Introduction to

Business-to-Business
(B2B) Marketing
What Ìs Marketing?
· the process of planning and
executing
· the conception (product), pricing,
promotion, and distribution
· of ideas, goods, and services
· to create relationships
· that satisfy individual and
organizational objectives.¨
BUSINESS MARKETING
IS
· MARKETING OF GOODS AND SERVICES TO:
÷ Companies
÷ Government Bodies
÷ Ìnstitutions (i.e. hospitals)
÷ Non-Profit Organizations (i.e. American Red Cross)
FOR
· USE IN PRODUCING THEIR PRODUCTS
AND/OR TO FACILITATE THEIR OPERATIONS
· B2B: goods or services are soId for
any use other than personaI
consumption
· Note: It is 349 349 the nature of the
574/:.9; it is the reason for the
97,38,.943 97,38,.943
What Distinguishes B2B from B2C?
ou buy a gear to fix your mountain
bike.
Ford buys the same gear to fix a
machine.
Xerox buys soft drinks for its cafeterias.
ou start a landscaping business and
purchase a lawnmower.
The U.S. government buys.anything.
Ìs it a B2C or a B2B Transaction?
B2B versus B2C Marketing
Characteristic B2B Market B2C Market
Sales volume Greater SmaIIer
Purchase volume Greater SmaIIer
Number of buyers Fewer Many
Size of individual buyers Larger SmaIIer
Location of buyers Concentrated Diffuse
Buyer-seller relationship CIoser More ImpersonaI
Nature of channel More direct Less direct
Buying influences MuItipIe SingIe/MuItipIe
Type of negotiations More compIex SimpIer
Use of reciprocity Yes No
Use of leasing Greater Less
Key promotion method PersonaI SeIIing Advertising
BUSÌNESS TO BUSÌNESS:
ÌT ÌS ALL ABOUT DEMAND
· DERIVED DEMAND
÷ The demand for a company's products comes
from (derived) the demand for their customer's
products.
÷ Most demand comes from consumers.
· JOINT DEMAND
÷ Two products are used together and demanded
together ÷ Both products are consumed at the
same time
· Ìnelastic Demand
· Fluctuating Demand
Other Characteristics of Business Demand
Major Uses of B2B Products
For additionaI production
(e.g., components are combined
into subassemblies and become
part of the finished product)
For use in operations, but not
part of the finished product
For resaIe
Classifying Business Goods & Services
Main Categories of Products
Entering Goods
Become part of the finished product
Cost assigned to the manufacturing process
Foundation Goods
Capital Ìtems
Typically depreciated over time
FaciIitating Products
Support organizational operations
Handled as overhead expenses
Classifying Business Goods & Services
Entering Goods
Raw MateriaIs
Farm products & natural products
Only processed as necessary for handling & transport
Require extensive processing
Manufactured MateriaIs & Parts
Any product that has undergone extensive processing prior
to purchase
Component Materials require additional processing
Component Parts generally do not require additional
processing
Classifying Business Goods & Services
Foundation Goods
InstaIIations
Major long-term investment items
Buildings, land, fixed equipment, etc.
Accessory Equipment
Less expensive & short-lived
Not considered part of fixed plant
Portable tools, PC's, etc.
Classifying Business Goods & Services
FaciIitating Products
SuppIies
Any supplies necessary to maintain the
organization's operations
Services
Maintenance & Repair support
Advisory support
Logistical support
Categories of B2B Customers
· Commercial enterprises
÷Ìndirect channel members and
facilitators
÷OEMs (original equipment
manufacturers)
÷Users = customers
· Governmental organizations
· Ìnstitutions

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