FALL 2002 BA 303 FOR EXAMINATION ONE L.P. CHEW EXAMINATION ONE CHAPTERS 1 thru 5, 7 and 8

BA 303 BUSINESS 2 BUSINESS MARKETING CHAPTER ONE The chapter is pivotal to developing an effective understanding of business marketing management, as the essence of the business market and its unique aspects are often the basis for the development of marketing strategies.

BA 303-B 2 B MARKETING Every marketer whether focused on consumer or business markets must embrace a market orientation which places the consumer first and uses superior information about customers to manage marketing efforts. It is, however, important to understand how consumer and business market environments differ. WE ARE IN BUSINESS TO CREATE AND SERVICE A CUSTOMER. CUSTOMER SATISFACTION IS PARAMONT

B 2 B MARKETING WE STRIVE TO CUSTOMER DRIVE

Business Markets Markets for products and services bought by business, government, or institutions.Products to be incorporated into other products, used, consumed, or resold

Business Marketing Process of determining needs and developing marketing mixes for organizations The nature of the customer and how the product is used distinguishes business and consumer goods marketing

Characteristics of Business Markets Derived demand Business consumer demand is derived from demand for the final products of which they become a part Fluctuating demand Since demand is derived, the business marketer must monitor and forecast demand in final consumer markets

Business and Consumer Marketing: A Contrast Emphasis on personal selling The service component of the product offering plays a key role Protracted price negotiations for individual products are common Business marketers typically sell direct to large accounts Relational emphasis Building a long term relationship is the goal

Business Market Customers Commercial enterprises Users Purchase goods for use in making other products Buy equipment and machinery that are employed to manufacture other products Original equipment manufacturers Buy products which will be incorporated into a finished product

Business Market Customers Commercial enterprises Dealers and distributors Purchase business products for the purpose of reselling them to users and OEM's.Business middlemen which facilitate the distribution process Understanding the classifications provides guidelines for effective strategy formulation

Business product categories Entering goods.Become part of the finished product of the purchaser Raw materials and manufactured goods Treated as expense items ABSORBED!!!!

Foundation goods Used to produce products Include installations (buildings, equipment) and accessory equipment (light factory equipment, office equipment) Treated as capital items EXPENSED

Facilitating goods Supplies and services to support the organization's operations Include supplies, repair, and maintenance items and services Treated as expense items

1.General Motors costs may be higher because they are not taking advantage of the distinctive competencies of auto parts suppliers. These suppliers are often able to make selected parts more effectively and efficiently because they concentrate on creating competence in a very narrow line of products. In other words, auto parts suppliers are able to deliver superior value as a result of their distinctive competencies in a limited product line. A manufacturer's decision rules on what to buy or make should be based on analyses of those products and processes for which they have a distinctive competence.

2.Many business marketers spend considerable sums for advertising to final consumers because of the nature of derived demand for many business products. In the case of DuPont, advertising to final consumers should help to expand the demand for clothing made with DuPont's fabric and thus expand the total demand for DuPont's products.