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Business Marketing by Gita MS Agarwal

This document provides an overview of key concepts in business marketing and industrial marketing. It discusses how industrial marketing involves creating mutually beneficial relationships between organizational suppliers and customers. The marketing concept focuses on understanding customer needs and integrating customer satisfaction across business functions. Key differences between business-to-business and consumer marketing include more complex products, group purchasing processes, an emphasis on personal selling over advertising, and oligopolistic competition.

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Sadhavi Mishra
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43 views23 pages

Business Marketing by Gita MS Agarwal

This document provides an overview of key concepts in business marketing and industrial marketing. It discusses how industrial marketing involves creating mutually beneficial relationships between organizational suppliers and customers. The marketing concept focuses on understanding customer needs and integrating customer satisfaction across business functions. Key differences between business-to-business and consumer marketing include more complex products, group purchasing processes, an emphasis on personal selling over advertising, and oligopolistic competition.

Uploaded by

Sadhavi Mishra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Business Marketing Lecture 1 by Gita MS Agarwal

Industrial Marketing
Also called: Business-to-Business (B2B) and Organizational Marketing.
Definition: the creation and management of mutually beneficial relationships between organizational suppliers and organizational customers. Customer can be private firm, public agency, or nonprofit organization.
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Customer-Business and organization


Business organizations : Manufacturing companies Government undertakings Private sector organizations Educational institutions Hospitals Distributors and dealers
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The Marketing Concept


Creating value for customers with goods and services that address organizational needs and objectives.

Marketing Concept
Three major components:
All company activities should begin with, and be based on, the recognition of a fundamental customer need. A customer orientation should be integrated throughout the functional areas of the firm: production, engineering, finance, R&D. Customer satisfaction is viewed as the means to long-term profitability goals.
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Market Orientation
Acquire intelligence from the external environment.
Disseminate that intelligence throughout the organization. Respond to the intelligence: take action.
(Kohli and Jaworski 1990, Journal of Marketing)

Marketing Mission Statement


State in terms of meeting customer needs, not in terms of products or technologies. Marketing Myopia (Levitt 1960 HBR)

Marketing Activities
Identify customer needs Research customer behavior Divide market into manageable segments Develop new products/services Establish/negotiate prices Deliver, install, service products Ensure adequate and timely supply of products at correct place Allocate resources across product lines Communicate with customers Evaluate/control marketing programs 8

Marketing Mix
Limited number of variables under Marketings control to create position that is attractive to the target market segment. Four Ps
Product Price Promotion Place (Distribution)
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External Environment
Characterized by:
Degree of Stability Complexity Diversity Hostility

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External Environment
Six Environments
Technological Economic Social/Cultural (Customer) Political/Legal Natural/Climatic Competitive
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So whats different about B2B?


Marketing Concept Marketing Mix Market Segmentation Product Life Cycle All apply in both B2C and B2B.
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So whats different about B2B?


The technical characteristics of the product are important.
These products directly affect the operations and economic health of the customer. The customer is an organization rather than an individual consumer, or family.
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Five Major Differences Between B2B and B2C


Products/Services being marketed Nature of demand How the customer buys Communication process Economic/Financial factors
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Products/Services
More complex Functional vs. Symbolic Attributes Large unit dollar value/Large quantities Custom/Tailored Various Stages from raw material to finished goods. Foundation, Entering, Facilitating Goods
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Raw Material Extraction

Material Processing Manufacturing Parts/Subassembly Assembly Distribution Facilitators

Wholesale/Retail Trade

Final Consumers
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Firms in Production Chain

Nature of Demand
Derived
Joint/Shared

Concentrated
Inelastic

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How Customer Buys


Group Process
Formal

Lengthy
Loyal

Decisions based on risk and opportunity


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Communication
Personal selling more important than mass paid advertising Support sales with other promotional activities: advertising in trade journals, catalogs, trade shows, direct mail, WWW. Message focused on technical, factual, and descriptive content. Multiple audience members.
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Economic/Financial Factors
Competition oligopolistic Power/Dependency relationships Reciprocity:Doing business with companies that do business with them. Economic variables: interest rates, inflation, business cycle

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Differences between Industrial and Consumer Marketing


Bases
Market Characteristics

Industrial Markets

Consumer Markets

Geographically Geographically Concentrated. Relatively disbursed. Mass markets Few buyers

Product Characteristics
Service Characteristics

Technical complexity, Customised


Service, timely delivery And availability very important

Standardised
Service, delivery, and availability somewhat important

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Differences between Industrial and Consumer Marketing


Bases Buyer behavior Industrial Markets Involvement of various functional areas in both buyer and supplier firms. Purchase decisions are mainly made on rational /performance basis. Technical expertise, Stable interpersonal relationship between buyers and sellers Consumer Markets Involvement of family members .Purchase decisions are mostly made on physiological/social.psy chological needs. Less technical expertise. Non personal relationship

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Differences between Industrial and Consumer Marketing


Bases
Decision making Channel Characteristics

Industrial Markets
Observable stages. Distinct Shorter. More direct. Fewer intermediaries/middlem en Emphasis on personal selling

Consumer Markets
Unobservable Mental stages Indirect. Multiple layers of intermediaries Emphasis on advertising

Promotional Characteristics Price Characteristics

Competitive bidding and List prices or maximum negotiated prices. List retail price (MRP) prices for standard products
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