Introduction to Marketing Chapter 6

Introduction to Marketing Chapter 6 - Introduction to...

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Introduction to Marketing Lecture Notes Chapter 6 : Organizational Marketing and Buyer Behaviour I. Why study business marketing? Organizations spend a lot of money buying goods and services therefore marketers are interested in it. Services marketing are growing faster than manufacturing/product marketing. A lot of B2B marketing is marketing of services and more information is required in this area. A lot of emphasis is placed on understanding final consumer buyer behavior. Not much is known in-terms of business consumers’ needs, buying behavior etc. II. Nature of Organizational Markets Industrial Markets – who process raw materials into finished goods. There are 1.6 million firms in this category in Canada. Reseller Markets – wholesalers and retailers who resell products to final consumers. There are 133,000 wholesalers and 243,000 retailers in Canada. Government – The Federal and provincial governments are also large consumers of goods and services. The federal government spends $ 180 billion annually on buying goods and services on behalf of Canadians. Non Profit Organizations – Buy goods and services to provide services to others. Eg the United Way, the Canadian Cancer Society etc. III. Characteristics of Organizational Buying : How does the business market differ from final consumer market? The differences can be classified interms of 1. market characteristics 2. product characteristics 3. buyer process 4. distribution channels 5. promotional variables 6. pricing strategies Market Characteristics Greater sales volume – even if there are fewer business buyers than final consumer buyers the dollar volumes of purchase they make is of much higher value. Larger buyers - each buyer makes large volume and dollar value of purchases. Geographically concentrated Nature of business competition – there are often barriers to entry in many business markets because of technological superiority, large size of firms who dominate the market.
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Cooperative Competition – development of strategic alliances between competitors for mutual benefit. Derived Demand – business products demand is derived from demand for final consumer goods demand. o The accelerator principle – is when a small shift in final consumer’s demand for a product leads to a larger shift in demand for raw materials, component parts, equipment, and services needed to produce that product. o
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This note was uploaded on 04/22/2008 for the course MRKT, SOC, 1** taught by Professor Assorted during the Fall '07 term at Simon Fraser.

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Introduction to Marketing Chapter 6 - Introduction to...

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