Business Marketing
chapter
5
Prepared by
Deborah Baker
Texas Christian University
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Learning Objectives
1. Describe business marketing.
chapter
5
2. Describe the role of the Internet in
business marketing.
3. Discuss the role of relationship marketing
and strategic alliances in business
marketing.
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Learning Objectives (continued)
4. Identify the four major categories of
business market customers.
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5
5. Explain the North American Industry
Classification System.
6. Explain the major differences between
business and consumer markets.
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Learning Objectives (continued)
7. Describe the seven types of business
goods and services.
8. Discuss the unique aspects of business
buying behavior.
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5
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1
Learning Objective
Describe business marketing.
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1
Business Marketing
The marketing of goods and
services to individuals
and organizations for
purposes other than
personal consumption.
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1
What is Business Marketing?
Business
Products
 Are used to manufacture other
products
 Become part of another product
Key is
intended
use
 Aid the normal operations of
an organization
 Are acquired for resale
without change in form
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2
Learning Objective
Describe the role of the Internet
in business marketing.
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E-Commerce
E-Commerce
The process of selling goods
and services on the Internet
Business
E-Commerce
Electronic transactions
between companies
Consumer
E-Commerce
Electronic transactions
between business and
individuals that purchase for
individual consumption
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2
Benefits of Internet’s Interactivity
 Convenience and increased efficiency
 Better customer service
 Lower transaction costs
 New relationship-building
opportunities
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Extranet
A private network that uses
Internet technology and
a browser interface.
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Business E-Commerce Benefits
1. Lower prices
2. Greater selection of products and vendors
3. Access to customer and product sales data
4. Around-the-clock ordering & customer service
5. Lower costs
6. Customized products
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3
Learning Objective
Discuss the role of relationship
marketing and strategic alliances
in business marketing.
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3
Strategic Alliance
A cooperative agreement
between business firms.
(strategic partnership)
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Benefits of Strategic Alliances
 Access to markets or to technology
 Economies of scale by
combining activities
 Faster market entry for new products
 Sharing of risk
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Tips for Successful Alliances
 Trust one another
 Share a common interest
 Bring different skills to the table
 Share gains
 Decide who has direct customer contact
 Understand the importance of
customer satisfaction
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3
Keiretsu
A network of interlocking
corporate affiliates.
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4
Learning Objective
Identify the four major categories
of business market customers.
.
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Categories of Business Customers
Producers
Categories
of Business
Customers
Resellers
Governments
Institutions
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4
5
Learning Objective
Explain the North American
Industry Classification System.
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NAICS
North American
Industry
Classification
System
A detailed numbering
system developed by the
U.S., Canada, and Mexico
to classify North American
business establishments
by their main production
processes.
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NAICS
 Provides 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
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6
Learning Objective
Explain the major differences
between business and
consumer markets.
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6
Business vs. Consumer Markets
Characteristic
Demand
Volume
# of Customers
Location
Distribution
Nature of Buy
Buy Influence
Negotiations
Reciprocity
Leasing
Promotion
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Business Market
Organizational
Larger
Fewer
Concentrated
More Direct
More Professional
Multiple
More Complex
Yes
Greater
Personal Selling
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Consumer Market
Individual
Smaller
Many
Dispersed
More Indirect
More Personal
Single
Simpler
No
Lesser
Advertising
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Demand in Business Markets
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
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Multiplier Effect
(Accelerator Principle)
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Phenomenon in which a
small increase or decrease
in consumer demand can
produce a much larger
change in demand for the
facilities and equipment
needed to make the
consumer product.
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7
Learning Objective
Describe the seven types
of business goods and services.
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7
Types of Business Products
Major Equipment
Accessory Equipment
Raw Materials
Component Parts
Major
Categories
of Business
Products
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Processed Materials
Supplies
Business Services
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Learning Objective
Discuss the unique aspects
of business buying behavior.
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Business Buying Behavior
Buying Centers
Evaluation Criteria
Aspects of
Business
Buying
Behavior
Buying Situations
Purchasing Ethics
Customer Service
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Buying Center
All those persons in
an organization who
become involved in
the purchase decision.
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Roles in the Buying Center
Initiator
Influencers
Gatekeepers
Purchaser
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Decider
Users
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Evaluative Criteria for
Business Buyers
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Buying Situations
New Buy
Modified
Rebuy
Straight
Rebuy
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Buying Situations
New Buy
A situation requiring the purchase
of a product for the first time.
Modified
Rebuy
A situation where the purchaser wants
some change in the original good or
service.
Straight
Rebuy
A situation in which the purchaser
reorders the same goods or services
without looking for new information or
investigating other suppliers.
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Customer Service
Customer Service is
enhanced through
technology
Online Services
World Wide Web
CD-ROMs
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