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  • Business Marketing Fundamentals

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    Yandex Prithu
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    Business marketing involves marketing products and services to business customers rather than individual consumers. It focuses on creating customer value by providing benefits that exceed costs. While business and consumer marketing share basic tasks like identifying target markets and developing products to meet needs, business marketing differs in dealing with fewer, geographically concentrated buyers who prioritize functional and technical requirements over personal factors. Planning for business marketing also requires closer ties to corporate strategy and more cross-functional collaboration. Demand for business goods is derived from demand for consumer goods and tends to be more volatile.

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    Business marketing involves marketing products and services to business customers rather than individual consumers. It focuses on creating customer value by providing benefits that exceed costs. While business and consumer marketing share basic tasks like identifying target markets and developing products to meet needs, business marketing differs in dealing with fewer, geographically concentrated buyers who prioritize functional and technical requirements over personal factors. Planning for business marketing also requires closer ties to corporate strategy and more cross-functional collaboration. Demand for business goods is derived from demand for consumer goods and tends to be more volatile.

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    10 views11 pages

    Business Marketing Fundamentals

    Uploaded by

    Yandex Prithu
    Business marketing involves marketing products and services to business customers rather than individual consumers. It focuses on creating customer value by providing benefits that exceed costs. While business and consumer marketing share basic tasks like identifying target markets and developing products to meet needs, business marketing differs in dealing with fewer, geographically concentrated buyers who prioritize functional and technical requirements over personal factors. Planning for business marketing also requires closer ties to corporate strategy and more cross-functional collaboration. Demand for business goods is derived from demand for consumer goods and tends to be more volatile.

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    © All Rights Reserved
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    of 11

    1/1

    BUSINESS MARKETING

    Chapter 1

    The Nature of Business Marketing


    1/2

    Chapter Questions
    • What is business marketing?
    • What is customer value in business markets?
    • What are the differences between business and
    consumer marketing?
    • How planning is done in business marketing?
    • What are the concepts of industrial demand?
    1/3

    What is Business Marketing?


    Business marketing is marketing of products and
    services to business customers, such as private-
    sector and government organizations, institutions
    like hospital, hotels, and educational. Business
    customers buy products and services to produce
    other goods and services, make profits, reduce
    costs, and so on.
    1/4

    Customer Value in Business Markets


    Value or Customer Value is the economic, technical,
    service, and social benefits received by a customer
    firm in exchange for the price paid for a product or
    service offering.

    Value=Benefits divided by costs, or Benefits less


    costs.
    1/5

    Business Vs Consumer Marketing

    Similarity is in basic tasks, viz.:


    • Deciding target markets.
    • Finding target customers’ needs / wants
    • Developing products / services to meet
    requirements of target markets.
    • Evolving and implementing marketing plan to
    satisfy target customers better than competitors.
    1/6

    Differences : Business Vs Consumer Marketing


    Characteristics of business markets contrast with
    those of consumer markets.
    Characteristics Business Markets Consumer Markets
    • Market Geographically concentrated Geographically dispersed
    Fewer buyers Mass Markets
    • Product Technically complex No technical complexity
    Customized Standardized
    • Service Very important Somewhat important
    • Buyer Behaviour Functional involvement Family involvement
    Social / psychological
      Rational motives motives
      Technical expertise Less technical expertise
      Interpersonal relationships Non-personal relationship
    1/7

    Differences : Business Vs Consumer Marketing


    (Continued)
    Characteristics Business Markets Consumer Markets
    • Channel • More direct • Indirect
    • Fewer channel levels • Multiple channel levels
    • Importance to personal • Importance to
    • Promotion advertising
    • selling
    • Competitive /
    • Price negotiated • List prices or
    • prices
    • List prices for standard • Maximum retail price
    • products (MRP)
    1/8

    Planning in Business Marketing


    Compared to consumer marketing, planning in
    business marketing requires:
    1)Closer relationship to corporate strategy,
    involving capital investment and company wide
    implications.
    2)More functional interdependence, or other
    functions’ support including cross-functional
    teams.
    1/9

    Concepts in Industrial Demand


    Derived Demand
    Demand for business goods is derived from the
    demand for consumer goods.
    Fluctuating / Volatile demand / Acceleration
    effect
    Demand for business goods / services is more
    fluctuating or volatile than the demand for
    consumer goods / services.
    1/10

    Joint Demand
    It occurs when one industrial product is useful or
    needed if other product also exists.

    Cross – Elasticity of Demand


    It is the reaction or response of sales of one
    product to a price change in another product.
    1/11

    Reverse – Elasticity of Demand


    In this, a price increase can cause an increase in
    demand and a price decrease would be followed
    by a decrease in demand.
    These short-term reactions are opposite from
    what we would normally expect from business
    buyers.

    Bull - Whip Effect


    It is the tendency of buyers of a product in short
    supply to buy more than immediate need.

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