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Introduction to the course

Business Marketing
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Course outline
Lecturer: Rangan Mohan
Number of lectures: 20
Evaluation
Mid Term 30%
End Term 40%
Assignments 20%
Quizzes 10%
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Contact details
Rangan Mohan
rangan.mohan@gmail.com
Mobile 98450 28426
Classes on Thursday, Friday and Saturday
Available in person on those days and on
email otherwise

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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 and the differences from the
consumer market.
Explain the nature of business marketing and
business solutions and the characteristics 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 business challenges.
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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 4Ps / 7Ps 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, 4
th
ed.
(Englewood Cliffs, N.J.:
Prentice-Hall, 1980), p. 172,
with permission of Prentice-
Hall, Inc.
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Relationship Marketing
All marketing activities directed
toward establishing, developing,
and maintaining successful
exchanges with customers.
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Things to remember
1. Our unit of analysis isnt 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 companys
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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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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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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Customers 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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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.