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8/3/2019 IM 9e pp CH01
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Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter One
A BusinessMarketing
Perspective
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Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Challenges of business marketers
1. Understanding deep customer
needs in new ways.
2. Identifying new opportunities
for organic business growth.
3. Improving value managementtechniques and tools.
4. Calculating better marketing
performance and
accountability metrics.
5. Competing and growing inglobal markets, particularly
China.
6. Countering the threat of
product and service
commoditization by bringing
innovative offerings to market
faster, and moving to morecompetitive business models.
7. Convincing c-level executives
to embrace the marketing
concept and support robust
marketing programs.
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Business problems
I would like to share a problem I am facing nowadays Ihave recently joined a company manufacturing PlasticProducts. From Last two years they have been workingon a plastic bobbin. The Bobbin is basically designed for
dyeing yarn, and this bobbin has to bear a temperatureof 150 degree c and have to bear a weight and suddenfatigue of other bobbin weighing 6 to 7 kgs. The processis that thread is first wounded over at this bobbin. Thenthis bobbin is dipped in a dye having a temperature ofmore than 150 degree centigrade. Then this bobbin is
placed on a shaft at this stage bobbin has at least 7 kilosof weight. Similar bobbin is when stacked on this bobbinthe bobbin starts cracking from its base. I have triedpolyacetal, nylon ABS and Nylon but all vent in vain
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Business Markets
Local to international
Bought by
Businesses
Government bodies
Institutions
For consumption (process material,office supplies, consulting services)
For use ( installations or equipments)
For resale
What differentiates business marketing
from consumer marketing?Intended use of products and intended
consumer.
Markets for products and services
Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
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Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
B2B versus B2C MarketingCharacteristic B2B Market B2C Market
Sales volume Greater Smaller
Purchase volume Greater Smaller
Number of buyers Fewer Many
Size of individual buyers Larger Smaller
Location of buyers Concentrated Diffuse
Buyer-seller relationship Closer More Impersonal
Nature of channel More direct Less direct
Buying influences Multiple Single/Multiple
Type of negotiations More complex Simpler
Use of reciprocity Yes No
Use of leasing Greater Less
Key promotion method Personal Selling Advertising
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Figure 1.2
The Consumer Market (B2C) and the Business Market (B2B) at
Dell, Inc.
B2B
Customers
B2C
Individuals &
Households
Businesses
GlobalLargecorporations
Small & Mediumsized businesses
Institutions
HealthcareEducation
Government
FederalState
Local
Selected
Products
PCs
PrintersConsumer Electronics
Simple ServiceAgreements
PCs
Enterprise StorageServers
Complex Service Offerings
Dell, Inc.
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A Market Driven Firm
Market sensing capabilitycompanys ability
to sense change and to anticipate customer
responses
Customer linkingthe ability to develop and
manage close customer relationships
Has:
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Marketings Cross Functional Relationship
Business marketing planning must
be coordinated and synchronized
with corresponding planning efforts.
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Business Market Characteristics
Derived demand
Fluctuating demand
Stimulating demand
Price sensitivity/demand
elasticity
Global Market perspective
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Relationship Marketing
All marketing activities directed toward
establishing, developing, and maintaining
successful exchanges with customers
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Michael Porter and Victor Millar observed that to gain competitive
advantage over its rivals, a company must either perform these activities at
a lower cost or perform them in a way that leads to differentiation and a
premium (more value).
The Supply Chain
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Business Market Customer
Commercial Enterprises
Three categories:
Users
OEMs Dealers and distributors
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OEMs
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Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Market size and estimation
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Impact
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Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Impact
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Classifying industrial goods by
the following questions:
How does the good or service
enter the production process?
How does it enter the cost
structure of the firm?
Classifying
Goods for the
Business
Market
Source: Adapted from PhilipKotler, Marketing
Management: Analysis,Planning, and Control, 4th ed.
(Englewood Cliffs, N.J.:
Prentice-Hall, 1980), p. 172,
with permission of Prentice-
Hall, Inc.
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A Framework forBusiness Marketing Management
Business marketing strategy
is formulated within the
boundaries establishedby the corporate
mission and
objectives.
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Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Financial return on marketing investment
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Innovation vs. commoditization
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Discussion
Dell Computer has excelled with a fast-paced build-to-orderapproach that involves taking customer orders online, orchestratingproduction tailored to each customer, and forging a one-to-onerelationship with the customer after the sale. Some auto industryexecutives have turned to Michael Dell, the company founder, foradvice concerning how to make their businesses look like his.Senior executives at Ford, for example, envision a future wherecustomers will order online and factories will build to order,eliminating billions of dollars of inventory costs (for example, largestocks of vehicles on hand). All of those mass produced cars sittingfor weeks on dealer lots represent a massive investment that yieldsno return until a buyer comes along.
a. Evaluate the feasibility of a build-to-order system for anautomaker like Ford and outline the key requirements that Ford mustmeet to make the strategy work for a potential customer like you.
b.How would a build-to-order system alter the way in whichsuppliers (business marketers) would serve Ford as a customer?
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Discussion
Consider some leading-edge consumer product
manufacturers like Procter & Gamble, Gillette, or Coca
Cola. What major differences would you expect to find in
comparing the marketing strategy patterns employed by
these consumer-products companies to those of leading
business marketing firms such as Intel, 3M, or Dow
Chemical? Next, describe the similarities and differences
that emerge when comparing the distinctive attributes of
a leading-edge consumer products marketer to a firmthat demonstrates superb skills serving customers in the
business market.
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Developed by Cool Pictures and MultiMe dia Presentations Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.