1Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Business Marketing Prepared by Deborah Baker Texas Christian University Chapter 6

2Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives 1.Describe business marketing. 2. Describe the role of the Internet in business marketing. 3. Discuss the role of relationship marketing and strategic alliances in business marketing.

3Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 4. Identify the four major categories of business market customers. 5. Explain the North American Industry Classification System. 6. Explain the major differences between business and consumer markets.

4Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 7.Describe the seven types of business goods and services. 8.Discuss the unique aspects of business buying behavior.

5Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe business marketing. 1 1 On Line On Line

6Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Business Marketing The marketing of goods and services to individuals and organizations for purposes other than personal consumption. 1 1

7Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 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 Key is intended use 1 1

8Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe the role of the Internet in business marketing. 2 2

9Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Internet Marketing Opportunities  Increase efficiency  Reduce costs  Improve customer service  Create one-to-one relationships  Introduce new products  Expand markets 2 2 On Line On Line

10Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Benefits of Marketing on the Internet 5. Lower costs 4. Around-the-clock ordering & customer service 3. Access to customer and product sales data 2. Greater selection of products and vendors 1. Lower prices 6. Customized products 2 2 On Line On Line

11Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the role of relationship marketing and strategic alliances in business marketing. 3 3

12Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Strategic Alliance A cooperative agreement between business firms (strategic partnership). 3 3

13Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Keiretsu A network of interlocking corporate affiliates. 3 3

14Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Identify the four major categories of business market customers. 4 4

15Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Categories of Business Customers Producers Resellers Governments Institutions 4 4 On Line On Line

16Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain the North American Industry Classification System. 5 5

17Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 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 IndustryClassificationSystem 5 5

18Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Examples of NAICS 5 5

19Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 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 5 5

20Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain the major differences between business and consumer markets. 6 6

21Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Business vs. Consumer Markets CharacteristicCharacteristic Demand Volume # of Customers Location Distribution Nature of Buy Buy Influence Negotiations Reciprocity Leasing Promotion Business Market Organizational Larger Fewer Concentrated More Direct More Professional Multiple More Complex Yes Greater Personal Selling Consumer Market Individual Smaller Many Dispersed More Indirect More Personal Single Simpler No Lesser Advertising 6 6

22Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Demand in Business Markets Demand is... DescriptionDescriptionDerivedDerived Demand for business products results from demand for consumer products InelasticInelastic 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 FluctuatingFluctuating Demand for business products is more volatile than for consumer products 6 6

23Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 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. 6 6

24Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe the seven types of business goods and services. 7 7

25Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Types of Business Products Major Equipment Accessory Equipment Raw Materials Component Parts Processed Materials Supplies Business Services Major Categories of Business ProductsMajor Products 7 7 On Line On Line

26Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the unique aspects of business buying behavior. 8 8

27Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Business Buying Behavior Customer Service Purchasing Ethics Buying Situations Evaluation Criteria Buying Centers Aspects of Business Buying Behavior Behavior 8 8

28Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Buying Center All those persons in an organization who become involved in the purchase decision. 8 8 On Line On Line

29Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Roles in the Buying Center InitiatorInitiatorInfluencersInfluencersGatekeepersGatekeepers DeciderDeciderPurchaserPurchaserUsersUsers 8 8

30Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 8 8 Roles in the Buying Center

31Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Evaluative Criteria for Business Buyers 8 8

32Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Buying Situations New Buy Modified Rebuy Straight Rebuy 8 8

33Chapter 6 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Buying Situations New Buy Modified Rebuy Modified Rebuy Straight Rebuy Straight Rebuy A situation requiring the purchase of a product for the first time. A situation requiring the purchase of a product for the first time. A situation where the purchaser wants some change in the original good or service. A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. 8 8