Chapter 14 \ Products and Services for Businesses © Mit Cateora, ary Gy and ohn GrahamIntroduction & + Issues of standardization versus adaptation — Less relevance to marketing industrial goods than consumer goods ¢ Factors accounting for greater market similarities in customers of industrial goods versus consumer goods — The inherent nature of the product (industrial products and services are used in the process of creating other goods and services) — The motive or intent for the user differs (industrial consumers are seeking profit, whereas the ultimate consumer is seeking satisfaction)U.S. Exports category Servos tote “rave! pone a} Exhibit 14.1 Dasienge tone Otver raraportasen (height ard port eevee) Boyaney ee Lcorars Prete Sone? + Commercial prewonal ant tctracl perm ebertees micowreng ya tists yer) + Heath coe “Financial eres faring ond emcee) “+ Edtnernn ae berry serenely Hrsg wan eon) | Eetetarmeet fret tent mor * Tecommnestont The Commence Department na tonger tress oud the wetatcs by, the Freune Sovconconoporan They bw bed here soo ob oataeweatpeneeengen bu berg manent | Major Categories a Mercharetne total Forks tee ard bower eyes faheat hot meat) echt egg babe plate, charac, rata Capstal goowh (construction epagment mere, coment, Foy Philp ’Demand in Global Business-to-Business Markets * Three factors affect the demand in industrial markets differently than in consumer markets. They are: — Volatility of industrial demand (demand in industrial markets is by nature more volatile) — Stages of economic development (stages of industrial and economic development affect demand for industrial products) — Technology and market demand (the level of technology of products and services make their sales more appropriate for some countries than —______others) oy Ph ‘The Volatility a of Industrial Demand Cyclical swings in demand — Professional buyers tend to act in concert — Derived demand accelerates changes in markets Derived demand can be defined as demand dependent on another source Minor changes in consumer demand mean major changes in related industrial demand — Boeing * Worldwide demand for travel services related to demand for new airplanes * Commercial aircraft industry one of the most volatileQuality and it Global Standards Perception of quality rests solely with the customer — Level of technology reflected in the product — Compliance with standards that reflect customer needs — Support services and follow-through — Price relative to competitive products * Quality standards vary with level of country’s industrializationISU 9000 Cernotiicanon — An International Standard of Quality B | ee * Positively affects the performance and stock prices of firms Certification of the existence of a quality control system a company has in place to ensure it can meet published quality standards — Describes three quality system models — Defines quality concepts — Gives guidelines for using international standards in quality systems * Generally voluntaryisYV 9000 Lertinication — An International Standard of Quality Bt pS) eee + EU Product Liability Directive * Nowa competitive marketing tool in Europe and around the world ¢ The ACSI approach hoy Pinte “Business Services a For many industrial products the revenues from associates services exceed the revenues from the products — Cellular phones — Printers Leasing capital equipment Services not associated with products — Boeing at-sea-satellite-launch services — Ukrainian cargo company space rental on giant jets — Professional services (advertising, banking, healthcare, etc.)After-Sale Services Installation Training Spare and replacement parts — Delivery time — Cost of parts Service personnel Almost always more profitable than the actual sale of the machinery or product Crucial in building strong customer loyalty BOther Business Services bia Client followers Mode of entry — Licensing — Franchising — Direct investment Protectionism Restrictions on cross-border data flowstirade Shows: A Crucial Part ag ee to-Business Marketing eof * Secondary methods for marketing: — Advertising in print media — Catalogs — Web sites — Direct mail * Trade shows have become the primary and most important vehicle for doing business in many foreign countries Fay MhilioTrade Shows: A Crucial Part of Business- to-Business Marketing yr * Total annual media budget spent on trade events: — Europeans — 22 percent — Americans — 5 percent Roy Pivip ”Trade Shows: A Crucial Part of Business-— to-Business Marketing 54 (3 of 4) * Trade shows — Provide the facilities for a manufacturer to exhibit and demonstrate products to potential users — Allow manufacturers to view competitors products — Are an opportunity to create sales and establish relationships with agents, distributors, franchisees, and suppliers * Online trade shows — Become useful in difficult economic and/or political circumstances — Are obviously a less than adequate substitute for live trade showsTrade Shows: A Crucial Part of Business- to-Business Marketing oy * Nota matter of selling the right product the first time instead selling a continuously changed the product to keep it right over time * The objective of relationship marketing — To make the relationship an important attribute of the transaction + Differentiating oneself from competitors * Using the Internet to facilitate relationship building and maintenance — Cisco Systems