Ch 7 Business Marketing 7 1 What is Business Marketing Business Marketing industrial Marketing individuals and organizations other than personal consumption the marketing of goods services to o Ex sale of a PC to your college is an example of business marketing Business products include those that are used to manufacture other products become part of another product or aid the normal operations of an organization The key characteristic distinguishing business products from consumer products is intended use not physical form 7 2 Business Marketing on the Internet Business to business electronic commerce the exchange of goods services and information between organizations the use of the internet to facilitate Content marketing more important to B to B Marketing Content marketing based on the idea of developing valuable content for interested audience members videos white papers emails blog posts and subsequently using email marketing search engine optimization paid search and display advertising to pull customers A Measuring Online Success Web analytics Metrics external search traffic internal search engine analytics key word search results 3 of the most important measurements of online success o Recency relates to the fact that customers who have made a purchase recently are more likely to purchase again in the future than are customers who haven t purchased in a while o Frequency helps marketers identify frequent purchasers who are most likely to repeat their purchasing behavior in the future o Monetary Value of sales important b c big spenders can be the most profitable customers for a business Conversion Task the behavior that marketers want the visitor to take such as signing up for emails watching a video calling for more info signing up for a webinar Conversion Rate a ratio of the numberof people who went on to complete Stickiness the desired actions multiplying the frequency of visits by the duration of a visit by the of pages viewed during each visit site reach a measure of a web site s effectiveness calculated by Stickiness frequency x duration x site reach By measuring the stickiness factor of a web site before after a design or function change the marketer can quickly determine whether visitors embrace the change B Trends in B to B Internet Marketing Social media usage in B to B Marketing and B to C marketing has been the most pervasive marketing trends in the past 5 years B to B marketers are more likely to use videos e newsletters to customers and other tools like webinars Ch 7 Business Marketing Key to social media for B to B Marketers is to create compelling and useful content for its customers o Also using social media to gather leads Metrics for increasing the success of social media campaign o Awareness the attention that social media attracts such as the number of followers fans o Engagement interactions b t the brand and the audience such as comments retweets and searches o Conversions occur when action is taken 7 3 Relationship Marketing and Strategic Alliances Relationship Marketing a strategy that entails seeking and establishing ongoing Relationship marketing increasingly important as business suppliers use social Retaining current customers primary focus whereas acquiring new customers was partnerships with customers media platforms to advertise the focus of the past A Strategic Alliances Strategic Alliance partnership a cooperative agreement b t business firms strategic o take form of licensing or distribution agreements joint ventures research and development consortia and partnerships form strategic alliances to strengthen operations and better compete alliances formed b t fierce competitors or companies that operate in completely different industries for alliance to succeed long term must be built on commitment and trust another firm is so important that the relationship warrants maximum efforts at maintain it indefinitely a firm s belief that ongoing relationship with Relationship Commitment o Perceived break down in commitment by one of the parties leads to a breakdown in the relationship Trust the condition that exists when one party has confidence in an exchange partner s reliability and integrity B Relationships in Other Cultures In japan exchange b t firms is based on personal relationships that are developed through what is called amae Amae Reciprocity and personal relationships contribute to amae Relationships b t companies can develop into a Keiretsu a network of the feeling of nurturing concern for and dependence upon another interlocking corporate affiliates Within a keiretsu executives may sit on the boards of their customers or their suppliers Members of a keiretsu trade w each other whenever possible and often engage in joint product development finance marketing activities 7 4 Major Categories of Business Customers Business market consists of 4 major categories of customers producers resellers governments and institutions Ch 7 Business Marketing A Producers Profit oriented individuals and organizations that use purchased goods and services to produce other products or to facilitate the daily operations of the organization Ex construction manufacturing transportation finance real estate and food Original Equipment Manufacturers OEM service firms individuals and organizations that buy business goods and incorporate them into products they produce for eventual sale for other producers to consume o General Motors buys steel paint tires and batteries considered OEM B Resellers Retail and wholesale business that buy finished goods and resell them for a profit Retailers sell mainly to final customers Wholesalers sell mostly to retailers and other organizational customers Business product distributors are wholesalers that buy business products and resell them to business customers C Governments Government units account for the greatest volume of purchases of any customer category 1 Federal Government 2 State county and city governments Contracts for government purchases are often put up for bid D Institutions Institutions that seek to achieve goals other than the standard business goals of profit market share and return on investment Segment includes schools hospitals colleges universities churches laber unions fraternal organizations civic clubs foundations etc 7 5 The North American Industry Classification System North American Industry Classification System NAICS system developed by the U S Canada and Mexico to classify North American
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