Chapter 5 - B2B Marketing

5 Pages
Unlock Document

York University
Administrative Studies
ADMS 2200
Richard Patterson

Chapter Five Overview Business to business marketplace is, in fact, significantly larger. Worldwide business-to-business commerce conducted over the internet totals more than $2 trillion. This chapter discusses buying behaviour in the business or organizational market. Consumer buying involves purchases made by people like you and me. By contrast, B2B purchases are made by businesses, government and marketing intermediates to be resold, combined with other items to create a finished product for resale or used up in the day-to-day operations of the organization. Business market Business to business marketing is organizational sales and purchases of goods and services to support production of other products, for daily company operations, or for resale. Commercial market includes individuals and firms that acquire products to support, directly or indirectly, production of other goods and services. Trade industries are retailers or wholesalers that purchase products for resale to others. Resellers are marketing intermediaries that operate in the trade sector. Segmenting B2B market Customer-based segmentation is dividing a business-to-business market into homogeneous groups based on buyers’ product specifications. North American industry classification system is a classification used by NAFTA countries to categorize the business marketplace into detailed market segments. End-use application segmentation is segmenting a business-to-business market based on how industrial purchasers will use the product. Customer relationship management is a combination of strategies and tools that drives relationship programs, reorienting the entire organization to a concentrated focus on satisfying customers. Characteristics of the B2B Market include:  More concentrated than the consumer market  Fewer but larger customers  Purchase process more formal and complex; longer time-frame  Relationship marketing more important Business purchasing patterns differ from country to country. Global sourcing is purchasing goods and services from suppliers worldwide. It can bring significant cost savings but requires adjustments Derived demand is demand for a resource that results from demand for the goods and services that are produced by that resource. Joint demand is demand for a product that depends on the demand for another product used in combination with it. Inelastic demand is a demand such that, throughout an industry, will not change significantly due to a price change. Just-in-time is inventory practise that seek to boost efficiency by cutting inventories to absolute minimum levels. With JIT, suppliers’ representatives work at the customer’s facility. Sole sourcing is purchasing a firms entire stock of an item from just one vendor. To make, buy or lease decision Firms acquiring finished goods have three options: make, buy, or lease Offshoring is the movement of high-wage jobs from one country to lower-cost overseas locations Nearshoring is the movement of jobs to vendors in countries close to the business’s home country Outsourcing includes using outside vendors to provide goods and services formerly produced in-house Problems with offshoring and outsourcing include  Cost savings are less than expected.  Can raise security concerns over proprietary technology or customer data  Can reduce company’s ability to respond quickly to marketplace  Can create conflicts between nonunion outside workers and in-house union employees  Can negatively affect employee morale and loyalty The business buying process B2B buying decisions react to various influences,
More Less

Related notes for ADMS 2200

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.