Business Marketing

1. 5 BusinessMarketing Canadian Adaptation prepared by Don Hill, Langara College

2. Learning 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

3. Learning Objectives (continued) • Identify the four major categories of business market customers • Explain the North American Industry Classification System • 6. Explain the major differences between business and consumer markets

4. Learning Objectives (continued) 7. Describe the seven types of business goods and services 8. Discuss the unique aspects of business buying behaviour

5. Learning Objective 1 Describe business marketing Online www.bombardier.com www.brp.com 1

6. Business Marketing Business Marketing The marketing of goods and services to individuals and organizations for purposes other than personal consumption. 1

7. 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 Key is intended use 1

8. Learning Objective Describe the role of the Internet in business marketing 2 2

9. Business Marketing on the Internet • Conveying information • Conducting transactions • Delivering innovative services • Building customer and supplier relationships • Gathering marketing research data • Reducing costs and prices • Integrating the entire supply chain Online www.businesscentre.bell.ca www.dell.ca 2

10. Benefits of Business on the Internet • Lower prices • Greater selection of products and services • Access to customer and sales data • Around the clock ordering • Lower costs • Customized products 2

11. The Role of the Internet in Business Marketing Business Internet Uses THEN AND NOW Revenue GenerationBasic Marketing Communication Reduce costsBuild partnerships and alliancesBuild and support branding 2

12. Internet Sites Specifically for Small Business Online www.canadaone.com www.cbsc.org www.cfib.ca www.microsoft.com/canada/smallbiz www.myebiz.ca www.quicken.com/small_business www.sbinfo.canda.about.com www.smallbusinessbc.ca www.strategis.gc.ca 2

13. Learning Objective Discuss the role of relationship marketing and strategic alliances in business marketing 3 3

14. Strategic Alliance Strategic Alliance A cooperative agreement between business firms (strategic partnership). 3

15. Keiretsu Keiretsu A network of interlocking corporate affiliates. 3

16. Relationships in Business Marketing 3

17. Learning Objective Identify the four major categories of business market customers 4 4

18. Categories of Business Market Customers Online http://www.cbdnet.gpo.gov http://www.governmentbids.com 4

19. OEMs Original Equipment ManufacturersIndividuals and organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers. 4

20. Learning Objective 5 Explain the North American Industry Classification System 5

21. North American Industry Classification System NAICS NAICSA detailed numbering system developed by Canada, U.S., and Mexico to classify North American business establishments by their main production processes. 5

22. Examples of NAICS 5

23. NAICS • 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 • Sales prospects 5

24. Learning Objective Explain the major differences between business and consumer markets 6 6

25. Characteristic Business Market Consumer Market Organizational Individual Demand Volume Larger Smaller # of Customers Fewer Many Location Geographic Conc. Dispersed Distribution More Direct More Indirect Nature of Buy More Professional More Personal Buy Influence Multiple Single Negotiations More Complex Simpler Reciprocity Yes No Leasing Greater Lesser Promotion Personal Selling Advertising Business vs. Consumer Markets 6

26. Demand is... Description Derived Demand for business products results from demand for consumer products Inelastic A change in price will not significantly affect the demand for product Joint Multiple items are used together in final product. Demand for one item affects all Fluctuating Demand for business products is more volatile than for consumer products Demand in Business Markets 6

27. Multiplier Effect (Accelerator Principle) Multiplier Effect 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. 6

28. Learning Objective 7 Describe the seven types of business goods and services Online www.pmpa.org 7

29. Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services Types of Business Products 7

30. Learning Objective Discuss the unique aspects of business buying behaviour 8 Online www.pmac.ca 8

31. Buying Centers Evaluative Criteria Aspects of Business Buying Behaviour Buying Situations Business Ethics Customer Service Business Buying Behaviour 8

32. Buying Center Buying Center All those persons in an organization who become involved in the purchase decision. 8

33. Initiator Influencers Gatekeepers Decider Purchaser Users Roles in the Buying Center 8

34. Roles in the Buying Center 8

35. Evaluative Criteria for Business Buyers Price Service Quality 8

36. New Buy A situation requiring the purchase of a product for the first time. Modified Rebuy A situation where the purchaser wants some change in the original good or service. Straight Rebuy A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. Buying Situations 8

37. BuyingCenter EvaluativeCriteria New BuyStraight RebuyModified Rebuy Customer service Review Learning Objective 8 8