7

Business Marketing
Professor Close

Business Marketing

Organization market is larger than consumer

market (B2B marketing/industrial marketing)
Easy to define need: do not have the less
rational needs of consumers (fewer
customers)
Organizations purchase for:
1. Resale
2. Use in business
3. Or to produce other items

B2B internet marketing is huge

(disintermediation)

Internet B2B Trends

Relationship Marketing
Decrease in costs: changes in traditional
relationship (long-term interaction, not just
1 transaction)
Cooperation (strategic alliances):
Mutual goals (still difficult; why Japanese
experience during troubled times)

Info. Sharing:
Provide data to enhance decisions (web Dell)
Potential for abuse (GM sends specs to others)

Keiretsu

Relationship Commitment
Adaptations:
Make changes for one customer (NUMMI;
McDonalds & China potatoes)
May hedge bets with multiple suppliers

Operational linkages (outsourcing: train

other jobs; IBM)
Ties with internal processes (place people in
plants)
Allows better coordination (Mark @ VSU,
windshields, Rubbermaid)

McDonalds in Saudi Arabia

Legal Bonds
Firestone-Ford, Maytag-Hoover, B2C, over
$150, 2 round trip tickets 200,000)
Formalized? But locked in
Hand shake allows flexibility (other risks)

Business Customers

Producers
Resellers
Governments
Institutions

NAICS
North American Industry Classification
System
Utility maximization:
Personal selling: customized, large orders
Purchasing specs: precise description of what
firm wants

Demand: derived, inelastic, or joint

More volume
B2B = geographically concentrated

Buying Center
Roles auto parts
Users: work with product, often generate
specs (line workers)
Influencers: can modify outcome; dev. Specs,
evaluate alternatives (engineers)
Buyers: complete transaction, negotiate
(purchasing manager)
Deciders: select or approve (upper/middle
management; may be same as buyer)
Gatekeepers: control info. Within buying
center (secretary)

Buying Situations (1)

Buying process: 3 types (goes with

individual as well)
1. Straight rebuy

Small, recurring items like office supplies

Little buyers time, little info needed
Reminder ads, automate process
Purchasing manager and no one else

Buying Situations (2)

2. Modified rebuy (contract with dining hall ends)

Some review
Dissatisfy: look for opportunity
Comparison ads: your product
Your client: protect, attention to changing needs

3. New task buying (plant overseas)

Unique situation
Lots of information, effort, and time
Develop product and vendor specs
Many influences

Dell Commercial

Summary

Types of business products, negotiations

B2B and the internet
Buying situations
Multiple influences roles
Relationship marketing
NAICS
Buying center
Any questions?