Professional Documents
Culture Documents
i t ale and G
V
dition
2002 E
Chapter 1
Introduction to Business-to-Business Marketing
Prepared by John T. Drea, Western Illinois University
1
The Marketing Mix:
The “4 P’s” of Marketing
Place
The
Product Marketing Price
Mix
Promotion
2
Marketing Mix: Product
3
Marketing Mix: Price
Price…
•is the mutually agreed-upon
amount that satisfies both
sides in an exchange. Price is the
•often varies from fixed price, measure of value
with more special discounts exchanged and is
and allowances (in determined by the
market (not by
comparison to consumer costs).
markets).
•may involve things other than
a one-time price payment
(such as commissions). 4
Marketing Mix: Place
• Business markets
– All organizations that purchase goods and
services to use in the creation of their own
goods and services.
• Business marketing
– The process of matching and combining
the capabilities of the supplier with the
desired outcomes of the customer to
create value for the “customer’s customer.”
7
The
1. Be
1. Becontextually
contextually
Marketing
marketsensitive
market sensitive
Concept
For a 2. Understand
2. Understandcustomer
customerneeds
needs
business-to-business
organization to
successfully practice 3.Meet
Meetcustomer
customer
3.
the marketing concept, needsininaaway
waythat
that provides
provides
needs
it should: valuetotothe
thecustomer
customer
value
4.Meet
4. Meet organizational
organizationalgoals
goals
8
Consumer Demand and Derived Demand
Business demand is
derived from
consumer demand.
Trees are demanded to make wood pulp
…because wood pulp is demanded to make paper
…because paper is demanded to produce books
…because the consumer demands books!
Price elasticity:
•It is the change in the quantity
demanded relative to the change in
price.
•When the price changes by X% and
demand changes by less than X%,
demand is described as inelastic.
Quantity Discounts
Increasesthe
Increases the
Complementary Products
complexityof
complexity of
business-to-business
business-to-business
Delivery Schedules marketing
marketing
Outsourcing 13
Value Chain
The Value Chain
•The chain of activities that creates
something of value for targeted customers.
Directactivities
Direct activities
contributedirectly
contribute directly
The value chain tothe
theoffering.
offering.
to
contains both
direct and
support Supportactivities
Support activities
activities. makesititpossible
makes possible toto
performthe
perform thedirect
direct
activities.
activities.
14
The Value Chain and Offering
Perceives
Infrastructure
M
Offering:
ar
Human resources
gi
n
th
Procurement
ro
u
Technology &
gh
technology development Product
va
lu
Support activities
Service Target
e
Added value
Direct activities Image Customers
ics es e al
u e Availability
it cs t l v
gi
s gi
s sa rvic gh Quantity
o s l o & e u
l n g rs ro
d io nd in th
bo
u n
er
a t
tb
o u
rk
et
to
m
e
rg
in Evaluated Price
I n p u a s a
O O M Cu M
Creates
15
Implications of the Value Chain
• The organization must understand its
prospective customers, what customers
perceive as valuable, and how prospects might
be persuaded to change their minds.
• Not all customers are alike. Customers can be
segmented on the basis of what they seek and
can afford.
• Direct and support activities are equally
important.
• The value chain extends from the customer
back thorough distribution channels,
manufacturers, suppliers and raw materials
suppliers. 16
Trends and Changes in Business Marketing