Understanding Business Marketing
- the amount of sales for business-to-business products ultimately depends on
(is derived from) the consumer demand. Example: when Wii sales increase, so does the need for
materials, components, etc.
- products so necessary that a change in price has relatively little effect on the
The accelerator principle
- a small fluctuation (increase or decrease) in consumer demand has a
larger effect on business demand. Example: to save money consumers closely watch energy
consumption. Even a small drop in demand may be enough to force the plant to postpone the
purchase of multi-million dollar equipment.
Types of markets
- organizations that acquire goods and services that are then used to
product other goods and services, eventually creating finished products used by
consumers. Examples of organizations: fabricators, component manufacturers,
processors, original equipment manufacturers, designers. Purchase examples: raw
materials, component parts, processing equipment, transportation, consulting services.
- organizations that obtain and process raw materials, as in forestry
or mining. They acquire much of their supply from the earth. Purchase examples:
fertilizer and pesticides, seeds, heavy and light duty equipment, pipe, aircraft and
transportation, real estate mining rights, products for resale, loading of equipment.
- organizations that acquire or distribute finished products to businesses
or consumers. They play an important role in the “place” of the marketing mix. Examples
of organizations: retailers, wholesalers, dealerships. Purchase examples: computer
systems, building/real estate, advertising, transportation, warehousing, pharmaceuticals,
- a company that purchases a product and sells it in the same form for
profit. They have been gaining more recognition recently. In many cases, resellers
repackage products to suit the needs of particular market segments.