Introduction – B2B

Marketing
Lesson 1
Introduction
What is Business ?

A business is an entity that brings together time, effort

and capital in order to produce a profit.
Introduction…
What is Marketing ?

Marketing is defined as "the activity, set of

institutions, and processes for creating,
communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and
society at large. Marketing is a product or service
selling related overall activities. 
What is Marketing ?....
the process of planning and executing
the conception (product), pricing, promotion, and
distribution
of ideas, goods, and services
to create relationships
that satisfy individual and organizational
objectives.”
Types of Marketing
Company

B2C
B2B

Businesses Government
Consumers / End
Users are Institutions
individuals /
Households
Examples ….
What kind of sales is following – B2C or B2B

Tata selling Indica to Mr. Ram from its retail outlet.

Examples ………

Tata selling Indica to MP Government.

Examples………….

Tata selling Indica to Smart Cab.

B2B Marketing
Business to Business Marketing or Industrial
Marketing or Business Marketing or Organizational
Marketing is the marketing of products and services to
business organizations. Business organisations include
manufacturing companies, government undertakings,
private sector organisations, educational institutions,
hospitals, distributors, and dealers.
B2B Marketing
MARKETING OF GOODS AND SERVICES TO:
Companies
Government Bodies
Institutions (i.e. hospitals)
Non-Profit Organizations (i.e. American Red Cross)
FOR
USE IN PRODUCING THEIR PRODUCTS
AND/OR TO FACILITATE THEIR OPERATIONS
B2B v/s B2C
Product –

B2B B2C
Technically complex. No technicality involved.

Customized. Standardized.

After Sales Service is equally After Sales Service is somewhat

important. important.
B2B v/s B2C
Place –

B2B B2C
Geographically concentrated. Geographically dispersed.

Fewer or negligible Channel Levels. Multiple Level of Intermediaries.

B2B v/s B2C
Promotion –

B2B B2C
Emphasis is on Personal Selling Sales through intermediaries.

Advertising through direct Advertising using Mass Media.

marketing or specific magazines or
journals.
B2B v/s B2C
Price –

B2B B2C
Most important factor in Relatively lesser important factor.
purchasing decision.

Price Negotiation is a very lengthy Price Negotiation are almost

process. negligible. If at all happens closes in
smaller time span.

List Prices for standard products. MRP . Retailer offers discount

(Dealer Landing Price) looking at the demand of the
product and the margins.
 B2B v/s B2C
Characteristic B2B Market B2C Market
Sales volume Greater Smaller
Purchase volume Greater Smaller
Number of buyers Fewer Many
Size of individual buyers Larger Smaller
Location of buyers Concentrated Diffuse
Buyer-seller relationship Closer More Impersonal
Nature of channel More direct Less direct
Buying influences Multiple Single/Multiple
Type of negotiations More complex Simpler
Use of reciprocity Yes No
Use of leasing Greater Less
Key promotion method Personal Selling Advertising
BUSINESS TO BUSINESS:
IT IS ALL ABOUT DEMAND
DERIVED DEMAND
The demand for a company’s products comes from
(derived) the demand for their customer’s products.
Most demand comes from consumers.

JOINT DEMAND
Two products are used together and demanded together –
Both products are consumed at the same time
Other Characteristics of Business Demand

Inelastic Demand
Fluctuating Demand
Major Uses of B2B Products
For additional production
(e.g., components are combined
into subassemblies and become
part of the finished product)
For use in operations, but not
part of the finished product
For resale
 Classifying Business Goods & Services
3 Main Categories of Products
 Entering Goods
 Become part of the finished product
 Cost assigned to the manufacturing process
 Foundation Goods
 Capital Items
 Typically depreciated over time
 Facilitating Products
 Support organizational operations
 Handled as overhead expenses
 Classifying Business Goods
Entering Goods & Services
Raw Materials
 Farm products & natural products
 Only processed as necessary for handling & transport
 Require extensive processing
Manufactured Materials & Parts
 Any product that has undergone extensive processing prior to
purchase
 Component Materials require additional processing
 Component Parts generally do not require additional
processing
 Classifying Business Goods & Services
Foundation Goods
Installations
Major long-term investment items
Buildings, land, fixed equipment, etc.
Accessory Equipment
Less expensive & short-lived
Not considered part of fixed plant
Portable tools, PC’s, etc.
 Classifying Business Goods & Services
Facilitating Products
Supplies
Any supplies necessary to maintain the
organization’s operations
Services
Maintenance & Repair support
Advisory support
Logistical support
 Categories of B2B Customers
Commercial enterprises
Indirect channel members and
facilitators
OEMs (original equipment
manufacturers)
Users = customers
Governmental organizations
Institutions
THANK YOU