McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.

Business Markets and

Business Marketing

Part One

About the lecturerAbout the lecturer

Dr. Vu The DungDr. Vu The Dung• MBA in International Business (AIT, Thailand)MBA in International Business (AIT, Thailand)

• PhD in International Marketing (ODU, USA) PhD in International Marketing (ODU, USA)

• Marketing Lecturer School of Industrial Marketing Lecturer School of Industrial Management, HCM University of TechnologyManagement, HCM University of Technology

• Vice DeanVice Dean

• Director EMBA – MCI ProgramDirector EMBA – MCI Program

4

What do you expect from this course? What do you expect from this course?

What can we get from this course?What can we get from this course?

• Scientific approach to B2B Marketing Scientific approach to B2B Marketing issues and problemsissues and problems• Systematic thinking in MarketingSystematic thinking in Marketing

• Methods of data collectionMethods of data collection

• Formulation of Marketing strategy and plan Formulation of Marketing strategy and plan from strategic to implementation perspectivefrom strategic to implementation perspective

What can we get from this course?What can we get from this course?

• Contemporary B2B Marketing knowledgeContemporary B2B Marketing knowledge• Core Marketing concept: market, target market, Core Marketing concept: market, target market,

customer need, customer behavior, market customer need, customer behavior, market segmentation, marketing researchsegmentation, marketing research

• Marketing strategy, STP strategy, Competitive Marketing strategy, STP strategy, Competitive strategy, Customer Satisfaction, Relationship strategy, Customer Satisfaction, Relationship Marketing, CRMMarketing, CRM

• Marketing Plan, Marketing Mix: Product, Price, Marketing Plan, Marketing Mix: Product, Price, Place, Promotion, IMC Place, Promotion, IMC

What can we get from this course?What can we get from this course?

• Improve your soft skills:Improve your soft skills:• ReadingReading

• Participating in class and group discussionParticipating in class and group discussion

• PresentingPresenting

• Writing and Presenting:Writing and Presenting:- Project ProposalProject Proposal- Project Report (Marketing Plan)Project Report (Marketing Plan)

• Team workTeam work

• Data collection and analysisData collection and analysis

This course will NOTThis course will NOT

• Turn you into a Marketing Professional Turn you into a Marketing Professional

• Answer all the Marketing related questions Answer all the Marketing related questions you might haveyou might have

• Go into details of all marketing techniquesGo into details of all marketing techniques

Course ActivitiesCourse Activities

• Book readingsBook readings

• Video ClipsVideo Clips

• Open discussionOpen discussion

• Case studyCase study

• Individual assignmentsIndividual assignments

• Group Project Group Project

• PresentationPresentation

04/12/23

Critical thinkingCritical thinking

• Open mindedOpen minded

• Multicultural Multicultural

• FlexibleFlexible

• Trial and errorTrial and error

• Challenge existing assumptionsChallenge existing assumptions

• No discriminationNo discrimination

GradingGrading

• Final Exam:Final Exam: 45%45%

• Mid Term:Mid Term: 25%25%

• Group Project:Group Project: 30%30%

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Course Structure Course Structure

B2B MarketingB2B Marketingoverviewoverview

B2B StrategyB2B Strategy

CustomerCustomerRetentionRetentionCRMCRM

Group Group ProjectProject

Business Business Buyer Buyer

BehaviorBehavior

B2B B2B Mix 4PsMix 4Ps

DiscussionDiscussion

• What you have in your mind when you hear What you have in your mind when you hear the term “Business Marketing”?the term “Business Marketing”?

• List several Marketing Techniques that you List several Marketing Techniques that you consider important.consider important.

• Is Marketing good or bad?Is Marketing good or bad?

• Where to apply Marketing?Where to apply Marketing?

13

Case studyCase study

• Nắng Sài Gòn is a new, luxurious Nắng Sài Gòn is a new, luxurious restaurant located in District 1. The Director restaurant located in District 1. The Director asks his staff to go out to the streets to asks his staff to go out to the streets to distribute brochure and leaflets.distribute brochure and leaflets.

• Discuss the director’s marketing solution?Discuss the director’s marketing solution?

• If you owned a restaurant, what kind of If you owned a restaurant, what kind of restaurant you want your restaurant be? restaurant you want your restaurant be? (B2B perspective)(B2B perspective)

Part One

Business Markets and Business Marketing• Chapter 1

• Introduction to Business Marketing

• Chapter 2• The Character of Business Marketing

• Chapter 3• The Purchasing Function

• Chapter 4• Organizational Buyer Behavior

Chapter 1

Business Marketsand

Business Marketing

BASF EXAMPLE

A TYPICAL BUSINESS-TO-BUSINESS COMPANY THAT:

• Creates value for its customers

• Builds brand recognition

• Communicates a unified message

• Targets decisions makers

• Supports salespeople with variety of communication tools

1-17

Exhibit 1-1

General Foods

Salt is added to

frozen dinners

Salt is processed into food-grade or industrial grade salt

Salt is mined

Kroger

Salt is sold in

shakers

Morton’s SaltSalt mine

You

McDonalds

Salt is added to fries

Consumer MarketingBusiness MarketingBusiness marketing

MARKETING SALT

1-18

BUSINESS MARKETING

• THE MARKETING OF GOODS AND SERVICES TO:• Companies that consume

• Government Agencies

• Resellers (i.e. wholesalers)

• Institutions (i.e. hospitals)

• Non-Profit Organizations (i.e. American Red Cross)

FOR USE IN PRODUCING THEIR PRODUCTSAND/OR TO FACILITATE OPERATIONS

1-19

BUSINESS MARKETING IS UNIQUE

• VARYING INVOLVEMENT LEVELS IN BUYER-SELLER RELATIONSHIPS

• SHORTER DISTRIBUTION CHANNELS

• EMPHASIZES PERSONAL SELLING AND NEGOTIATION

• GREATER WEB INTEGRATION IN COMMUNICATION

• UNIQUE PROMOTIONAL STRATEGIES

• CONSUMPTION

• KNOWLEDGE OF CUSTOMER’S CUSTOMER

• MARKETING RESEARCH

1-20

MARKET DRIVEN MEANS:

• ALL EMPLOYEES FOCUS ON CUSTOMER SATISFACTION

• CONSTANTLY SEEKING OPERATIONAL EFFICIENCY

• BUILDING EFFECTIVE EMPLOYEE TERMS

• CONSTANTLY IMPROVING SERVICE/SUPPORT TO CUSTOMERS

• BEING INNOVATIVE

• DEVELOPING APPROACHES TO OPEN NEW MARKETS

1-21

TYPICAL BUSINESS TO BUSINESS GOODS AND SERVICES INCLUDE:

• RAW MATERIALS

• MANUFACTURED MATERIALS(Transformed from raw materials)

• COMPONENT OR OEM PARTS(Part of a completed product)

• ACCESSORY EQUIPMENT (Tools)

• CAPITAL EQUIPMENT (Machinery)

• MRO ITEMS (Maintenance, repair and operation products)

1-22

BUSINESS TO BUSINESS:IT IS ALL ABOUT RELATIONSHIPS

BUSINESS TO BUSINESS DEPENDS ON:

• Close Business and Personal Relationships

• Shorter Distribution Channels

• Emphasis on Personal Selling

• Dependence on WEB Integration

and

• Unique Promotional Strategies

Because of . . . .

Leads to . . . .

Through . . . .

1-23

BUSINESS TO BUSINESS CHALLENGES

• The size and location of customers – bigger, fewer, and concentrated

• Strict performance standards for products by customers

• Complicated purchasing decisions – Involvement and time

1-24

BUSINESS TO BUSINESS: IT IS ALL ABOUT DEMAND

• DERIVED DEMAND• The demand for a company’s products comes from

(derived) the demand for their customer’s products.

• Most demand originates with consumers.

• JOINT DEMAND• Two products are used together and demanded

together

• Both products are consumed at the same time

1-25

BUSINESS TO BUSINESSDERIVED DEMAND SIMPLIFIED

YOU MAKE HEADLAMP ASSEMBLIES FOR GMConsumers want more cars

Automobile manufacturers produce more cars

You sell more of your company’s headlamp assembliesConsumers

stop buying cars

Automobile manufacturers stop making cars

You sell fewer headlamp assemblies

1-26

THE FLOW OF GOODS AND SERVICES

Exhibit 1-6

Amount and type of car determined by

research facilitating service

Purchase order printed facilitating product

Finished car

Component parts

Assembly Sub- assembly

Manufactured materials

Raw Materials

Transported via facilitating services

1-27

CREATING VALUE

VALUE IS THE PERCEPTIONOF A PRODUCT’S BENEFIT

BEYOND ITS PRICE

VALUE HAS THREE PARTS:

1. VALUE RECEIVED FROM THE PRODUCT

2. VALUE RECEIVED FROM SELLER’S SERVICES

3. VALUE RECEIVED FROM RELATIONSHIP WITH SELLER

1-28

A BUSINESS MUST DETERMINE:

1. WHO ARE ITS CUSTOMERS?

2. WHAT DO ITS CUSTOMERS WANT?

3. HOW DO ITS BUYERS MAKE THEIR BUYING DECISIONS?

BUSINESS TO BUSINESS: THREECRITICAL QUESTIONS FOR A SUCCESSFUL

BUSINESS-TO-BUSINESS PROGRAM

1-29

Marketing – basic modelMarketing – basic model

30

Target Target CustomersCustomers

CompanyCompany CompetitorsCompetitors

Need Physical

Emotional

CompetitionQualityPrice

CapabilityProduct

PricePlace

Promotion

ValueValue

Trends in Marketing thinking and practiceTrends in Marketing thinking and practice

• From make-and-sell marketing From make-and-sell marketing to sense-and-to sense-and-respond marketing.respond marketing.

• From focusing on customer attraction From focusing on customer attraction to focusing on to focusing on customer retentioncustomer retention

• From pursuing market share From pursuing market share to pursuing customer to pursuing customer shareshare

• From marketing monologue From marketing monologue to customer dialogue. to customer dialogue.

Trends in Marketing thinking and practiceTrends in Marketing thinking and practice

• From mass marketing to customized marketingFrom mass marketing to customized marketing

• From owning assets From owning assets to owning brands.to owning brands.

• From operating in the marketplace From operating in the marketplace to operating in to operating in cyberspace.cyberspace.

• From single-channel marketing From single-channel marketing to multichannel to multichannel marketing.marketing.

• From product-centric marketing From product-centric marketing to customer-centric to customer-centric marketing.marketing.