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Global Marketing Management
Global Product DecisionsB2B
MKTG 3231-001Fall 2013
Mrs. Tamara L. Cohen
Class # 20
Global Product Decisions
B2BReading for this class: Course Pack #8
B2B is ‘big time’
The US government is the biggest single purchaser of products & services in the country, spending > $300 billion annually.
B2B accounts for > half business activity in developed countries¹
More marketing majors begin their careers in B2B than in consumer marketing.
B 2 B : Business Business
KEY TERMS
Industrial products Derived demand ISO 9000 certification Relationship marketing Content marketing
B 2 B : Business Business
KEY CONCEPTS
Effect of technology on demand Trade shows & relationship marketing
B2B interaction
s
DEMAND is different in
Global B2B Markets1. Demand in industrial markets is more
volatile.
2. Stages of industrial & economic development affect demand for industrial products.
3. Level of technology of products & services make sales more appropriate in some countries than others.
1. VOLATILITY of Industrial Demand
• Cyclical swings in demand increased – professional buyers tend
to act ‘in concert’– derived demand accelerates changes in markets
• Minor changes in consumer demand mean major changes in related industrial demande.g. Boeing
• worldwide demand for travel services related to demand for new airplanes
• commercial aircraft industry one of most volatile
2. Degree of INDUSTRIALIZATION
5-stage model of economic development:
1. Traditional society - most important B2B demand associated with extraction of natural resources; e.g. many countries in Africa & Middle East
2. Preconditions for takeoff - manufacturing is starting. Primary needs typically related to infrastructure development, like construction, telecommunications, power generation equipment; e.g. Vietnam
3. Takeoff - manufacturing of consumer goods has begun. B2B needs focus on equipment & supplies to support manufacturing; e.g. Russian & Eastern European countries
4. Drive to maturity - industrialized economies. Focus on low-cost manufacturing of various consumer goods & some industrial goods; need all categories of B2B goods & services; e.g. Korea; Czech Republic
5. Age of mass consumption - mostly service economies. High-tech products & services sought mostly from other stage 5 suppliers + consumer products from stage 3 & 4 countries; e.g. Germany; Japan
1. Traditional society
2. Preconditions for takeoff
3. Takeoff
4. Drive to maturity
5. Age of mass consumption
3. TECHNOLOGY & Market Demand
• Trends spurring demand for technologically advanced products– expanding economic & industrial growth in Asia– disintegration of Soviet empire– privatization of government-owned industries worldwide
• Companies with competitive edge will be those whose products are:– technologically advanced– highest quality– accompanied by world-class service
B2B Promotional Activity
• Internet/Electronic Media• Trade Shows/Events • Print Advertising • Promotion/Market Support • Publicity/Public Relations • Dealer/Distributor Materials• Market Research • Telemarketing • Directories
Interactive marketing is the future for B2B marketing
Social Media is up-and-
coming
“Content marketing (custom media) is the creation and distribution of educational and/or compelling content in multiple formats to attract and/or retain customers.”
e.g. white papers
case studies
videos
articles
Content Marketing
Trade Shows:Crucial Part of B2B Marketing
• Trade shows– manufacturer can exhibit & demonstrate products to potential users– manufacturers can view competitors’ products– opportunity to create sales & establish relationships with agents,
distributors, franchisees & suppliers
• Online trade shows– useful in difficult economic / political circumstances– poor substitute for live trade shows
• Secondary marketing methods - print advertising, catalogs, web sites, direct mail
• Total annual media budget on trade events:Europeans 22% Americans 5%
Trade shows
Relationship Marketing
in B2B Contexts• Not a matter of selling right product 1st time
– instead sell continuously changed product to keep it right over time
• Objective of relationship marketing – make relationship an important attribute of
transaction + differentiate from competitors• Use Internet to facilitate relationship building
and maintenance
Quality is Defined by the Buyer
• lack of universal standards• country-specific standards• metric system• ISO 9000 Certification =
International Standard of Quality ISO 9001 certification
of a fish wholesaler in
Tsukiji
• Customer – initiate inquiry
• Sales engineer – initial customer contact
• Application engineer – find best product match
• Engineering & control systems – design
• Project manager – manage project & liaise
• Manufacturing technicians – produce, assemble, test
• Customer services – installation & start-up
• Suppliers – provide materials & components
• Service engineer – after-sales service & maintenance
Global Project Team
B2B SERVICE
S
Support Services
• Deliveries • Warranty• Spare parts• Repair and maintenance• Installation• Instructions• Other related services
Marketing Consumer Services Globally
• Consumer services characteristics– intangibility– inseparability– heterogeneity– perishability
• Service can be marketed – as industrial (B B) – as consumer service (B C)
Business Services• For many industrial products, revenues from
associates services > revenues from products– cell phones– printers
• Leasing capital equipment• Services not associated with products
– Boeing at-sea-satellite-launch services– Ukrainian cargo company rents space on giant
jets– professional services (advertising, banking,
healthcare, etc.)
After-Sale Services• Installation• Training• Spare and replacement parts
– delivery time– cost of parts
• Service personnel• Almost always more profitable than actual
sale of machinery / product • Crucial in building strong customer loyalty
Services Opportunities
in Global Markets• Tourism – int’l tourism largest US services export
• Transportation• Financial services• Education – 2007: >600,000 foreign students, tuition $11 billion
• Communications – phone services
• Entertainment – sporting events sold all over the world
• Information – Internet, etc.
• Health care – foreigners come here; US facilities abroad too
Next class: Global Product Decisions B2C
Preparation: Read Course Pack #9