Transcript Chapter 1 - Oakton Community College

Lamb, Hair, McDaniel
2012-2013
CHAPTER 7
© 2013 by Cengage Learning Inc. All Rights
Chapter 1
Copyright ©2012 by CengageReserved.
Learning Inc. All rights reserved
11
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Business Marketing
Learning Outcomes
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
4
Identify the four major categories of business
market customers
2
Learning Outcomes
5
Explain the North American Industry
Classification System
6
Explain the major differences between
business and consumer markets
7
Describe the seven types of business goods
and services
8
Discuss the unique aspects of business
buying behavior
3
What Is Business Marketing?
Describe business
marketing
1
4
What Is Business Marketing?
Business
Marketing
…or
Industrial
Marketing
The marketing of goods
and services to individuals
and organizations for
purposes other than
personal consumption.
5
1
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
The key is the intended use of the product
6
1
Business Marketing
on the Internet
Describe the role of the
Internet in
business marketing
2
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Business-to-Business E-Commerce
The use of the Internet to facilitate the
exchange of goods, services, and
information between organizations.
From Ch. 5-“The Impact of the Internet”- Trends in B to B
http://www.youtube.com/watch?v=QzZyUaQvpdc&feature=related
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2
Measuring Online Success
Stickiness
A measure of a Web site’s
effectiveness; calculated by
multiplying the frequency of
visits by the duration of a visit
by the number of pages viewed
during each visit.
Stickiness = Frequency x Duration x Site Reach
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2
Internet Sites for Small Businesses
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
http://www.allbusiness.com AllBusiness provides entrepreneurs with the
knowledge and tools to start, manage, and grow their business. The site links to
hundreds of how-to articles and provides expert answers to questions.

http://www.microsoft.com/business Microsoft Business offers small business
solutions from security to enterprise content management to cloud services. The
site also contains practical tips, advice, and links to how-to articles.

http://www.quicken.com/small_business This site offers information on
starting, running, and growing a small business. It also provides links to a variety
of other Quicken sites that are useful to small-business owners and managers.
Exhibit 7.2
Evolution of E-Business Initiatives
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Relationship Marketing
and Strategic Alliances
Discuss the role
of relationship marketing
and strategic alliances in
business marketing
3
12
Relationship Marketing
 Loyal customers are more
profitable than price-sensitive
customers with little brand loyalty
 Long-term relationships build
competitive advantage
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3
Strategic Alliances & Partnerships
• Cooperative agreements between firms
• Licensing or distribution agreements
• Joint ventures
• Used for R & D
• Used to strengthen operations
• Firms can compete better
• Trust and commitment are essential
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3
Relationships
in Other Cultures
Keiretsu relationships are highly integrated:
• Companies have executives sitting on
each others’ boards
• Maintain dedicated trade efforts
• Joint development, finance, and
marketing
• Forming relationships is the best way to
compete
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3
Major Categories of
Business Customers
Identify the four major
categories of
business market
customers
4
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Major Categories of
Business Customers
Producers
Resellers
Government
Institutions
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• OEMs-Original Equip Manufacturers
• Wholesalers
• Retailers
• Federal
• State
• Local
• Schools
• Hospitals
• Colleges
• Churches
• Unions
• Fraternal
• Civic Clubs
• Foundations groups
• Nonbusiness organizations
4
North American
Industry Classification System
Explain the North
American Industry
Classification
System
5
18
NAICS
NAICS
North American
Industry Classification
System
A detailed numbering system
developed by the U.S.,
Canada, and Mexico to classify
North American business
establishments by their main
production processes.
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5
Example of NAICS Hierarchy
NAICS
Level
Sector
Subsector
Industry Industry Industry
Group
Subdivision
NAICS
Code
51
513
5133
51332
513321
Broadcasting
and telecoms
Telecoms
Wireless
telecoms
carriers,
except
satellite
Paging
Descrip Information
tion
20
5
NAICS
21
•
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
5
Business versus Consumer Markets
Explain the major
differences between
business and
consumer markets
6
22
Business versus Consumer Markets
Characteristic
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Business Market
Consumer Market
Demand
Organizational
Individual
Volume
Larger
Smaller
# of Customers
Fewer
Many
Location
Concentrated
Dispersed
Distribution
More Direct
More Indirect
Nature of Buying More Professional
More Personal
Buy Influence
Multiple
Single
Negotiations
More Complex
Simpler
Reciprocity
Yes
No
Leasing
Greater
Lesser
Promotion
Personal Selling
Advertising
© 2013 by Cengage Learning Inc. All Rights Reserved.
Demand in Business Markets
Demand is...
Description
Derived
Demand for business products results
from demand for consumer products.
Inelastic
Joint
Fluctuating
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A change in price will not significantly
affect the demand for product.
Multiple items are used together in final
product. Demand for one item affects all.
Demand for business products is more
volatile than for consumer products.
6
Types of Business Products
Describe the seven
types of business
goods and services
7
25
Types of Business Products
Component Parts
Major Equipment
Processed Materials
Accessory Equipment
Supplies
Raw Materials
Business Services
26
7
Types of Business Goods and Services
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© 2013 by Cengage Learning Inc. All Rights Reserved.
Business Buying Behavior
Discuss the unique
aspects of business
buying behavior
8
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Business Buying Behavior
1-Buying Centers
2-Evaluative Criteria
Aspects of
Business
Buying
Behavior
3-Buying Situations
4-Business Ethics
5-Customer Service
29
8
1-Buying Centers
All those people in an organization who
become involved in the purchase decision.
Number of people
involved varies with
each purchase decision
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Buying centers may
not appear on formal
organization charts
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Roles in Buying Centers
Initiator
Influencers
Gatekeepers
Decider
Purchaser
Users
Jim Sinegal, Chief
Executive Officer of
Costco Wholesale
http://www.hulu.com/watch/368405#s-p1-so-i0
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2-Evaluative Criteria
 Quality
 Service
 Price
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3-Buying Situations
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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.
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4-Business Ethics
 Ethics Training
 Corporate Code of Ethics
 Standard of Behavior
 Employees
 Suppliers
34
8
5-Customer Service
 Develop measures for their target markets
 Divide customers into groups
based on their value
 Create policies that govern how
service will be allocated among groups
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