In this summary you will find all the subject material for the course Business Marketing. (Arteveldehogeschool, Marketing). The cours was given in English so the powerpoints and my extra notes are also in English.
,Inhoud
Chapter 1 – What is business marketing? .......................................................................................................... 2
Business vs consumer marketing: (!!) ........................................................................................................... 2
Business vs consumer marketing: (!!) ............................................................................................................ 3
B2B Distribution Channel Characteristics....................................................................................................... 4
Organizations or consumers? ........................................................................................................................ 4
Characteristics of B2B Demand ..................................................................................................................... 4
Who are the B2B buyers? ............................................................................................................................. 5
Understanding B2B market & Environment with Buyers Perspective: ............................................................ 6
Porter’s Value Chain: .................................................................................................................................... 7
Chapter 2 – The Procurement Process (!!) ......................................................................................................... 7
Flow of the procurement process ................................................................................................................. 9
Profile of the purchaser ................................................................................................................................ 9
Purchasing process B2B .............................................................................................................................. 10
The procurement circle (!!): ........................................................................................................................ 10
Definition of procurement .......................................................................................................................... 11
Specific objectives: ..................................................................................................................................... 11
The nature of industrial buying and buying behavior ................................................................................... 12
Kraljic matrix: (!! On exam) ......................................................................................................................... 12
Chapter 3 – environmental analysis................................................................................................................. 14
Environment analysis: macro environment ................................................................................................. 15
Environmental analysis: micro environment................................................................................................ 15
Environment analysis: company .................................................................................................................. 17
Chapter 4 – Decision making process / unit (DMP/DMU) ................................................................................. 18
The stages of the DMP are: ......................................................................................................................... 18
Decision Making Unit (DMU) ....................................................................................................................... 20
Conclusions ................................................................................................................................................ 21
Chapter 5 – strategic decisions ........................................................................................................................ 22
Portfolioanalysis Boston Consulting Group .................................................................................................. 22
Product and capacity function..................................................................................................................... 23
Strategic choices......................................................................................................................................... 23
Chapter 6 – digitization ................................................................................................................................... 25
Digital Marketing ........................................................................................................................................ 27
Social media marketing ............................................................................................................................... 30
Data analytics ............................................................................................................................................. 33
Inbound marketing (pull marketing) ............................................................................................................ 34
Chapter 7 – new solution selling...................................................................................................................... 35
New solution selling.................................................................................................................................... 35
A strategic imperative ................................................................................................................................. 38
Mass Marketing vs Segmentation ............................................................................................................... 40
Business Marketing Tessy Biebouw Pag. 1
, Business marketing
Today’s marketer is a peculiar blend of many things: an extraverted storyteller and a data
driven analyst. Someone who is online as well as offline, who is creative as well as analytic,
who is capable of thinking as well as doing.
Chapter 1 – What is business marketing?
= B2B = business to business marketing
Business Marketing is the practice of individuals, or organizations, including commercial businesses,
governments and institutions, facilitating the sale of their products or services to other companies or
organizations that in turn resell them, use them as components in products or services they offer, or
use them to support their operations.
B2B ≠ B2C !!
Global top B2B brands: Belgian top B2B brands:
Business vs consumer marketing: (!!)
Areas of B2B Market Consumer Market
Difference
Market Geographically Concentrated Geographically Disbursed
Characteristics (e.g.: around an airport or harbor)
Relatively Fewer Buyer Mass Market
Product Technical Complex Standardize
Characteristic (e.g.: a producer that only makes (e.g.: iPhone parts: made in a
dashboards for Volvo) fabric in India or America => the
same)
Customized
Business Marketing Tessy Biebouw Pag. 2
, Service Service, timely Availability Somewhat (less) Important
Characteristic extremely Important (e.g.: fast delivery for online
(e.g.: a printingmachine, breaks at service, or an employer in the
night => no newspaper in the store asking “what can I do for
morning) you”)
Buying Behavior Involvement of Various functional Involvement of family members
area from both the ends
Purchase Decisions are Purchase decisions are mostly
performance based and rational based on Physiological
/social/psychological needs
(e.g.: buying your 16th pair of
shoes)
Technical Expertise Relatively less technical
expertise is required
Stable Interpersonal relationship Non- Personal relationship
Business vs consumer marketing: (!!)
Areas of Difference Industrial Market Consumer Market
Channel Characteristic More Direct (a lot of personal sales) Indirect
Fewer Intermediaries Multiple layers of Intermediaries
Promotional Characteristic Emphasis on Personal Selling Emphasis on Mass Media
(Advertising)
Price Characteristic Competitive Bidding and List Price or MRP
Negotiated Prices
List Price for Standard Products
Business Marketing Tessy Biebouw Pag. 3
,B2B Distribution Channel Characteristics
Organizations or consumers?
Most of what? B2C or B2B?
Which group is geographically most concentrated?
Who’s buying on an international level?
Who’s has a steady relationship with its supplier?
Who can switch most easily towards another supplier?
=> CHARACTERISTICS B2B
Characteristics of B2B Demand
- Derived demand
- Price elasticity
- Joint demand
- Price inelasticity
Derived demand
o The demand for a good or service that results from the demand for another good or service.
o Examples:
PostNL,
Business Marketing Tessy Biebouw Pag. 4
,The chain of derived demand (!!)
Between distribution and
shirt is the only thing that is
B2C, all the others are B2B!
Price elasticity
- A change in price causes a bigger % change in demand.
- A good is price elastic when an increase in prices causes a bigger % fall in demand. e.g. if
price falls 20% and demand increases 80%, the PED = -4.0 (PED = Price Elasticity of Demand)
- Remarkable example: E-bikes battery: The price of e-bikes increases with 20%, but the
demand for e-bikes is nevertheless increasing with 50%. This is special.
Joint demand
- The one product is practically useless without the other
- Demand for product or services is interdependent on each other
o E.g.: Coffee Powder and Sugar & Milk in Making Coffee
o E.g.: Software- Operating System
o E.g.: Car & Fuel/electricity
o E.g.: Gillette: razorblade and razor holder and shaving foam
Price inelasticity
- A change in price causes a smaller % change in demand because there are few alternatives
- Example: if price of petrol falls 30%, but demand for petrol only increases 10%
Who are the B2B buyers?
1. Commercial business (= company to company)
Industry (e.g.: paper business) services
2. Governmental: (government to company)
a. local
City hall → city workers
b. national & supra national
Belgian Parliament → Rafale/Joint Strike Fighter/Eurofighter
(government buys these services)
Business Marketing Tessy Biebouw Pag. 5
, 3. Institutes (institutes to companies)
Artevelde University → beamers, coffee for coffee machines
Hospital → machines
Understanding B2B market & Environment with Buyers Perspective:
Just to illustrate how complex B2B is.
Business Marketing Tessy Biebouw Pag. 6
,Porter’s Value Chain:
Marketing & sales is where you
make the difference with your
competitors, very important for the
margin. Service has a direct
influence on marketing & sales.
Purchasing in the value chain:
Primary:
1. Inbound Logistics — involve relationships with suppliers and include all the activities
required to receive, store, and disseminate inputs.
2. Operations — are all the activities required to transform inputs into outputs (products and services).
3. Outbound Logistics — include all the activities required to collect, store, and distribute the output.
4. Marketing and Sales — activities inform buyers about products and services, induce buyers
to purchase them and facilitate their purchase.
5. Service — includes all the activities required to keep the product or service working
effectively for the buyer after it is sold and delivered.
Secondary:
1. Procurement — is the acquisition of inputs, or resources, for the firm.
2. Human Resource management — consists of all activities involved in recruiting, hiring,
training, developing, compensating and (if necessary) dismissing or laying off personnel.
3. Technological Development — pertains to the equipment, hardware, software, procedures,
and technical knowledge brought to bear in the firm’s transformation of inputs into outputs.
4. Infrastructure — serves the company’s needs and ties its various parts together, it consists of
functions or departments such as accounting, legal, finance, planning, public affairs,
government relations, quality assurance, and general management.
Chapter 2 – The Procurement Process (!!)
- To supply the organization with a flow of materials and service to meet its needs.
- To ensure continuity of supply by maintaining effective relationships with existing sources
and by developing other sources of supply either as alternatives or to meet emerging or
planned needs. (You supply to companies because those companies have a need for your
supply)
- To buy efficiently and wisely, obtaining by ethical means the best value for every Euro spent.
Business Marketing Tessy Biebouw Pag. 7
, - To maintain sound cooperative relationships with other departments providing information
and advice as necessary to ensure the effective operation of the organization as a whole.
(e.g.: (e.g.: You can buy 5 Dacia’s for 1 range rover, Dacia has different criteria for his
supplies, range rover goes for quality)
- To develop staff, policies, procedures and organization to ensure the achievement of these
objectives. => the whole organization must be on one line
What is a procurement process? → What doesn’t work anymore and how do we replace it?
1. Decide whether production will be in house or via outsourcing.
2. Develop a strategic purchasing package.
3. Continuous optimization of all supplier data
4. Development and management of the relationship with the supplier
5. Optimizing product / process innovation and development
6. (Integrating suppliers into the order process)
7. Improving supplier’s performance, monitoring and increasing quality
8. Execution of a strategic cost management
E.g.:
1) A printing machine.
2) Collect information of all
parts of your company, because a
lot of departments (financial,
marketing, logistics…) so you know
exact what you need (what kind of
printing machine)
3) Which suppliers can supply
you that machine?
4) Start negotiating: what can you do
for us…?
5) Make a decision of what printing machine you want.
6) Install the machine.
7) Start produce.
8) pay the invoice.
Business Marketing Tessy Biebouw Pag. 8
, Flow of the procurement process
Decision-making process: sourcing
important: specify => The input of the needs is important!
“Contracting”, you already have negotiated, the conditions and price is set.
Procurement process:
Objective: S.M.A.R.T. 5 W’s + H
- Specific - What
- Measurable - Why
- Attainable - Who
- Relevant - Where
- Timely - When
- How
Profile of the purchaser
= the one who buys the product
- Communicative skills - Thinks out of the box
- Customer oriented - Problem solving skills
- Commercial and legal skills - Convincing skills
- Planning and organization talent - Negotional skills
Business Marketing Tessy Biebouw Pag. 9
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