Business Marketing Chapter 6 PDF

Chapter 6 Business Marketing Adapted for the fifth Canadian edition by Janice M. Shearer, Consultant Learning Objectives 6-1 Describe business marketing 6-2 Explain the differences between business and consumer marketing 6-3 Summarize the network and relationships approach to business marketing...

Chapter 6 Business Marketing Adapted for the fifth Canadian edition by Janice M. Shearer, Consultant Learning Objectives 6-1 Describe business marketing 6-2 Explain the differences between business and consumer marketing 6-3 Summarize the network and relationships approach to business marketing 6-4 State the fundamental aspects of business marketing 6-5 Classify business customers 6-6 Identify aspects of business buying behaviour 6-7 Describe the ways in which business marketing has gone online Copyright © 2022 by Cengage Canada. What Is Business Marketing? • Business-to-business marketing • Active connection between businesses to ensure needs are met • Trust • Mutual respect • Achievement of one’s own company goals through cooperation • Relationships are critical because there are so few. Copyright © 2022 by Cengage Canada. DEFINITION Business versus Consumer Marketing Consumer Marketing •Active seller •Passive buyer* Business Marketing •Active seller •Active buyer Copyright © 2022 by Cengage Canada. Copyright © 2022 by Cengage Canada. Copyright © 2022 by Cengage Canada. Understanding Business-toBusiness (B-To-B) Business-to-business transactions are common in a typical supply chain, as companies purchase components and products such as other raw materials for use in the manufacturing processes. Finished products can then be sold to individuals via business-to-consumer transactions. Copyright © 2022 by Cengage Canada. Business Marketing “What makes B-to-B different from consumer marketing is the complex nature of relationships and interactions that form a buying process and customer life cycle that lasts months or years. It involves a network of individuals from buyer, seller, and even third-party partners who have different needs and interests.” —Canadian Marketing Association Copyright © 2022 by Cengage Canada. The Network and Relationships Approach to Business Marketing • Relationships in Business Marketing RELATIONSHIPS Cooperation Trust Commitment Copyright © 2022 by Cengage Canada. Key statistics: Kurve.com • 70% of B2B marketers rely on lead conversion as a content marketing performance metric. • Businesses with more personalized marketing grew 60% more than one with little or no personalization. • 97% of marketers use content marketing as part of their marketing strategy. • 84% of B2B businesses already use advanced analytics tools to manage content. • 93% of B2B businesses find LinkedIn the most effective in content distribution. • The B2B E-commerce market is projected to attain a value of $47,772.6 billion by 2030, with an estimated annual growth rate of 11.8% from 2021 to 2030. • 90% of B2B buyers research 2-7 websites before making a purchase. • B2B buyers engage with 3-7 pieces of content before talking to a sales rep, and 11% said they consume over 7 pieces of content. • 90% of B2B buyers turn to online channels as their primary method for identifying new suppliers. • 67% of B2B buyers start their purchase journey online. Copyright © 2022 by Cengage Canada. Copyright © 2022 by Cengage Canada. The Network and Relationships Approach to Business Marketing • Relationships in Business Marketing Relationship Commitment • Belief—relationship is so important—maximum effort • Breakdown in commitment—reduction in relationship Trust • Goal congruence • Compatible business = shared vision reached Copyright © 2022 by Cengage Canada. The Network and Relationships Approach to Business Marketing Interaction in Business Marketing • Not one-off interruptions • Interaction is about engaging with the customer and creating content and experiences the customer will share with others. Copyright © 2022 by Cengage Canada. The Network and Relationships Approach to Business Marketing The network approach differs from the • sales approach—generate leads and new business through persuasion • marketing management approach— develop a product and market it (passive consumer) • network approach—research the factors and forces around a firm— understand the environment • Companies in a network can then develop relationships over time, working together to achieve common goals. Copyright © 2022 by Cengage Canada. The Network and Relationships Approach to Business Marketing Copyright © 2022 by Cengage Canada. The Network and Relationships Approach to Business Marketing Copyright © 2022 by Cengage Canada. Fundamental Aspects of Business Marketing Types of Demand • Derived: Demand is determined by the demand for the final product. • Inelastic: With regard to price • Joint: Demand for parts within final product are tied to each other. • Fluctuating: Less stable demand; multiplier effect Copyright © 2022 by Cengage Canada. Fundamental Aspects of Business Marketing— Other Number of Customers • Far fewer customers • Much easier to identify them • Each one crucial to success Location of Buyers • More geographically concentrated • By industry Type of Negotiations • Trust results in buying from each other • Not unethical nor illegal, provided no coercion Copyright © 2022 by Cengage Canada. Fundamental Aspects of Business Marketing— Other Use of Reciprocity Use of Leasing • Trust results in buying from each other • Not unethical nor illegal, provided no coercion • Very common to reduce capital outlay • Creates relationship • Builds network Copyright © 2022 by Cengage Canada. Fundamental Aspects of Business Marketing— Other Types of Business Products Major Equipment Accessory Equipment Raw Materials Copyright © 2022 by Cengage Canada. Component Parts and Materials Supplies Services Services: Not necessarily part of the final product, but do have an impact on the customer’s willingness to buy and maintain a relationship Copyright © 2022 by Cengage Canada. Classifying Business Customers—Major Categories Producers Resellers • Profit-oriented • Retailers and individuals and wholesalers organizations that • Buy to resell use purchased product and services • In other products or in their operations Copyright © 2022 by Cengage Canada. Classifying Business Customers – Major Categories Governments Institutions • Largest single segment for goods • Seek to achieve goals other than and services standard business goals • Contracts put out for bid • Other than MASH, includes • Allows all suppliers a fair chance places of worship, labour unions, • Federal government civic clubs, foundations, fraternal • Municipal, academic, social, and organizations hospitals (MASH) Copyright © 2022 by Cengage Canada. Classifying Business Consumers • Classification by Industry • More-detailed classification: North American Industry Classification System (NAICS) Copyright © 2022 by Cengage Canada. Business Buying Behaviour Buying Centre Membership and influence vary. Number of people varies—complexity and importance Copyright © 2022 by Cengage Canada. Composition can change. Business Buying Behaviour Buying Centre Nature of buying—formal and professional Nature of buying influence—more people Copyright © 2022 by Cengage Canada. Roles—can be many Business Buying Behaviour Copyright © 2022 by Cengage Canada. Business Buying Behaviour Modified New task buy Straight rebuy Buying Situations Copyright © 2022 by Cengage Canada. Evaluative Criteria for Business Buyers Quality Service Copyright © 2022 by Cengage Canada. Price Business Marketing Online • Presents a great opportunity • E-commerce: Growth as security enhanced • Some numbers • 87 percent of Canadians made recent online purchase • 47 percent via their cell phone • Website presence is necessary Copyright © 2022 by Cengage Canada. Business Marketing Online • Four out of ten only sell, receive, or take orders online. • Why? • Data concerns • Lack of understanding • Hiring talent with the skill • Data breaches Copyright © 2022 by Cengage Canada. Business Marketing Online Copyright © 2022 by Cengage Canada. Copyright © 2022 by Cengage Canada. Business Marketing Online Trends • Growth of mobile • Importance of content marketing • As in the B2C market, B2B recognize the important role an online presence plays in achieving awareness. • Social media growth • A presence and a need to engage • LinkedIn: Great resource for HR looking to hire, lead generation—new vendors, customers, partners, and other business transactions Copyright © 2022 by Cengage Canada. Copyright © 2022 by Cengage Canada. Copyright © 2022 by Cengage Canada.