Business Marketing
CHAPTER
7
Marketing
10
Lamb, Hair, McDaniel
Designed by
Eric Brengle
B-books, Ltd.
Copyright ©2009 by Cengage Learning Inc. All rights reserved
Prepared by
Amit Shah
Frostburg State University
1
Learning Outcomes
LOI
Describe business marketing
LO2
Describe the role of the Internet in
business marketing
LO3
Discuss the role of relationship marketing and
strategic alliances in business marketing
LO4
Identify the four major categories of business
market customers
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2
Learning Outcomes
LO5
Explain the North American Industry
Classification System
LO6
Explain the major differences between
business and consumer markets
LO7
Describe the seven types of business goods
and services
LO8
Discuss the unique aspects of business
buying behavior
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3
LOI What Is Business Marketing?
Describe business marketing
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LOI
What Is Business Marketing?
Business
Marketing
The marketing of goods and
services to individuals and
organizations for purposes
other than personal
consumption.
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Business Products
The key is intended use.
Business Products:
LOI

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
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LOI
REVIEW LEARNING OUTCOME
Business Marketing
CONSUMER
BUSINESS
cupboards
cupboards
Coffee pot
oven
oven
folder
and pen
Teddy bear
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photocopier
folder
and pen
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LO2
Business Marketing on
the Internet
Describe the role of the
Internet in
business marketing
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LO2
Measuring Online Success
Stickiness
A measure of a Web site’s
effectiveness; calculated by
multiplying the frequency of
visits times the duration of a
visit times the number of pages
viewed during each visit.
Stickiness = Frequency x Duration x Site Reach
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LO2 Evolution of E-Business Initiatives
• Revenue generation
• Aggressive
disintermediation initiatives
• Basic marketing
communication strategies
• Reduce costs
• Build channel
partnerships and trust
• Customer-focused
technology and systems
• Brand building and
development
• Integrate online and
traditional media
Time
Past initiatives
Present initiatives
10
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LO2
REVIEW LEARNING OUTCOME
The Internet in Business Marketing
Business Internet Uses
THEN
Revenue Generation
Basic Marketing Communication
and
NOW
Reduce costs
Build partnerships and alliances
Build and support branding
Develop customer-focused technology and systems
Integrate online and traditional media
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LO3
Relationship Marketing and
Strategic Alliances
Discuss the role of
relationship marketing and
strategic alliances in
business marketing
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LO3
Strategic Alliances
Strategic
Alliance
A cooperative agreement
between business firms
(strategic partnership).
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LO3
Relationships in Other Cultures
Keiretsu
A network of interlocking
corporate affiliates.
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LO3
REVIEW LEARNING OUTCOME
Relationship Marketing and Strategic Alliances
Supplier
(e.g. Intel)
Supplier
Supplier
Company
(e.g. Dell)
Company 1
(e.g. Starbucks)
Company 2
(e.g. Jim Beam)
Company
(e.g UPS)
Customer/
Distributor
(e.g. Ford)
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LO4
Major Categories of Business
Customers
Identify the four major
categories of
business market customers
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LO4
Major Categories of Business
Customers
Producers
Resellers
Governments
Institutions
OEMs
Wholesalers
Retailers
Federal
Municipal
Local
Schools
Hospitals
Colleges
Churches
Unions
Fraternal groups
Civic Clubs Foundations
Nonbusiness organizations
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LO4
Producers
Original
Equipment
Manufacturers
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.
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LO4
REVIEW LEARNING OUTCOME
Business Market Customers
Business Marketing
Producers
Resellers
Governments
Institutions
OEMs
Wholesalers
Federal
Unions
Churches
Retailers
State
Civic
Clubs
Foundations
Municipal
Other
Nonprofits
County
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LO5
North American
Industry Classification System
Explain the
North American Industry
Classification System
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LO5
NAICS
NAICS
North American
Industry
Classification
System
A detailed numbering system
developed by the United States,
Canada, and Mexico to classify
North American business
establishments by their main
production processes.
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Example of NAICS Hierarchy
NAICS
Level
Sector
Subsector
Industry
Group
U.S.
Industry
NAICS
Code
31-33
334
3346
334611
Computer
electronic
product
manufacturing
Mfg. and
reproduction
of magnetic/
optical media
Reproduction
of software
Description Manufacturing
LO5
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LO5
NAICS

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
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LO5
REVIEW LEARNING OUTCOME
North American Industry Classification System
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24
LO6
Business versus Consumer
Markets
Explain the major differences
between business and
consumer markets
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LO6 Business versus Consumer Markets
Characteristic
Demand
Business Market
Organizational
Individual
Volume
Larger
Smaller
# of Customers
Location
Distribution
Nature of Buy
Buy Influence
Fewer
Concentrated
More Direct
More Professional
Multiple
Many
Dispersed
More Indirect
More Personal
Single
Negotiations
More Complex
Simpler
Reciprocity
Leasing
Promotion
Yes
Greater
Personal Selling
No
Lesser
Advertising
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Consumer Market
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Demand in Business Markets
Demand is...
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
Fluctuating
LO6
Description
Multiple items are used together in final
product. Demand for one item affects all.
Demand for business products is more
volatile than for consumer products.
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LO6
Fluctuating Demand
Multiplier Effect
(Accelerator
Principle)
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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LO7
Types of Business Products
Describe the seven types
of business goods
and services
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LO7
Types of Business Products
Major Equipment
Accessory Equipment
Raw Materials
Component Parts
Processed Materials
Supplies
Business Services
30
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LO7
REVIEW LEARNING OUTCOME
Types of Business Goods and Services
Extruding
machine:
major equipment
Aluminum ore:
raw material
Tool cart:
accessory
equipment
Extruded metal:
processed
material
Propeller blade:
component part
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Paper:
supply
Uniforms:
contracted
service
31
LO8
Business Buying Behavior
Discuss the unique aspects
of business buying behavior
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Business Buying Behavior
Buying Centers
Evaluative Criteria
Aspects of
Business
Buying
Behavior
Buying Situations
Business Ethics
Customer Service
LO8
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LO8
Buying Centers
Buying Center
All those persons in an
organization who become
involved in the purchase
decision.
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LO8
Roles in the Buying Center
Initiator
Influencers
Gatekeepers
Decider
Purchaser
Users
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LO8
Evaluative Criteria
1. Quality
2. Service
3. Price
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LO8
Buying Situations
New Buy
A situation requiring the
purchase of a product for
the first time.
Modified
Rebuy
A situation in which 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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LO8
Customer Service
• Divide customers into
groups based on their
value
• Create policies that govern
how service will be
allocated among groups
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LO8
REVIEW LEARNING OUTCOME
Business Buying Behavior
Buying
Center
Initiator
Influencer
Decider
Purchaser
User
Gatekeeper
Evaluative
Criteria
 Quality
 Service
 Price
Buying
Situations
New buy
Straight rebuy
Modified rebuy
Customer service
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39