Introduction to

Business-to-Business
(B2B) Marketing
 What Is 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
Institutions (i.e. hospitals)
Non-Profit Organizations (i.e. American Red Cross)
FOR
USE IN PRODUCING THEIR PRODUCTS
AND/OR TO FACILITATE THEIR OPERATIONS
What Distinguishes B2B from B2C?
B2B: goods or services are sold for
any use other than personal
consumption
Note: It is not the nature of the
product; it is the reason for the
transaction.
Is it a B2C or a B2B Transaction?
You buy a gear to fix your mountain
bike.
Ford buys the same gear to fix a
machine.
Xerox buys soft drinks for its cafeterias.
You start a landscaping business and
purchase a lawnmower.
The U.S. government buysanything.
 B2B versus B2C Marketing
Characteristic B2B Market B2C Market
Sales volume Greater Smaller

Purchase volume Greater Smaller

Number of buyers Fewer Many

Size of individual buyers Larger Smaller

Location of buyers Concentrated Diffuse

Buyer-seller relationship Closer More Impersonal

Nature of channel More direct Less direct

Buying influences Multiple Single/Multiple

Type of negotiations More complex Simpler

Use of reciprocity Yes No

Use of leasing Greater Less

Key promotion method Personal Selling Advertising

 BUSINESS TO BUSINESS:
IT IS ALL ABOUT DEMAND

DERIVED DEMAND
The demand for a companys products comes
from (derived) the demand for their customers
products.
Most demand comes from consumers.

JOINT DEMAND
Two products are used together and demanded
together Both products are consumed at the
same time
Other Characteristics of Business Demand

Inelastic Demand
Fluctuating Demand
 Major Uses of B2B Products
For additional 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 resale
 Classifying Business Goods & Services
3 Main Categories of Products
Entering Goods
Become part of the finished product
Cost assigned to the manufacturing process
Foundation Goods
Capital Items
Typically depreciated over time
Facilitating Products
Support organizational operations
Handled as overhead expenses
 Classifying Business Goods & Services
Entering Goods
Raw Materials
Farm products & natural products
Only processed as necessary for handling & transport
Require extensive processing
Manufactured Materials & 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
Installations
Major long-term investment items
Buildings, land, fixed equipment, etc.
Accessory Equipment
Less expensive & short-lived
Not considered part of fixed plant
Portable tools, PCs, etc.
 Classifying Business Goods & Services
Facilitating Products
Supplies
Any supplies necessary to maintain the
organizations operations
Services
Maintenance & Repair support
Advisory support
Logistical support
 Categories of B2B Customers
Commercial enterprises
Indirect channel members and
facilitators
OEMs (original equipment
manufacturers)
Users = customers
Governmental organizations
Institutions