Insert Chapter Picture Here
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
1
Designed by Eric Brengle B-books, Ltd.
CHAPTER
6
Business Marketing
Prepared byDeborah Baker
Texas Christian University
Introduction to MarketingMcDaniel, Lamb, Hair
9
2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2
Learning Outcomes
Describe business marketing
Describe the role of the Internet in business marketing
Discuss the role of relationship marketing and strategic alliances in business marketing
Identify the four major categories of business market customers
LOI
LO2
LO3
LO4
3Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2
Learning Outcomes
Explain the North American Industry Classification System
Explain the major differences between business and consumer markets
Describe the seven types of business goods and services
Discuss the unique aspects of business buying behavior
LO5
LO6
LO7
LO8
4Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Describe business marketing
What Is Business Marketing?LOI
5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
BusinessMarketing
BusinessMarketing
The marketing of goods and
services to individuals and
organizations for purposes
other than personal
consumption.
LOI What Is Business Marketing?
6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6LOI
Business 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
Business Products
The key is intended use.
7Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
REVIEW LEARNING OUTCOMEBusiness Marketing
LOI
cupboards
oven
folderand pen
Teddy bear
CONSUMER BUSINESScupboards
Coffee pot
oven
folderand pen
photocopier
8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Describe the role of the Internet in
business marketing
Business Marketing on the InternetLO2
9Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO2
StickinessStickiness
A measure of a Web site’s
effectiveness; calculated by
multiplying the frequency of
visits times the duration of a
visit times the number of pages
viewed during each visit.
Measuring Online Success
Stickiness = Frequency x Duration x Site Reach
10Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO2Evolution of E-Business Initiatives
• Revenue generation• Aggressive
disintermediation initiatives
• Basic marketingcommunication strategies
• Reduce costs• Build channel
partnerships and trust• Customer-focused
technology and systems• Brand building and
development• Integrate online and
traditional media
Past initiatives Present initiatives
Time
11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
REVIEW LEARNING OUTCOMEThe Internet in Business Marketing
LO2
THEN
NOW Reduce costsBuild partnerships and alliancesBuild and support brandingDevelop customer-focused technology and systemsIntegrate online and traditional media
Revenue GenerationBasic Marketing Communication
Business Internet Uses
and
12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Discuss the role of relationship marketing and
strategic alliances inbusiness marketing
Relationship Marketing andStrategic AlliancesLO3
13Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO3
StrategicAlliance
StrategicAlliance
Strategic Alliances
A cooperative agreement
between business firms
(strategic partnership).
14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO3
KeiretsuKeiretsu
Relationships in Other Cultures
A network of interlocking
corporate affiliates.
15Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
REVIEW LEARNING OUTCOMERelationship Marketing and Strategic Alliances
LO3
Supplier(like Intel)
SupplierSupplier
Company(like Dell)
Company 1(like Starbucks)
Company 2(like Jim Beam)
Company(like UPS)
Customer/Distributor(like Ford)
16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Identify the four majorcategories of
business market customers
Major Categories of Business CustomersLO4
17Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO4Major Categories of Business
Customers
Producers
Resellers
Governments
Institutions
OEMs
WholesalersRetailers
FederalMunicipalLocal
Schools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs FoundationsNonbusiness organizations
18Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO4
OriginalEquipment
Manufacturers
OriginalEquipment
Manufacturers
Producers
OEMs.
Individuals and organizations
that buy business goods and
incorporate them into the
products that they produce for
eventual sale to other producers
or to consumers.
19Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
REVIEW LEARNING OUTCOMEBusiness Market Customers
LO4
Business MarketingBusiness Marketing
InstitutionsInstitutionsResellersResellers
Wholesalers
Retailers
ProducersProducers
OEMs
GovernmentsGovernments
Federal
State
Municipal
County
Unions
CivicClubs
Other
Churches
Foundations
Nonprofits
20Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Explain the North American Industry
Classification System
North American Industry Classification SystemLO5
21Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
NAICSNAICS
LO5 NAICS
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 Industry
Classification System
22Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6 LO5
NAICS
Level
Sector Subsector Industry Group
U.S.
Industry
NAICS
Code
31-33 334 3346 334611
Description Manufacturing Computer
electronic
product manufacturing
Mfg. and reproduction of magnetic/optical media
Reproduction of software
Example of NAICS Hierarchy
23Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6 LO5
Provides a 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– New customer identification
NAICS
24Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Explain the major differences between business and
consumer markets
Business versus Consumer MarketsLO6
25Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 6
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
LO6 Business versus Consumer Markets
26Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO6
Demand is...Demand is...Demand is...Demand is... DescriptionDescriptionDescriptionDescription
DerivedDerived Demand for business products results from demand for consumer products.Demand for business products results from demand for consumer products.
InelasticInelastic A change in price will not significantly affect the demand for product.A change in price will not significantly affect the demand for product.
JointJointMultiple items are used together in final product. Demand for one item affects all.
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.Demand for business products is more volatile than for consumer products.
Demand in Business Markets
27Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Multiplier EffectMultiplier Effect
(Accelerator Principle)
(Accelerator Principle)
LO6 Fluctuating Demand
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.
28Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Describe the seven types of business goods
and services
Types of Business ProductsLO7
29Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO7
Major EquipmentMajor Equipment
Accessory EquipmentAccessory Equipment
Raw MaterialsRaw Materials
Component PartsComponent Parts
Processed MaterialsProcessed Materials
SuppliesSupplies
Business ServicesBusiness Services
Types of Business Products
Online
http://www.sysco.com
30Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
REVIEW LEARNING OUTCOMETypes of Business Goods and Services
LO7
Aluminum ore:raw material
Extruded metal:processed material
Propeller blade:component part
Extruding machine:
major equipmentTool cart:accessory equipment
Uniforms:contracted
service
Paper:supply
31Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Discuss the unique aspects of business buying behavior
Business Buying BehaviorLO8
32Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6 LO8
Customer ServiceCustomer Service
Business EthicsBusiness Ethics
Buying SituationsBuying Situations
Evaluative CriteriaEvaluative Criteria
Buying CentersBuying Centers
Aspects of Business
BuyingBehavior
Aspects of Business
BuyingBehavior
Business Buying Behavior
33Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Buying CenterBuying Center
LO8 Buying Centers
All those persons in an
organization who become
involved in the purchase
decision.
34Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO8
InitiatorInitiator InfluencersInfluencers GatekeepersGatekeepers
DeciderDecider PurchaserPurchaser UsersUsers
Roles in the Buying Center
Online
http://www.loctite.com
35Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO8 Evaluative Criteria
1. Quality
2. Service
3. Price
36Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
LO8
New BuyNew BuyA situation requiring the purchase of a product for the first time.
A situation requiring the purchase of a product for the first time.
ModifiedRebuy
ModifiedRebuy
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.
StraightRebuy
StraightRebuy
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.
Buying Situations
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Biz Flix
Bow
fin
ger
37
LO8
38Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
Customer ServiceLO8
Divide customers into groups based on their value
Create policies that govern how service will be allocated among groups
39Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 6
REVIEW LEARNING OUTCOMEBusiness Buying Behavior
LO8
Customer service
InitiatorInfluencerDecider GatekeeperPurchaserUser
Buying Center
Quality Service Price
EvaluativeCriteria
Buying Situations
New buyStraight rebuyModified rebuy