. Lower prices
6. Customized products6. Customized products
22
On Linehttp://www.covisint.com
On Linehttp://www.covisint.com
11Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the role of relationship marketing and strategic alliances in business marketing.
33
12Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Strategic AllianceStrategic Alliance
A cooperative agreement
between business firms
(strategic partnership).
33
13Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
KeiretsuKeiretsu
A network of
interlocking
corporate affiliates.
33
14Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Identify the four major categories of business market customers.
44
15Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Categories of Business CustomersCategories of Business Customers
Categories Categories of Business of Business CustomersCustomers
Producers
Resellers
Governments
Institutions
44On Linehttp://www.cbd-net.comhttp://www.governmentbids.com
On Linehttp://www.cbd-net.comhttp://www.governmentbids.com
16Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the North American Industry Classification System.
55
17Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
NAICSNAICS
A detailed numbering system developed
by the U.S., Canada, and Mexico
to classify North American business
establishments
by their main production processes.North American North American
Industry Industry Classification Classification
SystemSystem
55
18Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Examples of NAICSExamples of NAICS55
19Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
NAICSNAICS
Provides common industry classification system
Valuable tool for marketers in analyzing, segmenting, and targeting markets
Data can be used to determine:
• Number, size, and geographic dispersion of firms
• Market potential / market share estimates• Sales forecasts
55
20Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the major differences between business and consumer markets.
66
21Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Business vs. Consumer Business vs. Consumer MarketsMarkets
CharacteristicCharacteristicCharacteristicCharacteristic
DemandDemand
VolumeVolume
# of Customers# of Customers
LocationLocation
DistributionDistribution
Nature of BuyNature of Buy
Buy InfluenceBuy Influence
NegotiationsNegotiations
ReciprocityReciprocity
LeasingLeasing
PromotionPromotion
Business MarketBusiness MarketBusiness MarketBusiness Market
OrganizationalOrganizational
LargerLarger
FewerFewer
ConcentratedConcentrated
More DirectMore Direct
More ProfessionalMore Professional
MultipleMultiple
More ComplexMore Complex
YesYes
GreaterGreater
Personal SellingPersonal Selling
Consumer MarketConsumer MarketConsumer MarketConsumer Market
IndividualIndividual
SmallerSmaller
ManyMany
DispersedDispersed
More IndirectMore Indirect
More PersonalMore Personal
SingleSingle
SimplerSimpler
NoNo
LesserLesser
AdvertisingAdvertising
66
22Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Demand in Business MarketsDemand in Business Markets
Demand is...Demand is...Demand is...Demand is... DescriptionDescriptionDescriptionDescription
DerivedDerivedDerivedDerived Demand for business products results from demand for consumer products
Demand for business products results from demand for consumer products
InelasticInelasticInelasticInelastic A change in price will not significantly affect the demand for product
A change in price will not significantly affect the demand for product
JointJointJointJoint Multiple items are used together in final product. Demand for one item affects allMultiple items are used together in final
product. Demand for one item affects all
FluctuatingFluctuatingFluctuatingFluctuating Demand for business products is more volatile than for consumer products
Demand for business products is more volatile than for consumer products
66
23Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Multiplier Effect Multiplier Effect (Accelerator Principle)(Accelerator Principle)
Phenomenon in which a
small increase or decrease
in consumer demand can
produce a much larger
change in demand for the
facilities and equipment
needed to make the
consumer product.
66
24Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe the seven types of business goods and services.
77
25Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Types of Business ProductsTypes of Business Products
Major EquipmentMajor Equipment
Accessory EquipmentAccessory Equipment
Raw MaterialsRaw Materials
Component PartsComponent Parts
Processed MaterialsProcessed Materials
SuppliesSupplies
Business ServicesBusiness Services
MajorMajorCategories Categories of Businessof Business
ProductsProducts
MajorMajorCategories Categories of Businessof Business
ProductsProducts
77
On Linehttp://www.pmpa.org
On Linehttp://www.pmpa.org
26Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the unique aspects of business buying behavior.
88
27Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Business Buying BehaviorBusiness Buying Behavior
Customer ServiceCustomer Service
Purchasing EthicsPurchasing Ethics
Buying SituationsBuying Situations
Evaluation CriteriaEvaluation Criteria
Buying CentersBuying Centers
Aspects of Aspects of Business Business
BuyingBuyingBehaviorBehavior
Aspects of Aspects of Business Business
BuyingBuyingBehaviorBehavior
88
28Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Buying CenterBuying Center
All those persons in
an organization who
become involved in
the purchase decision.
88
On Linehttp://www.loctite.comhttp://www.napm.org
On Linehttp://www.loctite.comhttp://www.napm.org
29Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Roles in the Buying CenterRoles in the Buying Center
InitiatorInitiatorInitiatorInitiator InfluencersInfluencersInfluencersInfluencers GatekeepersGatekeepersGatekeepersGatekeepers
DeciderDeciderDeciderDecider PurchaserPurchaserPurchaserPurchaser UsersUsersUsersUsers
88
30Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
88 Roles in the Buying CenterRoles in the Buying Center
31Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Evaluative Criteria for Evaluative Criteria for Business BuyersBusiness Buyers
88
32Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Buying SituationsBuying Situations
New BuyNew BuyNew BuyNew Buy Modified Modified RebuyRebuy
Modified Modified RebuyRebuy
StraightStraightRebuyRebuy
StraightStraightRebuyRebuy
88
33Chapter 5 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Buying SituationsBuying Situations
New BuyNew Buy
ModifiedRebuy
ModifiedRebuy
StraightRebuy
StraightRebuy
A situation requiring the purchaseof a product for the first time.
A situation requiring the purchaseof a product for the first time.
A situation where the purchaser wants some change in the original good or
service.
A situation where the purchaser wants some change in the original good or
service.
A situation in which the purchaser reorders the same goods or services
without looking for new information or investigating other suppliers.
A situation in which the purchaser reorders the same goods or services
without looking for new information or investigating other suppliers.
88
