mkt 5

Business Marketing Overview

  • Definition: Business Marketing, also known as B-to-B (Business-to-Business) marketing, focuses on the active connection between businesses to meet mutual needs through trust and respect.
  • Goals: Achieving company objectives through cooperation.
  • Importance of Relationships: Relationships are critical due to the limited number of customers, leading to a focus on trust, mutual respect, and commitment.

Business vs Consumer Marketing

  • Business Marketing Characteristics:

    • Active seller is engaged in the decision-making process.
    • Involves complex interrelations and longer buying processes (months or years).
    • Network of individuals (buyers, sellers, third-party partners) with varied needs and objectives.

  • Consumer Marketing Characteristics:

    • Active sellers but passive buyers, where the buying decision is less complex.

Relationship Commitment and Trust

  • Relationship Commitment: A significant aspect where both parties show effort to maintain a relationship. Breakdown in commitment can weaken the relationship.
  • Trust: Essential for achieving congruence in goals and maintaining a compatible business vision among partners.

Networks in Business Marketing

  • Types of Networks:

    • Network of buyers, sellers, and third parties.
    • Importance in generating leads, understanding the market environment and developing relationships.

  • Network Approach to Relationships:

    • Encourages cooperation as the value of the relationship becomes apparent over time.

Fundamental Aspects of Business Marketing

  • Demand:

    • Derived Demand: Business monitoring of consumer preferences to anticipate changes.
    • Inelastic Demand: Insensitivity of demand concerning price changes.
    • Joint Demand: Demand for interrelated products.
    • Fluctuating Demand: More volatile compared to consumer products, influenced by economic cycles and business trends.

  • Customer Characteristics:

    • Fewer customers but each is vital to business success.
    • More geographical concentration depending on industry types.

Buying Behaviour in Business Marketing

  • Personal Characteristics of Business Customers:

    • Producers: Entities that utilize products in their operations.
    • Resellers: Buy products for resale purposes.
    • Governments: Compete for goods and services through open bidding processes.
    • Institutions and Other Organizations: Aim to achieve specific goals beyond profit.

  • Buying Centres:

    • Consists of individuals involved in the purchase decision, influencing factors can vary based on the complexity of the purchase.
    • Composition and roles may shift throughout the buying process.

Roles Within the Buying Centre

  • Key Roles Defined:
    • Initiator: Person suggesting the purchase.
    • Influencers/Evaluators: Help define specifications and influence the decision.
    • Gatekeepers: Control the flow of information.
    • Decider: Authorized to approve selections of suppliers/brands.
    • Purchaser: Negotiates the purchase.
    • Users: Individuals who utilize the purchased product, often initiating the buying process.

Types of Buying Situations

  • Modified Rebuy: Revising existing orders.

  • New Task: First-time purchase of a product or service.

  • Straight Rebuy: Routine reorder of existing products/services.

  • Evaluative Criteria for Business Buyers:

    • Quality of the product/service.
    • Level of service provided.
    • Price competitiveness.

Trends and Innovations in B2B Online Marketing

  • Growth Factors:

    • Increase in mobile applications.
    • Expansion of content marketing (blogs, newsletters) to enhance company profiles.
    • Social media usage rising as consumers seek information and raise concerns.

  • Social Media Strategy: Establishing a policy to leverage social media effectively, with LinkedIn being a primary platform for B2B engagements.