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Chapter 14 Products and Services for Businesses

International Marketing 15 th edition . Chapter 14 Products and Services for Businesses. Philip R. Cateora , Mary C. Gilly , and John L. Graham. Introduction. Issues of standardization versus adaptation Less relevance to marketing industrial goods than consumer goods

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Chapter 14 Products and Services for Businesses

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  1. International Marketing 15th edition Chapter 14 Products and Services for Businesses Philip R. Cateora, Mary C. Gilly, and John L. Graham

  2. Introduction • Issues of standardization versus adaptation • Less relevance to marketing industrial goods than consumer goods • Factors accounting for greater market similarities in customers of industrial goods versus consumer goods • The inherent nature of the product (industrial products and services are used in the process of creating other goods and services) • The motive or intent for the user differs (industrial consumers are seeking profit, whereas the ultimate consumer is seeking satisfaction) Roy Philip

  3. Major Categories U.S. Exports Exhibit 14.1 Roy Philip

  4. Demand in Global Business-to-Business Markets • Three factors affect the demand in industrial markets differently than in consumer markets. They are: • Volatility of industrial demand (demand in industrial markets is by nature more volatile) • Stages of economic development (stages of industrial and economic development affect demand for industrial products) • Technology and market demand (the level of technology of products and services make their sales more appropriate for some countries than others) Roy Philip

  5. The Volatility of Industrial Demand • Cyclical swings in demand • Professional buyers tend to act in concert • Derived demand accelerates changes in markets • Derived demand can be defined as demand dependent on another source • Minor changes in consumer demand mean major changes in related industrial demand • Boeing • Worldwide demand for travel services related to demand for new airplanes • Commercial aircraft industry one of the most volatile Roy Philip

  6. Quality and Global Standards • Perception of quality rests solely with the customer • Level of technology reflected in the product • Compliance with standards that reflect customer needs • Support services and follow-through • Price relative to competitive products • Quality standards vary with level of country’s industrialization Roy Philip

  7. ISO 9000 Certification – An International Standard of Quality(1 of 2) • Positively affects the performance and stock prices of firms • Certification of the existence of a quality control system a company has in place to ensure it can meet published quality standards • Describes three quality system models • Defines quality concepts • Gives guidelines for using international standards in quality systems • Generally voluntary Roy Philip

  8. ISO 9000 Certification – An International Standard of Quality(2 of 2) • EU Product Liability Directive • Now a competitive marketing tool in Europe and around the world • The ACSI approach Roy Philip

  9. Business Services • For many industrial products the revenues from associates services exceed the revenues from the products • Cellular phones • Printers • Leasing capital equipment • Services not associated with products • Boeing at-sea-satellite-launch services • Ukrainian cargo company space rental on giant jets • Professional services (advertising, banking, healthcare, etc.) Roy Philip

  10. After-Sale Services • Installation • Training • Spare and replacement parts • Delivery time • Cost of parts • Service personnel • Almost always more profitable than the actual sale of the machinery or product • Crucial in building strong customer loyalty Roy Philip

  11. Other Business Services • Client followers • Mode of entry • Licensing • Franchising • Direct investment • Protectionism • Restrictions on cross-border data flows Roy Philip

  12. Trade Shows: A Crucial Part of Business-to-Business Marketing (1 of 4) • Secondary methods for marketing: • Advertising in print media • Catalogs • Web sites • Direct mail • Trade shows have become the primary and most important vehicle for doing business in many foreign countries Roy Philip

  13. Trade Shows: A Crucial Part of Business-to-Business Marketing (2 of 4) • Total annual media budget spent on trade events: • Europeans – 22 percent • Americans – 5 percent Roy Philip

  14. Trade Shows: A Crucial Part of Business-to-Business Marketing (3 of 4) • Trade shows • Provide the facilities for a manufacturer to exhibit and demonstrate products to potential users • Allow manufacturers to view competitors products • Are an opportunity to create sales and establish relationships with agents, distributors, franchisees, and suppliers • Online trade shows • Become useful in difficult economic and/or political circumstances • Are obviously a less than adequate substitute for live trade shows Roy Philip

  15. Trade Shows: A Crucial Part of Business-to-Business Marketing (4 of 4) • Not a matter of selling the right product the first time instead selling a continuously changed the product to keep it right over time • The objective of relationship marketing • To make the relationship an important attribute of the transaction • Differentiating oneself from competitors • Using the Internet to facilitate relationship building and maintenance • Cisco Systems • Solar Turbines Inc. Roy Philip

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