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 Commercial Non-Profit and
Enterprises Not-for-Profit
Organizations

Government
Units

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 I. Industrial Distributors
II. Value Added Resellers
III. Original Equipment Manufacturers
(OEM)
IV. Users and End Users

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  Provide 4 types of utility:
o Form, Time, Place, Possession

 Assortment of Products from many

manufacturers based on segment needs

 Serve smaller customers where direct

representation is not efficient
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  More than just a distributor

 Provides unique, complete offering

from many sources

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  Purchase products and incorporate
those products into their products
 Usually the largest-volume users of
goods and services

Ex: Intel is an OEM supplier to many

computer manufacturers. Goodyear is an
OEM supplier to the auto industry.

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  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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  Includes federal , state and local governments.

 These government units purchase everything

from wrenches to missile.

 May involve direct negotiation with vendors or

invitation to qualified suppliers.

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 Understanding Government Contracts
 Types of Contracts

 Fixed Price Contracts

 A fixed-price contract is a type of contract where the
payment amount does not depend on resources used
or time expended.

 Cost-Reimbursement Contracts
 A cost-plus contract, also termed a cost reimbursement
contract, is a contract where a contractor is paid for all
of its allowed expenses , plus additional payment to
allow for a profit
  Consumer grouping consists of:
o Hospitals
o Colleges
o Nursing Homes

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 Component
Parts and
Raw Material
Manufactured
Producers Materials
Producers

Accessory
Equipment Capital Goods
Suppliers Manufacturers

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 Raw Materials Producer

 Compete in price sensitive markets

 Product loses identity once

incorporated into customer’s product

 Dominated by a few very large

producers
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 Component Parts and Manufactured
Materials Producers

 Parts retain their same form when incorporated

 Retain identity when incorporated into

consumer’s product

 Customized components requires considerable

interaction between engineering departments' of
both buyers and sellers.

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 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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 Accessory Equipment Suppliers

 Equipment that works with another offering

 Accessories can be added to a bundle

opportunity by a channel intermediary

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 Industrial buyers and sellers operate in dynamic
environment, one constantly posing new opportunities and
threats.

 Adaptation strategies are not sufficient in today’s turbulent

environment.

 Marketers must adopt a proactive orientation.

 Publics

Macro-
environment
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  Communities of interested parties who
are not direct participants in a market
as customers, channel members,
suppliers or competitors.

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  Financial Publics
 Independent Press
 Public Interest Groups
 Internal Publics

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 Financial Publics
› It includes banks and other lending
institutions.

› They seek to maximize their own financial

performance by investing in companies
they think will perform best.
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  Independent Press
› Independent press is capable of publishing
news that can either boost or destroy the
reputation of a firm as well as the sales
potential of a product.

› Many industrial firms have experienced the

effects of negative publicity.

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  Public Interest Groups
› Industrial Marketing decisions are increasingly
affected by public interest groups.
› Hundreds of these groups have developed and
expanded over the last two decades.

 Internal Publics
› The reputation and the image of a firm or its
parts are greatly impacted by the attitude of its
employees

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 Demographic
Environment

Natural Legal and

Environment Political
Environment

Influence
Technological Value
Competitive
Environment
Creation Environment

Socio-cultural Economic
Environment Environment

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  The political environment includes international
trade restrictions , government attitudes towards
business and social activities , and government
funding of selected programs.

 Political decisions with regards to tariffs and

import quotas can have worldwide implications.
o Opium Wars

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 Government enables and facilitates , but also
hampers and disallows , industrial actions.

 Government does sometimes yield to advocacy in

the face of logic, to public opinion despite heavy
investment, and to the free press regardless of a
firm’s best intentions.

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Primary Functions of Government are to:
Protect companies from each other.

Protect consumers from unfair business practices.

Protect the larger interests of society against unrestrained business behavior.

Ameliorate income inequality in society.

Provide economic stabilization through control of unemployment and inflation.

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 The macroeconomy of a region is the sum total of
all economic activity in the area and certain
economic characteristics of the note.

 State of economy affects customers' willingness

and ability to buy.

 Emerging changes in the economic environment ,

both at home and abroad , must be closely
monitored.
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  Culture of the society has an impact on what people buy,
why they buy it and use it, how they buy, and how they
react to marketing stimuli.

 Business marketers must be aware of the cultural norms

and social trends affecting customers, competitors,
partners, and employees.

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  It includes natural resources, raw materials, the ecology, the
weather, and, on occasion, geologic activity.

 Disposal of waste materials from chemicals and pesticides has

created dangerously high levels of mercury in our oceans, DDT in
our soil and food supplies, and numerous toxic-waste dump sites.

 Industrial accidents generate stern consequences as government

tightens safety and environmental regulations.

 Examples: Union Carbide- Bhopal,India (1984) , Chernobyl Nuclear

Power Plant –Ukraine (1986) ,Ojhri Camp- Rawalpindi,Pakistan
(1988), and Baldia Town Garment Factory – Karachi, Pakistan (2012)

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  Demographics are vital statistics that describe a population
 Demographic variables include distribution of ages, incomes,
wealth, mobility, education, family composition, religion, ethnic
background and living conditions.

 Demographic characteristics of businesses

› Type and size of industries.
› Size and location of companies.
› Ages of the businesses.
› Size of functional areas within the companies.

 Marketers should be aware of the relevant demographics of the

population and businesses that comprise their environments.

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  Technological developments can dramatically change B2B
markets.

 Technological environment has been both a blessing and curse for

B2B marketers.

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 Influences value creation, behavior of
market participants

 All forms of competition can be found in

B2B markets
› Oligopolies are dominant
› 80/20 rule

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