Chapter 1 - BusinesstoBusinessMarketing Lecture1b

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Business-to-Business Marketing Lecture 1b Business-to-Business Markets and  Marketing
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Business marketing Business marketing is concerned with the marketing of  goods and services  to and among organizations ( B2B  transactions ).  The key distinguishing feature of business marketing is  the  differences in the   nature of the customer , rather  than the differences in the nature of the product.  Although there are products that are bought by both  organizations and consumers,  there are many more products that are bought only  by organizations  (e.g. raw materials) and not by  final consumers.  Lecture 1b: Business-2-Business Markets and Marketing 
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UPSTREAM DOWNSTREAM Mining  company (steel from  ore) Upstream  supplier (fasteners) Direct  supplier (radiators) Ford  Toyota  GM  Nissan  Honda Car  dealers Rental  agencies Car  buyers Traveler the supply chain Business Market Linkages: Lecture 1b: Business-2-Business Markets and Marketing  …… ……
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Terminology differences: Industrial Marketing  = 1 st  and 2 nd  level of economic activity  (e.g. agriculture, mining, goods’ manufacturers, etc.) Business-to-Business Marketing  = all levels of economic  activity, including the 3 rd  level (service industry) Business  marketing (BM)  B2B  ≠ B2C marketing Organizational  marketing (all business and non- business organisations, e.g. non-profit or public  organisations) Lecture 1b: Business-2-Business Markets and Marketing 
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Australia 1998 7850 5.6 25.4 69.0 2008 9048 4.9 22.0 73.1 Canada 1998 12572 4.2 24.6 71.2 2008 14910 3.3 22.6 74.1 Germany 1998 27946 3.4 39.8 56.8 2008 36978 2.7 33.4 63.9 Ireland 1998 1115 15.0 28.6 56.4 2008 1664 7.9 25.2 62.8 Japan 1998 62500 7.2 34.1 58.7 2008 64620 5.2 31.7 63.2 Total civilian  employment  (thousands) Agriculture % Industry % Services % Lecture 1b: Business-2-Business Markets and Marketing 
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Business markets (BM) can differ from consumer markets  along  three dimensions , with causal relationship within  each other:   Different  market structure , that leads to… Different  buying behaviour , that leads to… Different  marketing practice Lecture 1b: Business-2-Business Markets and Marketing  Question:  what is the most frequent promotion tool in BM? Answer:  personal selling (not advertising).  WHY? Note:  IT can bridge about B and C markets (e.g. CRM and web selling)
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MARKET STRUCTURE DIFFERENCES Sub-dimension Nature of demand……… Demand volatility Demand elasticity Reverse elasticity Nature of customers Market fragmentation Market complexity Market size Number of buyers / seller Number of buyers / segment Relative size of buyer / seller Geographic concentration Business marketing (BM) Derived                               
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Chapter 1 - BusinesstoBusinessMarketing Lecture1b

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