Strategic MarketingChapter 6 Learning Outcomes

Describe business marketing

Describe the role of the Internet in business marketing

Discuss the role of relationship marketing and strategic alliances in business marketing

Identify the four major categories of business market customers

LOI

LO2

LO3

LO4

Learning Outcomes

Explain the North American Industry Classification System

Explain the major differences between business and consumer markets

Describe the seven types of business goods and services

Discuss the unique aspects of business buying behavior

LO5

LO6

LO7

LO8

Describe business marketing

What Is Business Marketing?LOI

BusinessMarketing

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

Interesting fact: The US Government is the WORLD’S largest single customer

LOI What Is Business Marketing?

LOI

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

Business ProductsThe key is intended use.

Describe the role of the Internet in

business marketing

Business Marketing on the Internet

LO2

LO2

Stickiness

A measure of a Web site’seffectiveness; calculated by multiplying the frequency of visits times the duration of a visit times the number of pages viewed during each visit.

Measuring Online Success

Stickiness = Frequency x Duration x Site Reach

REVIEW LEARNING OUTCOMEThe Internet in Business MarketingLO2

THEN

NOW Reduce costsBuild partnerships and alliancesBuild and support brandingDevelop customer-focused technology and systemsIntegrate online and traditional media

Revenue GenerationBasic Marketing Communication

Business Internet Uses

and

Discuss the role of relationship marketing and

strategic alliances inbusiness marketing

Relationship Marketing andStrategic AlliancesLO3

LO3

StrategicAlliance

Strategic Alliances

A cooperative agreement between business firms (strategic partnership).

Identify the four majorcategories of

business market customers

Major Categories of Business CustomersLO4

LO4 Major Categories of Business Customers

Producers

Resellers

Governments

Institutions

OEMs

WholesalersRetailers

FederalMunicipalLocal

Schools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs FoundationsNonbusiness organizations

LO4

OriginalEquipment

Manufacturers

Producers

OEMs.Individuals and organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers.

REVIEW LEARNING OUTCOMEBusiness Market CustomersLO4

Business Marketing

InstitutionsResellers

Wholesalers

Retailers

Producers

OEMs

Governments

Federal

State

Municipal

County

Unions

CivicClubs

Other

Churches

Foundations

Nonprofits

Explain the North American Industry

Classification System

North American Industry Classification SystemLO5

NAICS

LO5 NAICS

A detailed numbering system developed by the U.S., Canada, and Mexico to classify North American business establishments by their main production processes.North American

Industry Classification System

LO5

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

NAICS

Explain the major differences between business and

consumer markets

Business versus Consumer Markets

LO6

CharacteristicDemand

Volume# of CustomersLocationDistributionNature of BuyBuy InfluenceNegotiationsReciprocityLeasingPromotion

Business MarketOrganizationalLargerFewerConcentratedMore DirectMore ProfessionalMultipleMore ComplexYesGreaterPersonal Selling

Consumer MarketIndividualSmallerManyDispersedMore IndirectMore PersonalSingleSimplerNoLesserAdvertising

LO6 Business versus Consumer Markets

LO6

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

Describe the seven types of business goods

and services

Types of Business ProductsLO7

22

LO7

Major Equipment

Accessory Equipment

Raw Materials

Component Parts

Processed Materials

Supplies

Business Services

Types of Business Products

Online

http://www.sysco.com

Discuss the unique aspects of business buying behavior

Business Buying BehaviorLO8

LO8

Customer Service

Business Ethics

Buying Situations

Evaluative Criteria

Buying Centers

Aspects of Business

BuyingBehavior

Business Buying Behavior

Buying Center

LO8 Buying Centers

All those persons in an organization who become involved in the purchase decision.

LO8

Initiator Influencers Gatekeepers

Decider Purchaser Users

Roles in the Buying Center

Online

http://www.loctite.com

LO8 Evaluative Criteria

1. Quality

2. Service

3. Price

LO8

New BuyA situation requiring the purchase of a product for the first time.

ModifiedRebuy

A situation where the purchaser wants some change in the original good or service.

StraightRebuy

A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.

Buying Situations

Business Ethics

• Ethical behavior refers to moral principles or values that govern the conduct of companies.

• Companies publish a code of ethics which help guide buyers and sellers.

REVIEW LEARNING OUTCOMEBusiness Buying BehaviorLO8

Customer service

InitiatorInfluencerDecider GatekeeperPurchaserUser

Buying Center

Quality Service Price

EvaluativeCriteria

Buying Situations

New buyStraight rebuyModified rebuy