Business to Business Marketing and Industrial Distribution
Business to Business Marketing and Industrial Distribution DB 320
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This 5 page Class Notes was uploaded by Haley Hummer on Tuesday September 8, 2015. The Class Notes belongs to DB 320 at University of Alabama at Birmingham taught by Dr. Michelle Burn in Fall 2015. Since its upload, it has received 68 views. For similar materials see Distribution Management in Industrial Engineering at University of Alabama at Birmingham.
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Date Created: 09/08/15
Module 2 Business to Business Marketing Different Audience Different Strategies 0 Business Marketing Also known as industrial marketing business to business marketing B2B O 50 of all business school graduates join firms that directly complete in the business market 0 Because of interest in hightech markets and the size of industrial markets increased attention is being paid to business marketing management 0 Markets for productsservices O Brought by Businesses commercial customers government bodies and institutions 0 m incorporation consumption use resale 0 The business market is huge O Serves the largest markets of all 0 Dollar volume greatly exceeds the consumer market 0 Single customer can account for enormous levels of purchase activities I Ex GM s 1350 business buyers each purchase more than 50 million annually 0 Categories of business market customers 0 Commercial Firms OEM s Wholesalers and retailers O Governments federal municipal state county 0 Institutions unions foundations civic clubs nonprofits churches etc 0 What are business products 0 Used to manufacture other products Incorporated becomes apart of another product Consumed aids in the normal operations of the organization Resold are acquired for resale With out change in form I A product purchased for personal use is a consumer good I The key is in the products intended use 000 0 Products purchased in Business Market 0 Entering goods expense items that become part of the firms finished products 0 Raw materials farmnatural products 0 Manufactured materials and parts component materials and parts 0 Foundation goods capital items used by the firm to create the goodsservices of the firm business I Installations buildings land rights fixed equipment I Accessorv equipment light factory equipment and office equipment 0 Facilitating goods expense items that support the organizational operations I Supplie operating supplies maintenance and repair items I Business services maintenance and repair services business advisory services 0 The intended use not the physical product determines Whether a product is a consumer or a business product 0 Mr Clean used by the ultimate consumer to clean her house is a consumer product 0 Mr Clean used to clean a hospital or university is a business product 0 Some industrial products become consumer products Dell 0 B2B IBusinesses global large corporations smallmedium businesses IInstitutions healthcare and education IGovernment federal state local 0 Selected products pcs enterprise storage services complex services offerings O B2C individuals and households I Products pcs consumer electronics service agreements 0 Some consumer products become industrial products Smuckers O Smuckers sells jelliesj ams to ultimate consumers as household food products 0 Has a food service division sells to institutions restaurants etc 0 Also markets products as fillings and yogurt additives for other food manufacturing companies 0 Many companies successfully sell to both businesses and consumer markets 0 Business Markets vs Consumer Goods Marketers O Similarities IBoth benefit by employing market orientation INeed to understand and satisfy customer needs IAre market driven I Market driven firms demonstrate l A set of values and beliefs that places consumer interest first 2 An ability to generate disseminate and productivity use superior information about customers and competitors 3The coordinated use of interfunctional resources research and development manufacturing 39Market driven firms deliver value propositions create programs that include products services ideas and solutions to problems that offer value and provide opportunities for their customer 0 Differences Derived demand Fluctuations demand Stimulated demand Demand elasticity Global perspective Key buying in uential 39Relationship marketing Supply chain for snack foods 0 Metal forming equipment gtgtPackaging machinery manufacturersgtgtSnack food manufacturersgtgtconsumers Derived demand demand for industrial products is derived form the ultimate demand of the consumer 0 Business marketers must carefully monitor uctuation trends and patterns in consumer markets Fluctuation demand and the bullwhip effect because demand is derived an increase in consumer demand can create a uctuating demand for many industrial products 0 EX mortgagesgtgtneW home salesgtgt new household products Stimulating demand business marketers may stimulate demand for consumer goods 0 Pharmaceuticals aluminum Inelastic demand demand with out regard to price 0 An increase or decrease in the product price Will not significantly affect demand 39Gas prices 0 Many B2B products are inelastic in the shortrun must have the component parts but more elastic in the longrun redesign the product Global market perspective 0 Must look beyond US borders 0 Demand for industrial products is growing more rapidly than in the US Germany Japan and Korea 0 Enormous growth in developing countries Brazil China Russia India 0 Huge opportunities for large or small businesses 0 Key buying in uentials many others may be involved and long time to make decisions 0 Relationship marketing 0 Buyerseller relationships tend to be close and enuring in the B2B market 0 Definition all marketing activities directed toward establishing and maintain successful exchanfes With consumers 0 Building ltol relationships With customers is the heart to business marketing 0 Supply chain management linking manufactures With suppliers key intermediaries and customers to enhance efficiencies and effectiveness 0 As important as it is to gain customers it is just as important for manufacturers to develop strong relationships With suppliers Industrial Distribution 0 Marketing Strategies target market marketing mix 0 Product price place promotion 0 Place the part of the marketing mix that deals With marketing goods and services available in the right qualities and locations that customers 0 Channel of Distribution any series of firms or individuals participating in the ow of products from producer to final consumer Marketing Mix Challenges Product Limited availability to gain and hold competitive advantage Price Price wars erode profit margins and provide unstable basis for sustaining a competitive advantage Promotion Expensive and short lived Place Marketing channels supportenhance other Ps to meet demand of target marker 0 Distributors add value to manufacturers Provide market coverage and make sales contracts Hold inventory Process orders Offer customer support Gather market information 0 Distributors add value to customers 0 Assure product availability 0 Break bulk Offer assortment convenience Provide customer service Provide customer advice and technical support 0 What is industrial distribution 0 Wholesalers Who sells products to industrial customers rather than retailers