Slide 1Types of Organizational CustomersSlide 3Slide 4Slide 5Slide 6Producer TypesProducer Types Raw Materials ProducersProducer Types Components Parts and Manufactured Materials ProducersProducer Types Capital Goods ManufacturersProducer Types Accessory Equipment SuppliersSlide 12Slide 13Forms of Competition in B2B MarketsSlide 15Slide 16Slide 17An Adaptation of the Value ChainMultinational Value NetworkThe Product Life CycleThe Technology Adoption Life CyclePLC and TALCTALC and How Technology Markets EvolveUsing the Technology Adoption Life CycleSlide 25IntroductionDefining CRM for distributionSlide 28Slide 29Hardware NeedsSlide 31Software NeedsSlide 33Anticipating and Meeting Customer NeedsSlide 35Slide 36Slide 37Slide 38Catalog DevelopmentBack Office Integration12002 EditionVitale and GiglieranoChapter 2Classifying Customers, Organizations, and MarketsPrepared by John T. Drea, Western Illinois University2Types of Organizational CustomersGovernment UnitsGovernment UnitsNonprofit and Not-for-Profit OrganizationsNonprofit and Not-for-Profit OrganizationsCommercial EnterprisesCommercial EnterprisesIndustrial DistributorsValue-AddedResellersOriginalEquipmentManufacturersUsers or End Users85,000 local, state, and federal government unitsChurches, hospitals, colleges, nursing homes, etc.3•Industrial Distributors–Provide economic utilities of form, time, place, and possession to manufacturers–Creates assortments of products from many manufacturers–Particularly useful for reaching customers too small to justify direct sales effortsCommercial EnterprisesCommercial EnterprisesIndustrial DistributorsValue-AddedResellersOriginalEquipmentManufacturersUsers or End Users4•Value-Added Resellers–More than just a distributor or wholesaler.–Provides unique offering enhancements tailored to a customer’s needs by combining products/services from other manufacturers.–Creates a value network at the user level.Commercial EnterprisesCommercial EnterprisesIndustrial DistributorsValue-AddedResellersOriginalEquipmentManufacturersUsers or End Users5•Original Equipment Manufacturers (OEMs)–Purchase products and incorporate those products into their products.–Usually the largest-volume users of goods and services.–Ex: Intel is an OEM supplier to many computer manufacturers, Firestone was an OEM supplier to Ford for many years.Commercial EnterprisesCommercial EnterprisesIndustrial DistributorsValue-AddedResellersOriginalEquipmentManufacturersUsers or End Users6•Users or End Users (E/U)–A manufacturer that purchases goods or services for consumption/ incorporation into their products in such a way that the identity of the purchased product is lost.–When Goodyear purchases steel for fabrication into steel belts for tires, Goodyear is the steel manufacturer’s E/U.Commercial EnterprisesCommercial EnterprisesIndustrial DistributorsValue-AddedResellersOriginalEquipmentManufacturersUsers or End Users7Producer TypesComponent Partsand ManufacturedMaterialsProducersCapitalGoodsManufacturersAccessoryEquipmentSuppliersRawMaterialsProducers8Producer TypesRaw Materials ProducersOften compete in price sensitive marketsRaw materials markets are often dominated by a few very large producersProducts lose identity once incorporatedinto the customer’s productSeek value added positionsRawMaterialsProducers9Producer TypesComponents Parts and Manufactured Materials ProducersMore differentiated from direct competition by the value added to the customer’s product.Usually retain identity even whenincorporated into the customer’s product.Parts retain their same form when incorporated.Seagate computer drives are an example.Component Partsand ManufacturedMaterialsProducers10Producer TypesCapital Goods ManufacturersAdherence to specifications reducesopportunities for differentiation.Involves the development of specifications to ensure that organizational needs are met.Capital goods involve large purchases with considerable risk for the customer.Customers expect an offering that includes installation, equipment, and accessories.CapitalGoodsManufacturers11Producer TypesAccessory Equipment SuppliersAccessory equipment is usually produced by an independent supplier.Accessories can be added to a bundled offering by a channel intermediary.Accessory equipment is equipment that works with some other offering.The key to providing value is to be compatible with industry standards for the primary offering.AccessoryEquipmentSuppliers12Communities of interested parties who are not direct participants in a market as customers, channel members, suppliers, or competitors.FinancialPublicsFinancialPublicsIndependent PressIndependent PressPublic InterestGroupsPublic InterestGroupsInternal PublicsInternal PublicsPublics13The Macroenvironmentinfluencesvaluecreation.DemographicEnvironmentEconomicEnvironmentSocioculturalEnvironmentNaturalEnvironmentTechnologicalEnvironmentCompetitiveEnvironment14Forms of Competition in B2B Markets•Pure Competition–No single entity dominates the market or has much of an influence on price.–Most common in commodity industries.–Little product differentiation – price is a major component of the marketing mix.15Forms of Competition in B2B Markets•Monopolistic Competition–Many buyers, many sellers.–Product is differentiable – can vary in quality, features, and style–A range of prices is possible.–Promotion and branding are important to product differentiation.16Forms of Competition in B2B Markets•Oligoplistic Competition–Market consists of a few sellers that are sensitive of each others’ strategy.–Barriers limit entry of new competitors.–Prices are aimed at maintaining market stability.–Key is building relationships with large volume customers.17Forms of Competition in B2B Markets•Pure Monopoly–Only one primary seller.–Competitors that do exist are small niche players.18An Adaptation of the Value ChainAn Adaptation of theValue Chain19Multinational Value Network20The ProductLife Cycle21The Technology Adoption Life Cycle22PLC and TALC•Product Life Cycle (PLC)–Introduction–Growth–Maturity–Decline•Technology Adoption Life Cycle (TALC)–Technophiles–Visionaries (aim for “quantum leaps”)–Pragmatists (want proven solutions)–Conservatives–Laggards23TALC and How Technology Markets Evolve•Chasm–A break in the sales growth curve for a new technology.–A chasm occurs between visionaries and pragmatists.•Tornado–The chaos that