Business Marketing Management University of Mysore Fourth Semester

Murali S RIMS, Bangalore

BMM- Overview
Business(Industrial) marketing (B2B), which some marketing experts have described as a 'sleeping giant', has

been the subject of very little research. And this despite the
fact that it generates higher volumes of sales than

consumer marketing.
This Course is an attempt to create interest in this

challenging yet not much talked about subject. Several developments have transformed industrial marketing in the last few years:

BMM- Overview
Technology has become the cornerstone of Business
marketing. New product technologies are emerging and manufacturing processes are evolving. Information

technology is being leveraged to develop new products and services, in addition to streamlining operations.

The Internet has revolutionized Business marketing. It has

helped bring down the communication costs between the industrial marketers and other stakeholders drastically. E-procurement and E-marketplaces have gained popularity among organizational buyers.

BMM- Overview
The nature of competition has undergone a sea change in the business marketplace. Industrial marketing has reached a stage where we can say, "The Business Network is the Business Strategy." Today, competition is between value-chain partnerships rather than between industrial firms From the 1990s, the Government of India has been supporting liberalization by taking various positive measures, including the permitting of foreign direct investments in capital intensive industries. In addition to setting up joint ventures and subsidiaries, many firms have adopted the outsourcing route. India's progress on both the domestic and export fronts has resulted in a growing demand for professionals to market industrial products, services, and solutions to a wide range of industries.

Nature of Industrial marketing- Learning Objectives

1. To know what is industrial or business marketing 2. To know what are the differences in characteristics of industrial & consumer marketing 3. To learn why the demand for Industrial goods & services are generally called derived demand

Business Marketing(BM)
1. BM is the marketing of products & services business organization 2. Business organizations include manufacturing companies, government undertakings, private sectors organizations 3. The above organizations buy products & services to satisfy many objectives like: Production of other goods & services Making profits Reducing costs etc

Business Products A product bought for resale, for making other Business Products:
Raw Materials Major Equipment Accessory Equipment Component Part products, or for use in a firms operation Process Material Supply Business Service

Business Products
Raw Materials Is a basic material that actually becomes part of a physical product. It usually comes from mines, forests, oceans, or recycled solid wastes. Raw materials usually are bought and sold according to grades or specification.

Business Products
Examples of Raw Materials are : 1. 2. 3. 4. 5. Gravel Trees Aluminum Wood Copper

Business Products
Major Equipment Includes large tools and machines used for production purposes. Some major equipment is custom-made for a particular organization, but other items are standardized products that perform one or several tasks for many types of organizations.

Business Products
Examples of Major Equipment are : 1. 2. 3. 4. Cranes Bulldozers Furnaces Dump Truck

Business Products

Accessory Equipment Is standardized equipment used in a firms production or office activities. Compared with major equipment, accessory items are usually much less expensive and are purchased routinely with less thought.

Business Products
Examples of Accessory Equipment are : 1. Hand tools 2. Computers 3. Calculators

Business Products
Component Part Is part of a physical product and is either a finished item ready for assembly or a product that needs little processing before assembly.

Business Products
Examples of Component Parts are : 1. Tires 2. Computer chips 3. Switches

Business Products

Process Material Is used directly in the production of another product. Unlike a component part, a process material is not readily identified in a finished product. Like component parts, process materials are purchased according to industry standards.

Business Products
Examples of Process Material are : 1. Food Preservatives 2. Industrial Glue

Business Products
Supply Facilitates production and operations, but it does not become part of the finished product. Examples of Supply are : 1. Paper 2. Pencil 3. Oil 4. Cleaning Agents

Business Products
Business Service An intangible product that an organization uses in its operations. Purchasers must decide if they want to do their own services or to hire them from outside the organization.

Business Products
1. 2. 3. 4. 5.
Examples of Business Services are : Financial Rubbish Marketing/Advertising Janitorial Legal

Consumer Marketing (CM) CM is the marketing of products & services to individuals, families & households The consumers buy products & services for their own consumption A product bought to satisfy personal and family needs. There are three categories of consumer products. These groupings are based primarily on characteristics of buyers purchasing behavior

Consumer Products
1. Convenience Products

2. Shopping Products
3. Specialty Products

4. Unsought Goods: goods & services that we

do not yet know what we want

Consumer Products
Convenience Products Is a relatively inexpensive, frequently purchased item for which buyers want to exert only minimal effort. The buyer spends little time in planning the purchase of a convenience item or in comparing available brands or sellers. Convenience Products: Three types 1. Staple convenience (basic goods eg. Milk) 2. Impulse convenience bought without prior thought(sweets, crisps) 3. Emergency products

Consumer Products
Examples of convenience products are : Bread Gasoline Newspapers Chewing Gum Soft Drinks

1. 2. 3. 4. 5.

Consumer Products
Shopping Products Is an item for which buyers are willing to expend considerable effort on planning and making the purchase. Buyers allocate ample time for comparing stores and brands with respect to prices, product features, qualities, services, and warranties.

Consumer Products
Examples of shopping products are : 1. 2. 3. 4. 5. Appliances Furniture Mens Suites Bicycles Cellular Phones

Consumer Products
Shopping Products These products are expected to last for a fairly long time and thus are purchased less frequently than convenience items

Consumer Products
Specialty Products It possesses one or more unique qualities for which a buyer is willing to expend considerable purchasing effort. Buyers actually know what they want and will not accept a substitute. In searching for specialty products, purchasers do not compare alternatives

Consumer Products
Examples of specialty products are : 1. 2. 3. 4. Unique Sports Cars Rare imported wine Specific type of antique china Special handcrafted furniture

Consumer Products
1. Unsought Goods Consumer products the consumer either does not know about or knows about but does not normally think of buying Consumer has little interest in buying Only buy when they perceive the necessity of buying Managers need to make customers aware that they supply this need Examples: Life insurance, Financial services, Funeral services Aggressive promotion & personal selling by producers& resellers because: consumers have little product awareness Little or negative interest in the product Marketers needs to convince potential buyers of the benefits of buying

2. 3. 4. 5. 6.

Relevance (basis) of the classificationconsumer products

The marketing mix will be different for each class of products, in particular 1. Price 2. Promotion mix 3. Advertising (both media & message) 4. Channels of distribution 5. Packaging 6. Product features

Relevance (basis) of the classificationProducts Classification

Product classification can be done on a variety of perspectives. Based on the less tangible, the product can be classified into two main groups, namely: 1. Stuff Goods are physical tangible product, so it can be seen, felt / touched, felt, held, stored, transferred, and other physical treatments. Judging by the aspect of sustainability, there are two kinds of products, namely: a. Goods not of Long Duration Nondurable Goods Perishable goods are tangible goods that are normally consumed in one or a few hours of use. In other words, the economic age in normal usage within one year. Examples are soap, beverages and snacks, chalk, sugar and salt. Therefore, this type of goods consumed rapidly in a short period of time and frequency of purchase is often the case, then the best strategy is to make them available in many locations, apply the small increase, and are strongly advertising to encourage people to try and simultaneously to form a preference.

Relevance (basis) of the classificationProducts Classification

b. Long Lasting Merchandise Goods Durable Goods
Durable goods are tangible goods that normally survive very long in use (economic era for normal use for one year or more). Examples include TV, fridge, car, computer, and others. In general, these types of goods require personal selling and service more than perishable goods, offering greater benefits and need a guarantee / warranty from the retailer specific. 2. Services Services are activities, benefits or satisfaction for sale. For a repair, for example, a beauty salon, courses, hotels, schools, and others.

Classification of business consumers and business products

Business and consumer classifications A portfolio of demographic, behavioural and business classifications that is available for UK individuals, households and postcodes: Socio-demographic classifications - these include our award-winning Mosaic UK classification, as well as regional segmentation for Scotland, Northern Ireland and London. Mosaic Daytime classifies consumers at their place of work, and our Mosaic Public Sector classification provides a detailed understanding of the demands of citizens for public services Behavioural classifications - these provide detailed insight into the lifestyles, product consumption and buying habits of consumers. They include Mosaic Automotive, Mosaic Grocery, Financial Strategy Segments, Fashion Segments, Clientele drinks occasions segmentation and Mosaic Commercial

Difference between business and consumer marketing Fundamental Differences between Consumer Marketing and Business Marketing Those who have extensive knowledge of the business world will recognize that marketing is not a homogenous activity without distinction. Often there will be variations in practice and purpose between various forms of marketing. One such distinction is the one that is created between consumer marketing and business marketing.

Difference between business and consumer marketing

Difference between business markets and consumer markets due To The Nature Of Purchases A. Organizational consumers purchase capital equipment, raw materials, semi finished goods, and other products for use in further production or operations or for resale to others, whereas final consumers usually acquire the finished items for personal, family, or household use. B. Organizational consumers are likely to require exact product specifications. Final consumers more often buy on the basis of description, style, and color. C. Organizational consumers often use multiple-buying responsibility, in which two or more employees formally participate in complex or expensive purchase decisions. Final consumers employ it less frequently and less formally.

Difference between business and consumer marketing

Difference between business markets and consumer markets on the basis of demand A. Derived demand occurs for organizational consumers because the quantity of items they purchase is often based on the anticipated demand of their final consumers for specific finished goods and services; therefore, organizational consumers are less sensitive to price changes. As long as final consumers are willing to pay higher prices, organizational consumers will not object to price increases. B. Demand is volatile due to the accelerator principle, whereby final consumer demand affects many levels of organizational consumers. C. There are fewer organizational consumers than final consumers. D. Business market consumers tend to be geographically concentrated. E. Buying specialists are often used. F. Distribution channels are shorter.

Difference between business and consumer marketing Differences of business markets and consumer markets based On A Global Perspective
A. As with final consumers, there are many distinctions among organizational consumers around the world and sellers must understand and respond to them. B. Companies doing business in foreign markets must know how to deal with organizational consumers in those markets. C. Nations cultures have a large impact on the way their organizational consumers negotiate and reach decisions.