Introduction To Business-to-Business Marketing

Introduction to
Business-to-
Business
Marketing
B2B? 1-2
 Business to Business Marketing= B2B
 Covers transactions between business organizations

 Both sides are companies or organizatons
 Industrial Marketing
1-
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3
Prentice Hall
B2B Transactions
 A machinery company sells machine to a chemical company 1-4
 A chemical company sells chemical raw materials to a food company

 A petrolium company sells raw petrolium materails to a plastic company
 A microchip company sells microchips to a computer manufacturer
company
 A packaging company sells packages to a laundry detergent producer
 Bosch-Industrial Solutions
1-5
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B2B Services 1-6
 A logistics company sells logistics services to a construction company
 An advertising agency creates advertising campaign for a food company
 A consultancy company provides management consultancy for an energy
company
 A hotel chain makes an agreement with a textile company for their sales-
persons business trips
 https://www.youtube.com/watch?v=eu05zP7WA3A&list=PLxfC-I5NL73WZdjIz78Y4mx4PE7pwjo
qQ
What is Business-to- 7
Business Marketing?
 marketing of products to businesses or other organizations for use in
production of goods, for use in general business operations (such as office
supplies), or for resale to other consumers, such as a wholesaler selling to a
retailer.
The Marketing Mix
Product
8
Marketing Mix: Product
9
 The total offering is created by a partnership between the buying

organization and the marketing organization.
 The process creates an augmented product that is specific to the buying
unit’s needs and maximizes the value creation capabilities of the
marketer.
Core Product
+ Financing Terms
+ Delivery Options
= “Total Offering”
Marketing Mix: Price 10
 The mutually agreed-upon amount that satisfies

both sides in an exchange.
 Often varies from fixed price, with more special
discounts and allowances (in comparison to
consumer markets.)
 May involve things other than a one-time price
payment (such as commissions.)
Price is the measure
of value exchanged
and is determined
by the market—not
by costs.
Marketing Mix: Place
11
 Place is about getting the product to the customer in

order to maximize economic utility.
Marketing Mix: 12
Promotion
Business-to-business marketing requires a
different emphasis on different parts of the
promotional mix
Consumer V.S. Business to Business
 Emphasis is frequently on advertising.  Emphasis is frequently on personal

selling.
 Communication with customers is
often a monologue.  Communication with customers should
be a dialogue.
 Relationship is often brief.
 Relationship is often long-lasting.
Market Structure 13
Business to
Consumer
Business
 Geographically  Geographically
Dispersed Concentrated
 Mass Market;  Relatively Few
Many Buyers Buyers
 Relationships are  Relationships are
weak usually strong
Products
Business to
Consumer
Business
 Can be technically
Standardized complex
 Customized to user
Service, delivery and
preference
availability only
 Service, delivery and
somewhat important
Purchased for personal availability very
important
use
 Purchased for other
than personal use
14
Buyer Behavior 15
Business to
Consumer Business
 Individual purchasing  Professionally trained

Family involvement, purchasing personnel
influence  Functional involvement at
Social or psychological many levels
motives predominate  Task motives predominate
Buyer/Seller 16
Relationship
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Consumer Expectations Business to
Business
 Less technical expertise Technical expertise is an

 Nonpersonal relationships asset
 Little personal Interpersonal relationships
information exchanged between buyers and sellers
 Changing, short-term Significant personal info
relationships encourage exchanged
switching Stable, long-term
relationships encourage loyalty
Channels 17
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Consumer Business to
Business
 Indirect, multiple
 Shorter, more direct
relationships
Organization involvement
 Little or no customer
as part of supply chain
supply chain involvement
Promotion 18
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Business to
Consumer
Business
Emphasis on advertising, Emphasis on personal selling,

monologue dialogue
Companies compete for Most communications
visibility and awareness of invisible to the consumer
consumer market Consumer is seldom aware of
B2B brands and companies
Price 19
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Consumer Business to
Business
 Usually list or Complex purchasing

predetermined prices process or competitive
bidding, depending on
purchase type
Demand 20
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Business to
Consumer
Business
 Derived
 Direct
 Inelastic (short run)
 Elastic
 Volatile (leveraged)
 Less volatile
 Discontinuous
Concept of Derived
Demand
 Nothing happens unless consumer buys something
Acceleration Principle: “Bullwhip Effect”
1. Suppliers forecast 2. If consumer demand
production on existing drops, the order rate
order rates. also drops.
3. Supply chain members are then likely to overcompensate the

difference between the old and new forecasts, because:
A. Inventory levels can decline to fit new order rate

B. Customers change orders frequently
C. Minimum order quantities may exist
D. Trade promotions may influence buying patterns
16
Total Offering 22
 The puzzle of the B2B Customer needs
“Total
Offering”
•Product
•Service
•Image
•Availability
•Quantity
•Evaluated
Price
•Timely
delivery
Trends and Changes
in Business
Marketing
 Hyper-competition
 Formation of partner networks
 Adoption of technology and the internet
 Supply Chain Management
 Time Compression
23

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Introduction to

 Business to Business Marketing= B2B

 Covers transactions between business organizations

Copyright © 2011 Pearson Education, Inc., publishing as

 A chemical company sells chemical raw materials to a food company

 The total offering is created by a partnership between the buying

 The mutually agreed-upon amount that satisfies

 Place is about getting the product to the customer in

 Emphasis is frequently on advertising.  Emphasis is frequently on personal

 Individual purchasing  Professionally trained

 Less technical expertise Technical expertise is an

Emphasis on advertising, Emphasis on personal selling,

 Usually list or Complex purchasing

3. Supply chain members are then likely to overcompensate the

A. Inventory levels can decline to fit new order rate

 The puzzle of the B2B Customer needs

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