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Chapter 6

Chapter 6 - B2B Marketing

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Dave Ashberry

Chapter 6 B2B Marketing Business-to-business marketing refers to the process of buying and selling goods or services to be used in the production of other goods or services, for consumption by the buying organization, and/or resale by wholesalers/retailers.  Involves manufacturers, wholesalers, retailers, and service firms that market products and services to other businesses but not the ultimate consumer. The ultimate purchaser is a business. B2B Markets MANUFACTURERS OR PRODUCERS INSTITUTIONS  Some of the biggest B2B buyers  Hospitals, educational, prisons, religious org,  Buy raw materials, components, & parts for non-profit production GOVERNMENT RESELLERS  Central government one of the largest  Intermediaries that resell without altering form purchasers of P/S  Wholesalers, distributors, retailers Key Challenges of Reaching B2B Clients  Must master three key challenges: o First, to identify the right persons or decision maker within the organizations who can authorize or influence purchases o Second, must understand the buying process of each of its potential clients o Third, to identify the factors that influence the buying process of potential clients  Many companies have salespeople or a sales team dedicated to specific clients Differences Between B2B and B2C Markets Market Characteristics Product Characteristics Buying Process Marketing Mix Characteristics Characteristics Derived Demand – the linkage - Technical in nature. - More structured, - Salesperson is between consumers’ demand for - Purchased based on professional for large impt. company’s output and its purchase specifications. orders. - Physical of necessary inputs to meet that - Raw & semi-finished goods - Policies to guide buying. distribution. demand. purchases. - Qualified people - Advertising - Fewer Customers. - Emphasis on delivery time, purchase. technical. - Geographically concentrated. technical assistance, after - Firm and seller; reciprocal- Price negotiated, - Larger orders. sale service, financing buying arrangements. inelastic. - Demand is inelastic; fluctuates assistance. - Online buying is common. - Trade & quantity regardless of change in price. - Rigorous testing. discounts. B2B Classification System & Segmentation - NAICS codes is a classification scheme that categorizes all firms into a hierarchical set of six-digit codes.  Developed by Canada, U.S., Mexico to provide comparable stats about business activity in North America  Groups economic activity into 20 sectors & 928 Canadian Industries  Digits o First 2 = sector in economy o Fifth = specific subgroup within industry o Third = subsector o Full Six = country level or national o Fourth = industry group industry  Useful for B2B markets  analyzing market shares, demand for goods and services, import competition, segmenting and targeting markets  Segment customers based on end-use application, geographic location, and benefits sought by customers B2B Buying Process STAGE 1: Need Recognition  The buying organization recognizes, through either internal or external sources, that it has an unfulfilled need. STAGE 2: Product Specification  The o
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