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, publishing as Prentice Hall

The process of matching and combining

the capabilities of the supplier with the
desired outcomes of the customer to
create value for the customers
customer.

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Product

Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

The total offering is created by a

partnership between the buying
organization and the marketing
organization.
The process creates an augmented
product that is specific to the buying
units needs and maximizes the value
creation capabilities of the marketer.
Core Product
+ Financing Terms
+ Delivery Options
= Total Offering

Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

The mutually agreed-upon amount that

satisfies both sides in an exchange.
Often varies from fixed price, with more
special discounts and allowances (in
comparison to consumer markets.)
May involve things other than a one-time
price payment (such as commissions.)
Price is the measure
of value exchanged
and is determined
by the marketnot
by costs.
Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

Place is about getting the product to the

customer in order to maximize economic utility.

Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

Business-to-business marketing requires a

different emphasis on different parts of the
promotional mix
Consumer

V.S.

Emphasis is frequently
on advertising.
Communication with
customers is often a
monologue.
Relationship is often
brief.

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Business to Business

Emphasis is frequently
on personal selling.
Communication with
customers should be a
dialogue.
Relationship is often
long-lasting.

Business
to
Business

Consumer

Geographically
Dispersed
Mass Market;
Many Buyers
Monopolistic
Competition

Geographically
Concentrated
Relatively Few
Buyers
Oligopolistic
Competition

Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

Business
to
Business

Consumer

Standardized
Service, delivery and
availability only
somewhat important
Purchased for
personal use

Can be technically
complex
Customized to user
preference
Service, delivery and
availability very
important
Purchased for other
than personal use

Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

Business
to
Business

Consumer

Individual purchasing
Family involvement,
influence
Social or psychological
motives predominate

Professionally trained
purchasing personnel
Functional involvement at
many levels
Task motives
predominate

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10

Consumer

Less technical
expertise
Nonpersonal
relationships
Little personal
information exchanged
Changing, short-term
relationships
encourage switching

Business
to
Business

Technical expertise is an
asset
Interpersonal
relationships between
buyers and sellers
Significant personal info
exchanged
Stable, long-term
relationships encourage
loyalty
11
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Consumer

Indirect, multiple
relationships
Little or no customer
supply chain
involvement

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Business
to
Business
Shorter, more direct
Organization
involvement as part of
supply chain

12

Business
to
Business

Consumer

Emphasis on advertising,
monologue
Companies compete for
visibility and awareness of
consumer market

Emphasis on personal
selling, dialogue
Most communications
invisible to the consumer
Consumer is seldom
aware of BtB brands and
companies

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13

Consumer

Usually list or
predetermined prices

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Business
to
Business

Complex purchasing
process or competitive
bidding, depending on
purchase type

14

Consumer

Direct
Elastic
Less volatile

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Business
to
Business
Derived
Inelastic (short run)
Volatile (leveraged)
Discontinuous

15

Nothing happens unless consumer buys something

Acceleration Principle: Bullwhip Effect

1. Suppliers forecast
production on existing
order rates.

2. If consumer demand
drops, the order rate
also drops.

3. Supply chain members are then likely to overcompensate the

difference between the old and new forecasts, because:
A.
B.
C.
D.

Inventory levels can decline to fit new order rate

Customers change orders frequently
Minimum order quantities may exist
Trade promotions may influence buying patterns

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16

Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

17

International Standards Organizations (ISO)

Define technical performance for
manufacturing and quality systems
Compliance of suppliers to these standards
is required by global firms
Industries that are targeted:
Steel, Plastic, Pulp and Paper Products,
Chemicals and Electronics

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18

Total cost of owning or using a product

Transportation, carrying costs, financing

costs, potential obsolescence, cost of failure,

installation, flexibility to upgrade, etc.

Consumers have same considerations

but are attracted to Deals

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19

The puzzle of the B2B Consumer needs

Total
Offering
Product
Service
Image
Availability
Quantity
Evaluated
Price

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20

Copyright 2011 Pearson Education, Inc., publishing as Prentice Hall

21

Value Chain: Suppliers

Value
Activities
Value
Value
Enabling Creating

Value
Activities
Value
Value
Enabling Creating

Value
Activities
Value
Value
Enabling Creating

From Exhibit 1-5: Value Enabling activities

include infrastructure, human resources,
procurement and technology/technology
development. Value Creating activities include
inbound and outbound logistics, operations,
marketing and sales and customer service.
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22

Perceives
ar
M

Infrastructure
Human resources
Procurement
Technology &
technology development

n
gi

Offering:

h
ug
ro
th
e
lu
va

Support activities

Added value
Direct activities
u
s
al
ic
es e
v
l
t
is
sa rvic
is
gh
g
g
u
o
&
s
e
l
o
lo
s
n
d
ng er
hr
d
io
n
i
t
t
t
n
u
a
e
n
m
ou
er
bo
rk sto
gi
t
b
r
p
a
u
a
O
In
M Cu
O
M
s
tic

Product
Service
Image
Availability
Quantity
Evaluated Price

Target
Customers

Creates

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23

Hyper-competition
Formation of partner networks
Adoption of technology and the internet
Supply Chain Management
Time Compression

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24

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission
of the publisher.
Printed
in the United
States of
America.
Copyright
2009
Pearson
Education,
Inc.

Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall

1-25

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall