Chapter 1

A Business Marketing
Perspective

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Business Markets
Markets for products and services
Local to international
Bought by
Businesses
Government bodies
Institutions
For consumption
For use
For resale

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GE

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Types of Business Market

Customers
Commercial Customers

Institutional Customers

Governmental Customers

Manufacturers

Schools, colleges, universities

Federal Government

Construction Companies

Health-care organisations

- defence

Service Firms

Libraries

- Non defence

Transportation Companies

Foundations

State Government

Selected professional groups

Art Galleries

Local Government

Wholesalers

Clinics

- counties

Retailers

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- townships

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Business Market Customers

Commercial enterprise as customers

Manufacturers, construction companies, service firms,
transportation companies, etc
Manufacturing operations are concentrated, ie silicone valley, ftz
Government units as customers
Govt use 2 purchasing strategies
Formal advertising (open bid)
Negotiated contracts (goods/svs cannot be differentiated by
price alone)
Institutions as customers
A sizable market
Staffed with professionals

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Business Marketing Management

Products are served in both the consumer and
the business markets
Distinguishing feature from consumer goods: the
intended use of the product and the intended
customers.

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Business Markets vs Consumer

Goods Markets
Distinctive capabilities
Market sensing capabilities org equip to sense
change
Customer linking capabilities particular skills org
developed to create & manage c
Managing customers as assets
Firms nurture customer relationship management
capabilities
Emphasizing a profit focus
Partnering for increased value
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What makes a marketing leader?

The instigator capitalise on their close
connection
The innovator active role in reshaping co
The integrator builds bridges across multiple
functions / platforms
The implementer to translate plans into
actionable strategies

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Creating the customer value

proposition
Captures the particular set of benefits a supplier
offers to advance the performance of customer
organisation
Points of parity the value elements with
essentially the same performance
characteristics as the next alternative
Points of difference the value elements that
render the suppliers offering either superior
or inferior to the next best alternative
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Business Market Characteristics

Derived demand
Fluctuating demand patterns
Stimulating demand to reach out
Price sensitivity/demand elasticity
Global Market perspective
stretches beyond the boundaries

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Characteristics of Business Market

Consumers
Business market customers comprised of commercial
enterprises, instituitions and governments
A single purchase by a business customer is far larger
than that of an individual consumer
The demand for industrial products is derived from the
ultimate demand for consumer products
Buyer seller relationships tend to be close
Buying decisions are often involve multiple buying
influences, rather than single decision maker

Share the same job titles while serving both

business or consumer marketers
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The Supply Chain

Michael Porter and Victor Millar observed that to gain competitive

advantage over its rivals, a company must either perform these activities at
a lower cost or perform them in a way that leads to differentiation and a
premium (more value).
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Managing Relationships in the

supply chain
Generate timely market knowledge by segments
and by individual account
Customize product service packages for diverse
customer groups and
Capitalise on local field knowledge from sales
and service units to inform product strategy in
real time.

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Business Market Customer

Commercial Enterprises
Three categories:
Users
OEMs
Dealers and distributors

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Classifying
Goods for the
Business
Market

Classifying industrial goods by

the following questions:
How does the good or service
enter the production process?
How does it enter the cost
structure of the firm?
Source: Adapted from Philip
Kotler, Marketing
Management: Analysis,
Planning, and Control, 4th ed.
(Englewood Cliffs, N.J.:
Prentice-Hall, 1980), p. 172,
with permission of PrenticeHall, Inc.

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Procurement Trends
Longer term and closer relationships.
Closer interactions among multiple functions.
Supplier proximity considerations.

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A Framework for Business Marketing Management

Business marketing strategy
is formulated within the
boundaries established
by the corporate
mission and
objectives.

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The Internet Providing Goods & Services

Source: http://www.fao.com
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