Definition Business marketing The marketing of goods and

Definition Business marketing =The marketing of goods and services to commercial enterprises, governments and other nonprofit institutions -For use in goods and services that they, I turn produce or -For resale to other industrial customers

Definition 2 • 2 essential aspects -type customer -intended usage of theory and application theory based on a short case story

Type of customers • Government • Institutions • Companies -users -OEM’s(origin. equipment. nanuf. ) -distributors Different buying behaviors

Intended usage -Manufacturing -Trade

Differences BM_CM • Market structure -number of clients and suppliers -concentration more geographical concntr) -international • Nature of demand -derived demand( determined by the consumer demand) -inelastic (BM) -acceleration-effect (outsourcing)

Differences BM-CM 2 • Baying behavior -professionals -motives: rational vs. emotional -purchasingproces, buying teams -relations -size and frequency of purchases • Marketing instruments - 2 additional p’s - Different composition of mark. mix

Type of product • Capital goods : equipment + systems • Materials -raw materials -processes materials -components • Usage goods MRO’s (maintenance rapid office suppliers) • Services

Marketing on business markets 1 • Marketing philosophies: 5 x • When market oriented: - customers and his needs as starting point -Market scanning, marketinfo -internal circulation of info -competitors -segmentation/target group -adapt to changes in market

Marketing on business markets 2 • Market orientation, based on 2 concepts: -external focus on relevant market parties (who is customer? marketing system/competition/suppliers etc. ) -Internal focus on international coordination (coordination with ‘non marketing” departments/informing, involve others )

Introduction market orientation • • Change of culture Mentality Resistance Teambuilding Support top management Communication Project groups

Transactions and relations • B/M/ = relationmarketing (personal contact, networking, cooperation) DIFFERENSES Transaction and Relationmarketing -”always a share” vs. “always lost” -Low vs. high cost of change -Low vs high risk in case of wrong buy -Emphasis on product, person vs. technology, supplier -Purchase less vs. very important

Buying behavior • • - Basis business marketing Subjects: - Buying process Buying situation DMU and PSU Purchasing portfolio and purchasing strategies - Supplier management

Buying process • Product and market technical phase -problem recognition -specs determination -search for potential suppliers -quotations • Commercial phase -Negotiations, choice, contract • Administrative phase -order monitoring, evaluation, feedback

Buying situations • New task • Modified rebuy • Straight rebuy

Buy grid model • Combination buying process and buying situations • Determination marketing strategy -Questions buy grid (combination important? Which departments c. q. persons involved? Which roles c. q. functions? Sources of information? )

DMU – PSU • DMU: all persons involved in purchase. Role: initiator/user/influencer/buyer/decider/gatekeeper/ • PSU: - Team of specialists at seller’ side -adjust to level in DMU –Tend to closer cooperation -Coordination

Buying motives • Task oriented • Non-task objectives

Buying strategies • • Strategic products: partnership Leverage products: competitive bidding Bottle neck products: security supply Routine products: system contracting

Supplier Management • Changing character purchase: more strategic -less suppliers -Character of relation -more professional • Consequences for marketing policy suppliers

Market Research • No fundamental BM-CM • 3 main differences -derived demand -concentration of demand -DMU and buying process

Characteristics research BM • Secondary data (desk) -more usage of secondary data -sources : internal/external -Standard Industrial Classification (SIC) - (SBI)

Characteristics Research BM • Collection primary data (field) -mainly qualitive research to find complex, buying motives -personal interviews - Technical knowledge required - Size of sample

Market segmentation • Dividing market into groups of potential customers who are similar in needs, expectations, are response to marketing stimuli - Characteristics buyers - Criteria

Requirement segmentation • • • Homogeneous Reachable Size Measurable Accessable

Segmentation Criteria • Macro level (- organizational characteristics: SBI-code/size, usage/product application/geographical location. -Characteristics buying decision: buying situation/phase of buying process) • Micro level (- DMU characteristics: roles, decision procedures/ buying criteria/purchasing strategy. -Characteristics DMU – members: function, experience/ loyalty to supplier/ life style, personality/ age, sex, education, etc.

Product levels • Core products (why is the customer buy? ) -BM: solutions for problems • Tangible products (components, packaging, design) • Augmented(Service, delivery time)

Quality • Product orientation • User orientation • Production orientation

Types of product • • Catalogue products According specification Tailer made (unique product only for 1) Services

Service • Characteristics -untangible -production and consumption at the same moment -heterogeneous -no stock -no property (of client)

Service • Pre sale service • Transaction related service (customer service) • After sales service

Service BM-CM • • Tailor-made Large technological component Production at site of customers More emphasis on business than person

Distribution • Most strategic marketing instrument • Functions distribution channel • Main aspects distribution policy

Design Channel structure • Distribution objectives (depends on marketing and goals/ availability/ lowest costs/ max. control/ max. saleseffort/ optimal back up/positive image/market feedback) • Limitations and conditions (right intermediates available? / product characteristics/ customer needs/ budget/strategy competition/ geographical distribution clients/ tradition) • Channel tasks (commercial/ financial/ logistical) • Channel alternatives (length channel/number of levels/type intermediate-agent or industr. distributor/number of distr. /#of chaneel • Evaluation and choice

Direct&Phisical distribution • Direct: (limited # of clients/ geographical concentration/large orders/high margin/ specialistic support required/JIT (just in time you need it) delivery • Physical: (Logistic management=materials management + physical distribution/ trade offs/ customer services/ make or buy (financials&commercials reasons, personal and equipment))