Chapter 1 – Business Markets and Business Marketing

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Business marketing is marketing products or services to other companies, gov’t bodies,institutions, and other organizations. Ex.McD buy salt to use for its product. Business marketing also includes the marketing of products and services that facilitate their operations. Ex. McD buys paper for packaging of its food. Business marketing can also be to govt agencies and institutions that buy for their use.Ex. photocopy, tables and chairs. Business markets are all the organizations that buy goods and services for use in the production of other products and services or for the purpose of reselling or renting them to others at a profit. Companieshv awaken to the fact that they must be market driven if they are to survive.Mkt driven means that customer satisfaction and operational efficiency are the order of the day for every department and individual employee or associate;constant drive to serve organizational customers better, to innovate, and to develop the means to approach new institutional mkts. The magnitude of business markets is huge. Purchases by organizations such as companies, govt agencies and institution account for half of the economic activity in industrialized countries such as United States, Canada and France. Businesses’ purchasing power is bigger than a consumer’s purchasing power! The way organizations buy is different from the way consumers purchase products and services; which results in different marketing requirements.

A The Uniqueness of Business Marketing
1 Buyer-seller Relationships
2 Shorter distribution Channels
3 Emphasis on Personal Selling
4 Great Web Integration
5 Unique Promotional Strategies
5.1Consumption
5.2The customer’s Customer
5.3Marketing Research

1.0Buyer-seller Relationships
Many companies enter into long-term contracts, build relationships that enable buyers and sellers to plan jointly and work to secure the future for both companies. The strategic importance of many purchases is too great for companies to always shop around when making a purchase unlike individual customers like us. The purchases need to be fitting tocompany needs, the time needed and the right price. Hence, the long term contract!Refer: BASF case in book. 2.0 Shorter Distribution Channels

In most cases, distribution channels do not include anyone bet the mftr and the customer who uses the product, or the user. Many mftr sells directly to the user. Shorter channels contribute to the closer relationship bet mftr and the buyer. 3.0Emphasis on Personal Selling

Complex buying procedures involving many members of the buying org also requires personal selling. Only through personally getting to know each individual and coordinating the sales-purchase process can a business be successful. Multiple personal relationships can strengthen organizational relationships, and these relationships are the responsibilities of the salesperson. 4.0Greater Web Integration

The web has become impt to a supplier/customer comm network that enables customers to track shipment info, order products at prices and terms agreed to by the salesperson and buyer, and access other acct info that helps manage the supply process. BASF has special websites for their customers. The Web is fully integrated into their customer relationship strategy.Unlike consumer mktg, marketer must advertise to drive traffic to it. 5.0Unique Promotional Strategies

Business marketing has a complex buying process which includes several people frfrom different functional areas.This complex buying process has an impact on the mktg promotional strategies. Unlike consumer buying, decision is by one person usually; but in a purchase by an org,several different departments will together determine what the organization needs. Each different person or department hv separate needs and interests which influence how mkters promote their products. Ex. Promoting a product to Finance dept,promote on low cost;tomktgdept,promote on quality of product. Promotion also...
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