Post on 10-Jan-2016
description
Chapterfo
unda
tions
of ChapterM A R K E T I N G
Business-to-BusinessMarketing
9
Chapter
Objectives1. Provide an overview of the buying process between
business buyers and sellers.
2. Differentiate among the three types of business markets.
3. Identify the three distinctive features of business markets.
4. Explain the characteristics of business market demand.
5. Identify the basic categories of business products.
6. Describe the nature and importance of government markets.
9Business-to-Business Marketing
9-1
Chapter
Business-to-Business Market
• Firms that produce or acquire goods and services to be used, directly or indirectly, in the production of other goods and services or to be resold.
9Business-to-Business Marketing
9-2
Chapter
Distinctive Features of the Business Market1. Geographic market concentration.
2. Small number of buyers.
3. Complex purchase decision process.
9Business-to-Business Marketing
9-3
Chapter
Producers
• Those who transform goods and services through production into other goods and services.
9Business-to-Business Marketing
9-4
Chapter
Trade Industries
• Organizations, such as retailers and wholesalers, that purchase for resale to others.
9Business-to-Business Marketing
9-5
Chapter
Value Added
• The increase in value of input material when transformed into semifinished or finished goods
9Business-to-Business Marketing
9-6
Chapter
Summary of Manufacturers by Province, 1996
9Business-to-Business Marketing
Table 9.1
9-7
MATERIALS AND TOTAL VALUE NUMBER OF TOTAL SUPPLIES USED ADDED PROVINCE ESTABLISHMENTS EMPLOYEES ($ MILLIONS)
($ MILLIONS)
All Canada* 36239 1703734 232 872.8 164940.1 Newfoundland 323 10335 734.5 793.0 Prince Edward Island 143 4177 419.7 254.6Nova Scotia 748 34402 3788.4 2293.5 New Brunswick 705 32069 5235.2 2780.4 Quebec 10603 484068 52261.2 42541.8 Ontario 14471 813504 124541.2 84495.5 Manitoba 1143 53114 4784.7 3949.9 Saskatchewan 800 22298 3155.6 1958.3 Alberta 2884 100746 18154.6 12334.4
British Columbia 4378 148528 19773.0 13517.4
NWT and Yukon 41 493 24.821.4
*There may be a discrepancy between figures for Canada and the total of all provinces due to varying sources of information.Source:Adapted from the Statistics Canada publication Market Research Handbook, 1999, Catalogue No. 63-224-XPB,
1999, p.180. Reprinted with permission of the Minister of Industry Canada.
Chapter
Business-to-Business Market Demand
1. Derived Demand
2. Joint Demand
3. Inventory Demand
4. Demand Variability
9Business-to-Business Marketing
9-8
Chapter
Derived Demand
• Demand for a product used by business derived (or linked to) demand for a consumer good.
9Business-to-Business Marketing
9-9
Chapter
Joint Demand
• Demand for an industrial product that is related to the demand for other industrial goods.
9Business-to-Business Marketing
9-10
Chapter
Inventory Adjustments
• Changes in the amounts of materials a manufacturer keeps on hand.
9Business-to-Business Marketing
9-11
Chapter
Demand Variability
• In the business market, the impact of derived demand on the demand for interrelated products used in producing consumer goods.
9Business-to-Business Marketing
9-12
Chapter
Accelerator Principle
• The disproportionate impact that changes in consumer demand have on business.
9Business-to-Business Marketing
9-13
Chapter
Basic Categories of Business Products
1. Capital items
2. Expense items
9Business-to-Business Marketing
9-14
Chapter
Capital Items
• Long-lived business assets that must be depreciated over time.
9Business-to-Business Marketing
9-15
Chapter
Depreciation
• The accounting concept of charging a portion of the cost of a capital item as a deduction against the company’s annual revenue for purposes of determining its net income.
9Business-to-Business Marketing
9-16
Chapter
Expense Items
• Products and services that are used within a short period of time.
9Business-to-Business Marketing
9-17
Chapter
Business Purchasing Situations
1. Straight Rebuy
2. Modified Rebuy
3. New Task Buying
9Business-to-Business Marketing
9-18
Chapter
Straight Rebuy
• A recurring purchase decision involving an item that has performed satisfactorily and is therefore purchased again by a customer.
Business-to-Business Marketing 9
9-19
Chapter
New Task Buying
• First-time or unique purchase situations that require considerable effort on the part of the decision makers.
Business-to-Business Marketing 9
9-20
Chapter
Buying Centre
• The key individuals who participate in a buying decision.
Business-to-Business Marketing 9
9-21
Chapter
Roles of Buying Group Members
1. Users
2. Gatekeepers
3. Influencers
4. Deciders
5. Buyers
Business-to-Business Marketing 9
9-22
Chapter
A Model of the Business Buying Process
Business-to-Business Marketing 9Figure 9.2
Delineation of suppliers
Information search
Need recognition
Sales demonstration/proposal
Review of internal proposals
Final decision
•Advertisements•Technical articles•Word of mouth
Personal and interpersonal influences
Organizational and environment influences
Triggering event
9-23
Chapter
RFP (Request for Proposal) or RFQ (Request for Quotation)• Common procedure used by firms to
get information on alternatives and prices.
Business-to-Business Marketing 9
9-24
Chapter
Reciprocity
• Extending purchasing preference to suppliers who are also customers.
Business-to-Business Marketing 9
9-25
Chapter
North American Industrial Classification System (NAICS)• A coding system used to categorize
different types of businesses and products (formerly the Standard Industrial Classification, or SIC).
Business-to-Business Marketing 9
9-26
ChapterBusiness-to-Business Marketing 9
Table 9.4
9-27
North American Industrial Classifications
Chapter
NAICS Examples (1 of 2)
Division 31-33 - Manufacturing
Group 311 Food manufacturing
Class 3111 Animal food manufacturing31111 Animal food manufacturing311111 Dog and cat food manufacturing311119 Other animal food manufacturing
Class 3112 Grain and oilseed milling31121 Flour milling and malt manufacturing311211 Flour milling311214 Rice milling and malt manufacturing
Business-to-Business Marketing 9Table 9.5
9-28a
Chapter
NAICS Examples (2 of 2)
Division 52 - Finance and Insurance
Group 521 Monetary authorities - Central Bank
Class 5211 Monetary authorities - Central Bank
52111 Monetary authorities - Central Bank
Group 522 Credit intermediation and related activities
Class 5221 Depository credit information
52211 Banking
522111 Personal and commercial banking industry
522112 Corporate and institutional banking
Business-to-Business Marketing 9Table 9.5
9-28b
Chapter
The Basics of Selling to Governments
1. Selling directly to government departments and agencies.
2. Accessing MERXTM, the electronic tendering services.
3. Registering online as a supplier.
Business-to-Business Marketing 9
9-29
Chapter
Electronic Exchange Network
• A single point of access to suppliers and consumers through the Internet.
Business-to-Business Marketing 9
9-30
Chapter
e-commerce
• Commerce conducted via the Internet.
Business-to-Business Marketing 9
9-31
Chapter
B2B e-commerce
• Doing business online through Internet-enabled marketplaces.
Business-to-Business Marketing 9
9-32
Chapter
Electronic Exchange
• An organized group of buyers and sellers from a specific industry linked together electronically.
Business-to-Business Marketing 9
9-34
Chapter
Vertical Web Community
• A site that acts as a comprehensive source of information and dialogue for a particular vertical market.
Business-to-Business Marketing 9
9-35
Chapter
The Three Primary Business Models for Online Exchanges
Business-to-Business Marketing 9Table 9.6
9-36
Description Example
1. Third-Party Exchange is owned and operated by Ventro Exchange a third-party that is not considered to (formerly Chemdex)
be a trading partner, often a B2B startup.
2. Consortia-Led Exchange ownership is shared GM/DaimlerChrysler/ Exchange between industry-leaders and a Ford exchange, Covisint
technology partner.
3. Private/ Exchange is owned and operated Wal-Mart’s RetailLink Proprietory by a single large firm. Exchange
Source: Steve Butler, “The Three Primary Business Models for Online Exchanges,” eMarketer, www.emarketer.com, June 19, 2000. Reprinted with permission.
Chapterfo
unda
tions
of ChapterM A R K E T I N G
Thank you for using our slides!
Logon ‘www.tactguys.com’ & enjoy more and more…