CHAP 7 BUSINESS MARKETING Flashcards
Business marketing
Business marketing (also called industrial, business-to-business, B-to-B, or B2B marketing) is the marketing of goods and services to individuals and organizations for purposes other than personal consumption.
Trends in B-to-B Internet marketing
B-to-B companies use the Internet in three major ways. First, they use their websites to facilitate communication and orders. Second, they use digital marketing to increase brand awareness. Third, they use digital marketing—primarily in the form of content marketing—to position their businesses as thought leaders and therefore generate sales leads.
Discuss the role of relationship marketing and strategic alliances in business marketing
Relationship marketing is a strategy that entails seeking and establishing ongoing partnerships with customers. A strategic alliance, sometimes called a strategic partnership, is a cooperative agreement between business firms. Business marketers form strategic alliances to strengthen operations and better compete. Sometimes alliance partners are fierce competitors. Relationship commitment means that a firm believes an ongoing relationship with some other firm is so important that it warrants maximum efforts at maintaining it indefinitely. Trust exists when one party has confidence in an exchange partner’s reliability and integrity. Relationships between companies can develop into a keiretsu—a network of interlocking corporate affiliates.
Four major categories of business market customers
The business market consists of four major categories of customers: producers, resellers, governments, and institutions. The producer segment of the business market includes profit-oriented individuals and organizations that use purchased goods and services to produce other products, to incorporate into other products, or to facilitate the daily operations of the organization. Producers are often called original equipment manufacturers, or OEMs. Reseller markets consist of wholesalers and retailers that buy finished products and resell them for profit. A third major segment of the business market is government. Government organizations include thousands of federal, state, and local buying units. The fourth major segment of the business market consists of institutions that seek to achieve goals other than the standard business goals of profit, market share, and return on investment.
North American Industry Classification System
The North American Industry Classification System (NAICS) was introduced in 1997 to replace the standard industrial classification system (SIC). NAICS is an extremely valuable tool for business marketers engaged in analyzing, segmenting, and targeting business markets. NAICS codes can help identify firms that may be prospective users of a supplier’s goods and services.
Major differences between business and consumer markets
In business markets, demand is derived, inelastic, joint, and fluctuating. Purchase volume is much larger than in consumer markets, customers are fewer and more geographically concentrated, and distribution channels are more direct.
Seven types of business goods and services
Business products generally fall into one of the following seven categories, depending on their use: major equipment, accessory equipment, raw materials, component parts, processed materials, supplies, and business services.
Unique aspects of business buying behavior
Understanding how purchase decisions are made in organizations is a first step in developing a business selling strategy. Business buying behavior has five important aspects: buying centers, evaluative criteria, buying situations, business ethics, and customer service.
