1. Business to Business Customers, Marketing and Environment
MKTG 550
August 28, 2012
Dr. Dawne Martin

2. Learning Objectives
Understand the different kinds of business customers and the differences in marketing issues associated with each
Understand the different categories of business marketers within each major types and related differences in marketing issues
Understand the different product types and associated marketing issues.
Investigate how the environmental influences on business marketers affect choices and challenges in marketing products and services
For next time:

3. Organizational Customers
Commercial Enterprises
Non-Profit and Not-for-Profit Organizations
Government Units
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4. Commercial Enterprises
Industrial Distributers
Value Added Resellers
Original Equipment Manufacturers (OEM)
Users and End Users
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5. Classify the following businesses
Supplier of copper wire to manufacturers
Supplier of rear axle assemblies to heave truck manufacturers
A distributor of private telephone exchange equip.
Supplier of automated assembly equipment
VARS
Users
Component producers
Raw material producers
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6. Commercial Enterprises: Industrial Distributers
Provide 4 types of utility:
Form, Time, Place, Possession
Assortment of Products from many manufacturers based on segment needs
“Reduce the discrepancy of assortment”
Serve smaller customers where direct representation is not efficient
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7. Commercial Enterprises: Value Added Resellers
More than just a distributor
Provides unique, complete offering from many sources
Creates a value network at the user level
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8. Commercial Enterprises: Original Equipment Manufacturers (OEM)
Purchase products and incorporate those products into their products
Usually the largest-volume users of goods and services
Ex: Intel is an OEM to many computer manufacturers. Goodyear is an OEM to the auto industry.
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9. Commercial Enterprises: Users and End Users
A manufacturer that purchases goods or services for consumption or incorporation into its own products
Identity of the purchased product becomes lost
Ex: When Goodyear purchases steel for fabrication of steel belts for tires, Goodyear is the steel manufacturer’s end user
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10. Government Units: 85,000 Local, State and Federal Units
What are some of the differences between marketing to a typical commercial enterprises and government agencies?
More than 35% of GNP
Largest consuming group in the United States
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11. Nonprofit and Not-for-Profit Organizations
Consumer grouping consists of:
Hospitals
Churches
Colleges
Nursing Homes
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12. Product Types Raw Material Producers Accessory Equipment Suppliers
Component Parts and Manufactured Materials Producers
Accessory Equipment Suppliers
Capital Goods Manufacturers
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13. Raw Materials Producer
Product Type:
Raw Materials Producer
Compete in price sensitive markets
Seek Value Added positions
Product loses identity once incorporated into customer’s product
Dominated by a few very large producers
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14. Component Parts and Manufactured Materials Producers
Product Type:
Component Parts and Manufactured Materials Producers
Parts retain their same form when incorporated
Retain identity when incorporated into consumer’s product
Differentiated by value added
EX: Seagate Disc Drives in Hewlett Packard Computers
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15. Capital Goods Manufacturer
Product Type:
Capital Goods Manufacturer
Consists of large purchases with high risk to customer
Many parts of customer organization involved in decision
Customers expect installation, equipment and accessories
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16. Accessory Equipment Suppliers
Product Type:
Accessory Equipment Suppliers
Equipment that works with another offering
Accessories can be added to a bundle opportunity by a channel intermediary
Produced by an independent supplier
Add value by complying with industry standards for primary offering
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17. Business to Business Market Environment: Publics
Communities of interested parties who are not direct participants in a market as customers, channel members, suppliers or competitors.
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18. Business to Business Market Environment: Types of Publics
Financial Publics
Independent Press
Public Interest Groups
Internal Publics
All may have interests because of economic or societal effects of activities
Often may be considered stakeholders in the buying center
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19. How can the agenda and focus of financial publics and public interest groups create seemingly opposite goals for business-to-business marketers?
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20. The Macro-Environment
Demographic Environment
Economic Environment
Socio-cultural Environment
Technological Environment
Natural Environment
Influence Value Creation
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21. The Macro-Environment: The Competitive Environment
Influences value creation, behavior of market participants
Various Types:
Pure Competition
Monopolistic Competition
Oligopolistic Competition
Pure Monopoly
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22. Exhibit 2-3: The Multidimensional Value Network
Value Activities
Value Enabling
Value Creating
Total Offering
Efforts of collaborators at different levels in the Value Network combine to create the total offering for the customer. See Chapter 1, Exhibit 4 for greater detail.
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23. Exhibit 2-5: The Product Life Cycle (PLC)
Decline
Introduction
Growth
Maturity
Time
Sales Revenue/ period
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24. Exhibit 2-6: The Technology Adoption Life Cycle (TALC)
Technophiles
Visionaries
Laggards
Time
Sales from New Adopters/ period
Pragmatists
Conservatives
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25. TALC and PLC
Exhibit 2-7: A Hypothetical TALC and PLC for Wireless LANs
Time
PLC -Total Sales
TALC - Sales from New Adopters/ period
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26. What market characteristics make it unlikely that pragmatists will easily follow the role of model of visionaries?
Relate the PLC and the chasm with particular emphasis on market factors that undergo change from introduction to rapid growth of an offering.
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