B2B Chapter 1 – Business Marketing Perspective

Business Markets:
Markets for product and services from local to international bought by businesses, government bodies, and institutions used for incorporation, consumption, use, and resale.
Business Markets and Consumer-Goods markets both:
– Benefit from market orientation
– They need to understand and satisfy customer needs
– They are both market driven
Market Driven Firms Demonstrate:
– A Set of values and beliefs that places customers’ interests first
– An ability to generate, disseminate, and productively use superior information about customers and competitors.
– The coordinated use of inter-functional resources
– View customers as an asset
Market Sensing Capability:
A company’s ability to sense change and to anticipate customer responses; spot changes and react well in advance of their competitors
Customer linking:
Comprises particular skills, abilities, and processes a company has developed to create and manage close customer relationships
Customer Value Proposition:
Captures the particular set of benefits that a supplier offers to advance performance of the customer organization
Best Practice Suppliers…
Base their value proposition on the few elements that matter most to target customers, demonstrate the value of superior performance, and communicate it in a way that conveys a sophisticated understanding of the customer’s business priorities.
Points of Parity:
The value elements with essentially the same performance characteristics as the next best alternative
Points of Difference:
The value elements that render the supplier’s offering either superior or inferior to the next best alternative
Key buying influentials:
Those who have power in the buying process
Market Driven Companies…
Create programs that include products, services, ideas, and solutions, to problems that OFFER VALUE and PROVIDE OPPORTUNITIES for their customers.
Business and Consumer marketing differ in:
1. Nature of their markets
2. Market Demand
3. Buyer Behavior
4. Buyer-seller relationship
5. Environmental influences
6. Market Strategy
Meeting Performance Standards Means to:
Develop and Nurture CRM capabilities by identifying, initiating, developing, and maintaining profitable customer relationships.
Professional marketers FOCUS ON PROFITABILITY:
Understanding forces that affect profitability, and aligning resource allocation to revenues and profits that will be secured by future business.
Professional marketers PARTNER WITH CUSTOMERS:
B2B Markets don’t just sell to customers, they develop a form of partnership for the purpose of serving and adding value for their customer
B2B marketers act as an __________________.
Integrator between various functional areas within the company including:
– Manufacturing
– R&D
– Customer service
– Accounting
– Logistics
– Procurement
Acquiring, buying goods, services or works from an external source.
It is favourable that the goods, services or works are appropriate and that they are procured at the best possible cost to meet the needs of the acquirer in terms of quality and quantity, time, and location.
Derived Demand
“The Demand for business products” – The demand for industrial products is derived from the ultimate demand for consumer products.
Characteristics of Business Markets:
Derived Demand
Fluctuating Demand
Stimulating Demand
Price Sensitivity (Demand Elasticity)
As a result of “Derived Demand”…
B2B marketers must carefully monitor fluctuating trends and patterns in consumer markets.
Fluctuating Demand:
Because demand is derived, an increase or decrease in consumer demand can create [this] for many industrial products.
(Demand for many industrial products tend to {} more than that of consumer products)
Simulating Demand
Sometimes, business marketers need to {} demand for consumer goods which either incorporate their products or are used to make consumer products.
Inelastic Demand
Demand without regard to price. An increase or decrease in the product price will not significantly affect the demand for the product. (Ex: Gasoline prices)
Relationship Marketing:
All marketing activities directed toward establishing, developing, and maintaining successful exchanges with customers.
Relationships between Business Marketers tend to be _____________.
Close and Enduring
B2B Buying Decisions:
Often involve multiple buying influences rather than a single decision maker.
B2B marketing is an important influence in the ______________.
Supply Chain
Supply Chain Management
This is a technique of linking a manufacturer’s operation with suppliers, key intermediaries and customers to enhance efficiencies and effectiveness.
The internet:
Plays an extensive role by allowing joint planning and execution in real time.(Supply Chain MGMT)
Managing relationships in the supply chain
As important as it is to gain customers, it is just as important for manufacturers to develop strong relationships with suppliers.
Three categories of Commercial Customers:
– Users
– Dealers and Distributers
purchase industrial products or services to produce other goods or services that are, in turn, sold in the business or consumer markets.
Profit oriented companies that produce products – OEM’s and subcontractors (Ex: 3M in USA)
Original Equipment Manufacturers (OEMs)
Individuals and organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers.

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