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Chapter 1
Introduction to Business
Marketing
www.dinhtienminh.net
DINH Tien Minh (Ph.D.)
University of Economics HCMC
Objectives
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Understand Business Market and Business
Marketing.
Distinct the differences between B2B and
B2C.
Know the different kinds of demand in
Business Market.
Content
1.1 Concepts of Business Market
1.2 Concepts of Business Marketing
1.3 Demands of Business Market
1.4 Conceptual Questions
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1.5 Homework
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1.1. Concepts of Business Market
What is Business Market?
All of the organisations who buy goods and/or
services for producing their own goods and/or
services.
Krishna K Havaldar (2010), Business Marketing, McGraw Hill, 3rd edition, p1.
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1.1. Concepts of Business Market (cont’)
Business organizations include:
Commercial market: the Firms that acquire
products to support, directly or indirectly,
production of other goods and services. This is
the largest segment of the business market.
Trade industries: Retailers or wholesalers that
purchase products for resale to others.
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Business organizations include (cont’):
Government: all domestic levels (federal, state,
local) and foreign governments.
Public and private institutions: such as hospitals,
churches, colleges and universities, and museums.
1.1. Concepts of Business Market (cont’)
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Characteristics of Industrial Market:
Geographic market concentration
•Business market is more concentrated than consumer
market and becomes less geographically concentrated as
Internet technology improves.
Sizes and number of buyers
•Business market has smaller number of buyers than
consumer market.
•Many buyers are large organizations, such as Boeing,
which buys jet engines.
1.1. Concepts of Business Market (cont’)
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Characteristics of Industrial Market (cont’):
The purchase decision process
•Sellers must navigate organizational buying processes
that often involve multiple decision makers.
•Purchasing process is usually more formal than in
consumer market and may require bidding and
negotiations.
Buyer-seller relationships
•Often more complex than in consumer market.
•Greater reliance (trust) on relationship marketing.
1.1. Concepts of Business Market (cont’)
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Characteristics of Industrial Market (cont’):
Evaluating international business markets
•Business purchasing patterns differ from country to
country.
•Global sourcing purchasing goods and services from
suppliers worldwide.
–Can bring significant cost savings but requires adjustments.
1.1. Concepts of Business Market (cont’)
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Customer value in Business Markets:
The economic, technical, service and social benefits
received by a customer firm in exchange for the
price paid for the product or service offering.
Anderson and Narus, Business Market Management, Pearson Education,
2nd edition, p5-9.
A ratio between what the customer gets (functional
and emotional benefits) and what he gives
(monetary, time, energy cost).
Philip Kotler, Marketing Management, Prentice Hall India, 11th edition,
p11-12.
1.1. Concepts of Business Market (cont’)
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Customer value in Business Markets (cont’):
Accurately estimating value would help the
supplier firms to create and deliver value to
targeted market segments and customers. Here are
some methods:
•Focus group
•Customer interview
•Internal test (conduct laboratory test)
1.1. Concepts of Business Market (cont’)
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What is Business Marketing?
1.2. Concepts of Business Marketing
R S.T.P MM I C
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Marketing Mix
Product
Place
Personal
selling
Price
Promotion
Advertising
C/T
Promotion
Direct
Marketing
PR
Press
Meeting
Event/
Launching
Charity/
Sponsor
Crisis
Evaluation
1.2. Concepts of Business Marketing (cont’)
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What is Business Marketing? (cont’)
Organizational sales and purchases of goods and
services to support production of other products, to
facilitate daily company operations, or for resale.
Companies also buy services, such as legal,
accounting, office-cleaning, and other services.
Lau Geok Theng (2007), Business Marketing –An Asian Perspective,
McGraw Hill, p3.
1.2. Concepts of Business Marketing (cont’)
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The importance of Business Marketing
The business market occupies several layers of the
value chain in comparison to the consumer market,
which often occupies one layer.
Metal plastics
•Business
market
Electronic
components
•Business
market
Printed circuit
boards
•Business
market
Televisions
Computers
•Consumer
market
•Business
market
Lau Geok Theng (2007), Business Marketing –An Asian
Perspective, McGraw Hill, p4.
1.2. Concepts of Business Marketing (cont’)