session 1 - 2 overview of bm
TRANSCRIPT
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Introduction to the courseBusiness Marketing
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Course outline• Lecturer: Rangan Mohan• Number of lectures: 20 • Evaluation
– Class Participation / Attendance 10%– Mid Term 30%– End Term 40%– Assignments 10%– Quizzes 10%
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Contact details• Rangan Mohan• [email protected]• Mobile 98450 28426• Classes on Friday mornings and Saturday
mornings• Available on Friday evenings and Saturday
mornings
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Course objectives• To understand what business marketing is in
the networked economy.• To evaluate theories and concepts for
managing business markets.• To apply business marketing models for
managing business relationships.• To successfully carry out Business
Marketing• To understand the implications of technology
and the Internet for business marketing.
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Learning objectives• Understand the characteristics of business markets and business
customers.• Explain the nature of business marketing, business solutions and
uncertainties of both customers and suppliers.• Illustrate the inter-connected nature of business relationships and
networks of relationships.• To explain how each relationship is part of a complex network of
relationships.• Understand ways of offering solutions and dealing with
uncertainties.
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Definition
Business marketing is the task of selecting, developing and managing customer relationships for the advantage of both customer and supplier, with regard to their respective skills, resources, technologies, strategies and objectives (Ford et al. 2002).
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Differences between consumer & business purchases - real or not?
• Fewer Customers, larger deeper longer relationships• More people involved in business purchases. • Business purchases are often much more complex.• Application of the 4P’s / 7P’s would be different• The people involved in a business purchase are
professional. • A business purchase may take a long time.• Each business customer is individually important.• A business purchase is part of a complex relationship
between customer and supplier.
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Business Markets
Local to international– Bought by
• Businesses– End Users
– OEMs
– Distributors, Dealers and VARs
• Government bodies
• Institutions– For consumption
– For use
– For resale
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A Market Driven Firm has :
Customer linking capability …the ability to develop and manage close customer relationships..
Market sensing capability…companies ability to sense change and to anticipate customer responses.
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Business Market Characteristics
• Derived demand – the Bullwhip Effect
• Fluctuating demand
• Stimulating demand
• Price sensitivity/demand elasticity
• Global Market perspective
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Types of Goods
• Entry Goods– Raw Materials
• Farm Products• Natural Products
– Manufactured Materials and Parts• Component Materials• Component Parts
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Types of Goods - contd
• Foundation Goods– Installations
• Building and Land• Fixed Equipment
– Ancillary Equipment• Light Factory Equipment• Office Equipment
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Types of Goods - contd
• Facilitating Goods– Supplies
• Operating Supplies • Maintanence and Repair Items
– Business Services• Maintanence and Repair Services• Business Advisory Services
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Classifying industrial goods by the following questions:
How does the good or service enter the production process?
How does it enter the cost structure of the firm?
Classifying Goods for the Business Market
Source: Adapted from Philip Kotler, Marketing Management: Analysis, Planning, and Control, 4th ed. (Englewood Cliffs, N.J.: Prentice-Hall, 1980), p. 172, with permission of Prentice-Hall, Inc.
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Things to remember …1. Our unit of analysis isn’t a sale, project or market, but
each relationship as part of a portfolio of relationships. 2. We can only make sense of a single purchase by
looking at the relationship of which it forms part.3. Business relationships are a company’s primary assets.
Without them it cannot buy, sell, produce or deliver.4. The development of relationships requires investment
of time, money and resources.
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Relationship Marketing• All marketing activities directed toward establishing,
developing, and maintaining successful exchanges with customers.
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Business relationships are ways to obtain resources
• Business relationships develop and exploit the skills, resources and technologies of both companies.
• Relationships link the activities of companies, tie their resources and form bonds between individuals.
• Different relationships, have different actual and potential benefits to the supplier and to the customer.
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Problem solving in business-to-business relationships
Through offering developed jointly with a customer:• An offering only has value as a solution to a specific
customer problem. • A different marketer can compete, even with an identical
product by differentiating any of other offering element. • Sometimes neither product nor service nor logistics are
most important. Instead advice is critical.• Buying an offering involves a range of costs for the
customer, as well as purchase price.
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Supplier viewpoint
An offering…• A package consisting of different proportions
of the elements of physical product, service, advice, adaptation and logistics and the costs that it involves.
• The package = Product + Service + Ideas + Solutions
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A Solution…A customer is only concerned with how effective an offering is as a solution to its problems.
Same Product – different solutions
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Offerings and solutions• Consider offerings as solutions for customers, not just
their specifications. • Compare offerings with other solutions through the
eyes of the customer. • Advise customers on the choice of solutions. • An offering is of no value, unless it is fulfilled.• Actually fulfil the offering for each customer, at the
promised time, place, performance and consistency.
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Customer’s role in successful solutions
• Customer is an active participant in developing a successful solution
• Clear problem definition.• Use the right tools in building relationships. • Skills in developing an offering with a supplier and
ensuring that it is fulfilled.• Skills in integrating an offering with its own
offering.
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Uncertainties in business relationships
Supplier uncertainties• Capacity – how much
can we sell?• Application – how can
the offering be effectively used?
• Transaction – will the customer actually buy what it says?
Customer uncertainties• Need – when the problem
is difficult to determine. • Market – when the range
of possible solutions is wide or technology is changing rapidly.
• Transaction – when the concern is about fulfilment.
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Abilities
Supplier abilities• Problem solving
ability – to design and develop an offering.
• Transfer abilities – to fulfil an offering
Customer abilities• Demand ability – to
advise on offering design and/or provide volume of business.
• Transfer ability – reliability in providing orders and information.
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Conclusion• Business relationships require development and
management. • Both supplier and customer are active parties in a business
relationship. • Business relationships are ways to access resources. • Offerings and solutions are jointly developed in the face of
uncertainties.• Matching capabilities between supplier and customer is
critical in transfer of business solutions.