FALL 2002 BA 303
FOR EXAMINATION ONE
L.P. CHEW
EXAMINATION ONE
CHAPTERS 1 thru 5, 7 and 8
BA 303
BUSINESS 2 BUSINESS
MARKETING
CHAPTER ONE
The chapter is pivotal to developing an
effective understanding of business
marketing management, as the essence
of the business market and its unique
aspects are often the basis for the
development of marketing strategies.
BA 303-B 2 B MARKETING
Every marketer whether focused on consumer or
business markets must embrace a market
orientation which places the consumer first and
uses superior information about customers to
manage marketing efforts. It is, however,
important to understand how consumer and
business market environments differ.
WE ARE IN BUSINESS TO CREATE
AND SERVICE A CUSTOMER.
CUSTOMER SATISFACTION IS
PARAMONT
B 2 B MARKETING
WE STRIVE TO CUSTOMER DRIVE
Business Markets
Markets for products and
services bought by business,
government, or
institutions
. Products to be incorporated
into other products, used,
consumed, or resold
Business Marketing
Process of determining
needs and developing marketing
mixes for
organizations
The nature of the customer
and how the product is used
distinguishes
business and consumer goods
marketing
Characteristics of Business Markets
Derived demand
Business consumer demand is derived
from demand for the final products of
which they become a part
Fluctuating demand
Since demand is derived, the business
marketer must monitor and forecast
demand in final consumer
markets
Business and Consumer
Marketing: A Contrast
Emphasis on personal selling
The service component of the product
offering plays a key role
Protracted price negotiations for individual
products are common
Business marketers typically sell direct to
large accounts
Relational emphasis
Building a long term relationship is the goal
Business Market Customers
Commercial enterprises
Users
Purchase goods for use in
making other products
Buy equipment and machinery
that are employed to manufacture
other products
Original equipment manufacturers
Buy products which will be
incorporated into a finished product
Business Market Customers
Commercial enterprises
Dealers and distributors
Purchase business products for
the purpose of reselling them to users
and OEM's
.
Business middlemen which
facilitate the distribution process
Understanding the classifications
provides guidelines for effective
strategy formulation
Business product categories
Entering goods
. Become part of the finished
product of the purchaser
Raw materials and
manufactured goods
Treated as expense items
Foundation goods
Used to produce products
Include installations
(buildings, equipment) and
accessory equipment (light
factory equipment, office
equipment)
Treated as capital items
Facilitating goods
Supplies and services to
support the organization's
operations
Include supplies, repair, and
maintenance items and
services
Treated as expense items
1.
General Motors costs may be higher because
they are not taking advantage of the
distinctive competencies of auto parts suppliers.
These suppliers are often able to
make selected parts more effectively and
efficiently because they concentrate on
creating competence in a very narrow line of
products. In other words, auto parts
suppliers are able to deliver superior value as a
result of their distinctive
competencies in a limited product line. A
manufacturer's decision rules on what
to buy or make should be based on analyses of
those products and processes for
which they have a distinctive competence.
2. Many business marketers spend
considerable sums for advertising to final
consumers because of the nature of
derived demand for many business
products.
In the case of DuPont, advertising to
final consumers should help to expand
the demand for clothing made with
DuPont's fabric and thus expand the total
demand for DuPont's products.