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Strategic MarketingChapter 6 Learning Outcomes
Describe business marketing
Describe the role of the Internet in business marketing
Discuss the role of relationship marketing and strategic alliances in business marketing
Identify the four major categories of business market customers
LOI
LO2
LO3
LO4
Learning Outcomes
Explain the North American Industry Classification System
Explain the major differences between business and consumer markets
Describe the seven types of business goods and services
Discuss the unique aspects of business buying behavior
LO5
LO6
LO7
LO8
Describe business marketing
What Is Business Marketing?LOI
BusinessMarketing
BusinessMarketing
The marketing of goods and services to individuals and organizations for purposes other than personal consumption.
Interesting fact: The US Government is the WORLD’S largest single customer
LOI What Is Business Marketing?
LOI
Business Products:
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
Business ProductsThe key is intended use.
Describe the role of the Internet in
business marketing
Business Marketing on the Internet
LO2
LO2
StickinessStickiness
A measure of a Web site’seffectiveness; calculated by multiplying the frequency of visits times the duration of a visit times the number of pages viewed during each visit.
Measuring Online Success
Stickiness = Frequency x Duration x Site Reach
REVIEW LEARNING OUTCOMEThe Internet in Business Marketing
LO2
THEN
NOW Reduce costsBuild partnerships and alliancesBuild and support brandingDevelop customer-focused technology and systemsIntegrate online and traditional media
Revenue GenerationBasic Marketing Communication
Business Internet Uses
and
Discuss the role of relationship marketing and
strategic alliances inbusiness marketing
Relationship Marketing andStrategic AlliancesLO3
LO3
StrategicAlliance
StrategicAlliance
Strategic Alliances
A cooperative agreement between business firms (strategic partnership).
Identify the four majorcategories of
business market customers
Major Categories of Business CustomersLO4
LO4Major Categories of Business Customers
Producers
Resellers
Governments
Institutions
OEMs
WholesalersRetailers
FederalMunicipalLocal
Schools Hospitals CollegesChurches Unions Fraternal groupsCivic Clubs FoundationsNonbusiness organizations
LO4
OriginalEquipment
Manufacturers
OriginalEquipment
Manufacturers
Producers
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.
REVIEW LEARNING OUTCOMEBusiness Market Customers
LO4
Business MarketingBusiness Marketing
InstitutionsInstitutionsResellersResellers
Wholesalers
Retailers
ProducersProducers
OEMs
GovernmentsGovernments
Federal
State
Municipal
County
Unions
CivicClubs
Other
Churches
Foundations
Nonprofits
Explain the North American Industry
Classification System
North American Industry Classification SystemLO5
NAICSNAICS
LO5 NAICS
A detailed numbering system developed by the U.S., Canada, and Mexico to classify North American business establishments by their main production processes.North American
Industry Classification System
LO5
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
NAICS
Explain the major differences between business and
consumer markets
Business versus Consumer Markets
LO6
CharacteristicCharacteristic
DemandDemand
VolumeVolume
# of Customers# of Customers
LocationLocation
DistributionDistribution
Nature of BuyNature of Buy
Buy InfluenceBuy Influence
NegotiationsNegotiations
ReciprocityReciprocity
LeasingLeasing
PromotionPromotion
Business MarketBusiness Market
OrganizationalOrganizational
LargerLarger
FewerFewer
ConcentratedConcentrated
More DirectMore Direct
More ProfessionalMore Professional
MultipleMultiple
More ComplexMore Complex
YesYes
GreaterGreater
Personal SellingPersonal Selling
Consumer MarketConsumer Market
IndividualIndividual
SmallerSmaller
ManyMany
DispersedDispersed
More IndirectMore Indirect
More PersonalMore Personal
SingleSingle
SimplerSimpler
NoNo
LesserLesser
AdvertisingAdvertising
LO6 Business versus Consumer Markets
LO6
Demand is...Demand is... DescriptionDescription
DerivedDerived Demand for business products results from demand for consumer products.Demand for business products results from demand for consumer products.
InelasticInelastic A change in price will not significantly affect the demand for product.A change in price will not significantly affect the demand for product.
JointJoint Multiple items are used together in final product. Demand for one item affects all.Multiple items are used together in final product. Demand for one item affects all.
FluctuatingFluctuating Demand for business products is more volatile than for consumer products.Demand for business products is more volatile than for consumer products.
Demand in Business Markets
Describe the seven types of business goods
and services
Types of Business ProductsLO7
22
LO7
Major EquipmentMajor Equipment
Accessory EquipmentAccessory Equipment
Raw MaterialsRaw Materials
Component PartsComponent Parts
Processed MaterialsProcessed Materials
SuppliesSupplies
Business ServicesBusiness Services
Types of Business Products
Online
http://www.sysco.com
Discuss the unique aspects of business buying behavior
Business Buying BehaviorLO8
LO8
Customer ServiceCustomer Service
Business EthicsBusiness Ethics
Buying SituationsBuying Situations
Evaluative CriteriaEvaluative Criteria
Buying CentersBuying Centers
Aspects of Business
BuyingBehavior
Aspects of Business
BuyingBehavior
Business Buying Behavior
Buying CenterBuying Center
LO8 Buying Centers
All those persons in an organization who become involved in the purchase decision.
LO8
InitiatorInitiator InfluencersInfluencers GatekeepersGatekeepers
DeciderDecider PurchaserPurchaser UsersUsers
Roles in the Buying Center
Online
http://www.loctite.com
LO8 Evaluative Criteria
1. Quality
2. Service
3. Price
LO8
New BuyNew BuyA situation requiring the purchase of a product for the first time.
A situation requiring the purchase of a product for the first time.
ModifiedRebuy
ModifiedRebuy
A situation where the purchaser wants some change in the original good or service.
A situation where the purchaser wants some change in the original good or service.
StraightRebuy
StraightRebuy
A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.
A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers.
Buying Situations
Business Ethics
• Ethical behavior refers to moral principles or values that govern the conduct of companies.
• Companies publish a code of ethics which help guide buyers and sellers.
REVIEW LEARNING OUTCOMEBusiness Buying Behavior
LO8
Customer service
InitiatorInfluencerDecider GatekeeperPurchaserUser
Buying Center
Quality Service Price
EvaluativeCriteria
Buying Situations
New buyStraight rebuyModified rebuy