Business-to-Business Customers
Producers, Resellers, Government, Institutions
Producers
manufacture products/services
Resellers
wholesales and retailers
Government
city, country, sate, federal
Institutions
nonprofit service organizations
Business Products
1. Major Equipment�production equipment
2. Raw Materials�iron ore, wood, coal
3. Processed Materials�steel pressed wood chips, plastic
4. Accessory Equipment�computer, copy machine
5. Component Parts�tires, pressure valves
6. Supplies�pens, paper, cleanin
Straight Rebuy
most common, same familiar product, purchaser does not look for new information or vendors
Modified Rebuy
purchaser wants some new or improved version of an existing product, some information search
New Buy
least common, purchaser buys new product for first time, seeks new venders and new information
Organizational Buying Center
all the people who participate in buying a product for a firm
Roles in the Buying Center:
1. Initiator�identifies a need/problem
2. Influencer�influences final decision
3. Gatekeeper�controls the flow of information in and out
4. Decider�makes the final purchase decision
5. Purchaser�buys the product
Business/Organizational Buying Process
1. Need Recognition
2. Product Specifications
3. Search for Qualified Suppliers
4. Analyze proposals(bids)
5. Select Supplier(s)
6. Develop Order Routine
7. Order Placement
8. Evaluation of product and supplier
Market Segmentation
the process of dividing a total market into smaller more homogenous submarkets
Smaller Submarkets should...
Desire/need the product
Have ability to purchase the product
Be willing to buy the product
Have authority to buy the product
Two ways to approach a total market:
1. Mass Market
2. Market Segmentation
Mass Market(undifferentiated)
- aim at total market (more susceptible to competition (Hershey & Coca-Cola), can save costs)
Market Segmentation
aim at submarket(s)
Concentration
aim at one submaMarket (one product and one marketing strategy)
Multisegmentation
aim at two or more submarkets
-Benefits: higher profits, greater sales volume, larger market shares
Steps in Segmenting a Market (Segmentation Process):
1. Select a market for study
2. Choose basis for segmenting the market
3. Select segmentation descriptors
4. Profile and analyze market segments
5. Select target market(s)
6. Design and implement marketing mix(s)
Target Market Analysis
-Identify Characteristic of buyers
-identify motives for buying product
-identify decision making process
-identify when and where they buy the product
Basis for Segmenting Consumer Markets
1. Demographic - age, gender, income, marital status, family life cycle
2. Geographic - rural vs. urban, north vs. south
3. Psychographic - personality, motives. lifestyles
4. Benefit - benefits consumers seek from product
5. Usage Rate - heavy user, mode
Basis for Segmenting Business-to-Business Markets:
1. Geographic - rural vs. urban, north vs. south
2. Customer Type - retailer, manufacturer, government
3. Customer Size - small, large
4. Product Use - wood (make furniture, build houses)
product positioning
influencing where a consumer positions a product in their mind relative to competing products
perceptual mapping
two or three dimensional graph that displays location of product brands in consumers' minds
Basis of positioning
attribute, price, quality, product user, product class
Product Differentiation
a positioning strategy that firms use to distinguish their products from competitors
Marketing Research
a systematic process of gathering, organizing and interpreting data
Data collected must meet the 3 following criteria:
1. Reliability
2. Validity
3. Representative
Quantitative
large samples, closed-ended questions, use surveys, easy to analyze data
Qualitative
small samples, open-ended questions, use focus groups
Secondary data
data already collected(can aid in formulating problem and research methods, quick, inexpensive, quality of data hard to assess, often not enough information�need primary data)
probability
equal and known chance of being selected
non probability
selection is based on convenience
Marketing Research Process
1. Define Problem/Opportunity--Most important step
2. Develop Research Design
3. Develop Sampling Plan
4. Collect the data�most time consuming
5. Analyze the data-typically the most difficult step
6. Report the findings�written and oral reports
product
a bundle of attributes and benefits designed to satisfy customer needs
Components of a Product
1. Core Product�benefits derived
2. Tangible Product�physical product attribute
3. Extended Product�intangibles(service, warranties, image)
Product Item
a specific version of a product (Trac 2 Razor)
Product Line
a group of closely related product items (Razorblades)
3 Types of Product Line
� Product line extension-add more of current item
� Product line filling-make more
� Product line contraction-drop a product
Product Mix
all product lines sold by a company
Width
number of product lines sold
Depth
number of product items in a product line
Type of Consumer Goods:
1. Convenience goods�low price, bought often, little effort, wide distribution
2. Shopping Goods�higher price, not bought often, compare price and quality
3. Specialty Goods�consumer will not accept substitute
4. Unsought Goods�must create demand, consume
Brand
any name, term, design, or symbol used to promote and distinguish a product in the marketplace
Brand name
spoken part of the brand(name or term)
Brand mark
unspoken part of brand(design or symbol)
Trade name
name of company marketing the product
Trade Character
character used to promote product
Trademark
registered and protected brand name, brand mark, trade name, or trade character
Types of Brands:
1. National
2. Private
3. Generic
National Brand
originates at the manufacturer level and is distributed nationally
Private Brand
owned by a wholesaler or retailer
Generic Brand
uses the generic product name as the brand name(peaches, green beans)
Branding Strategies:
Mixed branding
Multiple (Individual) branding
Family (Blanket) branding
Mixed Branding
market two or more types of brands
Multiple Branding
selling similar products with different brand names within a product line
Family Branding
putting the same brand name on several products
advantage:brand name recognition
Characteristics of a good brand:
-Easy to pronounce and easy to remember
-Distinguishes product from competitors
-Describes the product's benefits
-Helps create and support a product image
Types of Packages:
Protective
Secondary
Primary
Protective Package
use to protect during shipment and storage
Secondary
use to help promote and display product(toothpaste box)
Primary
contains the actual product (toothpaste tube)
Functions of Packages:
Protect product
Promote product
Assist in carrying and using product
Product Life Cycle
Introduction
Growth
Maturity
Decline
Introduction
low sales, low profits, limited distribution, limited product offering, high price, informative advertising, few competitors, high failure rate
Growth
rapid sales growth, expand distribution (key to success), expand product offering, lower price,persuasive advertising (comparative), more competition, profits peak and start to decline, sales increase
Maturity
sales peak and start to decline, increase promotion, heaviest competition, lower price, reminder advertising, increase product offering,most products stay in this stage
Decline
sales decline sharply, slash price, reduce product offerings, reduce distribution, little or no promotion