ADM 2320 Lecture Notes - Lecture 6: Retail, North American Industry Classification System, English Auction
9 Dec 2017
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CHAPTER 6
B2B marketing is the process of buying and selling goods or services to be used in the production
of other goods and services, for consumption by the buying organization, or for resale by
wholesalers and retailers.
Therefore, B2B marketing involves manufacturers, wholesalers, retailers, and service firms that
market goods and services to other businesses but not to the ultimate consumer
B2B Markets
• B2B firms focus their efforts on serving specific types of customer markets to create
value for those customers.
Manufacturers or Producers
• Manufacturers, for example, buy raw materials, components, and parts that allow them to
manufacture their own goods.
• Not only does the manufacturer purchase products from other firms to make its products,
but it also works with its corporate partners, such as transportation companies and
retailers, to facilitate the movement of the raw supplies to the factory and finished
products to the stores.
Resellers
• Resellers are marketing intermediaries that
resell manufactured products without
significantly altering their form.
• Wholesalers, distributors, and retailers are all
resellers.
Institutions
• Institutions, such as hospitals, educational
organizations, prisons, religious organizations,
and other nonprofit organizations, also
purchase all kinds of goods and services for
the people they serve.
Government
• In most countries, the central government tends to be one of the largest purchasers of
goods and services.
Key Challenges of Reaching B2B Clients
1. The first challenge is to identify the right persons or decision makers within the
organizations who can authorize or influence purchases.
2. Second, marketers must understand the buying process of each of its potential
clients.
3. The third challenge is to identify the factors that influence the buying process of
potential clients
• To address the complexity of B2B markets, many companies have salespeople or a sales
team dedicated to specific clients.
find more resources at oneclass.com
find more resources at oneclass.com
Differences Between B2B and B2C Markets
• Market Characteristics
o In B2C markets, consumers buy goods to satisfy their own individual or
household needs and are heavily influenced by price, personal tastes, brand
reputation, or personal recommendations of friends and family. In B2B markets,
demand for goods and services is derived from B2C sales in the same supply
chain.
o Derived demand is the linkage between consumers' demand for a company's
output and its purchase of necessary inputs to manufacture or assemble that
particular output.
o Another characteristic of B2B markets is that the number of business buyers is
substantially fewer than in B2C markets, and the business buyers are more
concentrated in big cities, towns, and industrial areas.
• Product Characteristics
o In B2B markets, the products ordered are primarily raw materials and semi
finished goods that are processed or assembled into finished goods for the
ultimate consumers.
o In B2C markets, consumers buy finished goods for their own personal
consumption.
• Buying Process Characteristics
o For purchases of highly technical or complex products involving thousands or
millions of dollars, the buying effort is much more structured, formalized, and
professional.
o They are usually technically trained and qualified professionals, and they
represent different interests (e.g., managerial, technical, and departmental) within
the organization.
o In B2B markets, buyers and sellers strive to develop close relationships with each
other and so will often provide help or advice to ensure a win-win situation for
both parties.
o Some firms may engage in reciprocal buying arrangements—a practice where two
firms agree to buy each other's products and services.
o Two such consequences are that it excludes other vendors from participating in
the buying process and may limit the firms to each other's products, which may
not be the best thing.
B2B Classification System and Segmentation
• North American Industry Classification System (NAICS) is a classification scheme that
categorizes all firms into a hierarchical set of six-digit codes.
• The NAICS classification system can be quite useful to B2B marketers for segmenting
and targeting markets.
• The first two digits represents the sector in the economy (e.g., 51 is the information
sector); the third digit represents the subsector (e.g., 515 is “Broadcasting except
Internet”); the fourth digit represents the industry group; the fifth digit represents a
specific subgroup within the industry; and the full six-digits refer to the country-level or
national industry.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
B2b marketing is the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers. Therefore, b2b marketing involves manufacturers, wholesalers, retailers, and service firms that market goods and services to other businesses but not to the ultimate consumer. B2b markets: b2b firms focus their efforts on serving specific types of customer markets to create value for those customers. Resellers: resellers are marketing intermediaries that resell manufactured products without significantly altering their form, wholesalers, distributors, and retailers are all resellers. Institutions, such as hospitals, educational organizations, prisons, religious organizations, and other nonprofit organizations, also purchase all kinds of goods and services for the people they serve. In most countries, the central government tends to be one of the largest purchasers of goods and services.
