Orients you to some of the unique phenomena and players in business markets:
Chapter 1 – What is B2B?
Chapter 2 - The buyer-seller relationship
Chapter 3 - The purchasing Function
Chapter 4 - Organizational Buyer Behavior

The aim is to introduce and explore the characteristics and dimensions of business-to-business marketing
•
Define and explain the nature of business markets
• Identify the different types of organizational customers and categorize the goods and services that are sold and bought in business markets
•
Explore the characteristics of B2B marketing
• Discuss the nature of demand for business products and services
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Business Marketing is marketing of goods and services to:
•
Companies
• Government Bodies
• Institutions ( i.e. hospitals )
•
Non-Profit Organizations ( i.e. China Red Cross )
These products and services are purchased for:
• Use in producing their products ( i.e. raw materials, components, tools and machinery )
•
Facilitate their operations ( i.e. copy papers, fax machine, desktops )
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Business marketing
Salt mine
Salt is mined
Business Marketing
Morton’s Salt
Consumer Marketing
McDonalds
Salt is added to fries
You
Kroger
Salt is sold in shakers
Salt is processed into food-grade or industrial grade salt
General Foods
Salt is added to frozen dinners
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Original Equipment Manufacturers (OEMs) – purchasers of products to be included in its own final product
Users – when purchasing products/services to be consumed in support of the firm’s operation
Government Agencies – the largest, single purchaser of products and services
Institutions – the college or university
Industrial distributors – similar to the wholesaler/retailer serving the consumer market
As compared to individual consumers, business customers are:
1) Larger – buying in large quantities
2) Fewer in number
3) More geographically concentrated
4) Globally oriented
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Raw materials – e.g., gold purchased by AT&T
Manufacturing materials – raw materials which have been further processed or transformed to make them suitable for specific applications
Component or OEM parts part of a completed product; parts that may be assembled into a final product without further processing
Accessory equipment (tools) – e.g., computers used to guide/control the manufacturing operations in a firm
Capital equipment (machinery) – large, expensive items directly used in the production process
MRO items (operating supplies
products purchased for use in the firm’s operations, maintenance, repair, and operations products. Other names are facilitating supplies or facilitating services, such as the hiring of an advertising agency
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• Varying buyer-seller relationship
• Shorter distribution channels
•
Greater emphasis on personal selling
The small number of large, geographically concentrated buyers in this market makes shorter channels and long-term relationships feasible/necessary. Both of these factors favor personal selling.
• Greater web integration
The web is a perfect tool to speed communications required for effective coordination between partners who trust each other.
• Unique promotional strategies
E.g., trade show, public relations
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• Close Business and Personal Relationships
Because of
• Shorter Distribution Channels
Leads to
• Emphasis on Personal Selling
Through
• Dependence on WEB Integration and
• Unique Promotional Strategies
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Components
Raw materials
Assemblies
OEM parts
Manufactured materials
Subassemblies
Original equipment products
Maintenance repair, and operations supplies
OEM
Distributors
Valueadded
IBM resellers
Integrated solutions vendors
Supply houses
Capital equipment
Accessory
Users equipment
Facilitating services and products
Maintenance, repair, and operations supplies
Components Raw materials
Manufactured materials
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•
The size and location of customers
– bigger, fewer, and concentrated
•
Strict performance standards for products by customers organizational purchasing have strict performance standards for products: cost constraints; design specifications; delivery windows and durability requirements
• Complicated purchasing decisions – Involvement and time: a large number of people involved require a longer time to negotiate
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• Derived Demand
- The reality that business demand for products & services is shaped by the requirements of the products and services demanded by their customers
- Most demand comes from consumers
• Joint Demand
- Situations in which two products are used together and demanded together
- The demand for each is significantly affected by changes in the demand for the other
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You can make headlamp assemblies for autos – Auto company’s demand for headlamp is affected by the consumers’ demand for cars.
Consumers want more cars
Automobile manufacturers need more components and steel
Need more of your company’s headlamp assemblies
Consumers stop buying cars
Automobile manufacturers stop making cars
You can’t sell headlamp assemblies
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Transported via facilitating services
Raw
Materials
Manufactured materials
Subassembly
Assembly Component parts
Finished car
Purchase order printed—facilitating product
Amount and type of car determined by research—facilitating service
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Three critical questions for a successful B2B program
A business must determine:
1.
Who Are Its Customers? (Target markets)
2.
What Do Its Customers Want? (Identify)
3.
How Do Its Buyers Make Their Buying Decisions? (Identify)
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