Page 207 - Foundations of Marketing

174 Part 3 | Customer Behavior and E-Marketing

Marketers are just as concerned with meeting the needs of business customers as they are con-
sumers. Marketers at General Electric, for instance, go to considerable lengths to understand
their customers so they can provide better, more satisfying products, and develop and maintain
long-term customer relationships.
In this chapter, we look at business markets and business buying decision processes. We
first discuss various kinds of business markets and the types of buyers that comprise those
markets. Next, we explore several dimensions of business buying, such as characteristics of
transactions, attributes and concerns of buyers, methods of buying, and distinctive features
of demand for business products. We then examine how business buying decisions are made
and who makes the purchases. Finally, we consider how business markets are analyzed.

LO 1 . Distinguish among the BUSINESS MARKETS
various types of business
markets.
As discussed in Chapter 5 , a business market (also called a business-to-business market
or B2B market ) consists of individuals, organizations, or groups that purchase a specific
kind of product for one of three purposes: resale, direct use in producing other products,
or use in general daily operations. Marketing to businesses employs the same concepts—
defining target markets, understanding buying behavior, and developing effective market-
ing mixes—as marketing to ultimate consumers. However, there are important structural
and behavioral differences in business markets. A company that markets to another com-
pany must be aware of how its product will affect other firms in the marketing channel,
such as resellers and other manufacturers. Business products can also be technically com-
plex, and the market often consists of sophisticated buyers.
Because the business market consists of relatively smaller
customer populations, a segment of the market could be as
2
small as a few customers. The market for railway equipment
in the United States, for example, is limited to a few major
carriers. Some products can be both business and consumer
products, especially commodities like corn, bolts, or screws
or supplies like light bulbs or furniture. However, the quan-
tity purchased and the buying methods differ significantly
between the consumer and business markets, even for the
same products. Business marketing is often based on long-
term mutually profitable relationships across members of
the marketing channel. Networks of suppliers and customers
recognize the importance of building strong alliances based
3
on cooperation, trust, and collaboration. Manufacturers may
even codevelop new products, with business customers shar-
ing marketing research, production, scheduling, inventory
management, and information systems. Business marketing
can take a variety of forms, ranging from long-term buyer–
seller relationships to quick exchanges of basic products at
Courtesy of Hoefler & Frere-Jones, Inc. added exchange that shifts the focus from attracting to retain-
competitive market prices. For most business marketers, the
goal is to understand customer needs and provide a value-

ing customers and developing relationships.
The four categories of business markets are producer,
reseller, government, and institutional. In the remainder of

Producer Markets
Producer Markets this section, we discuss each of these types of markets.
Hoefler & Frere-Jones is part of the producer market. The firm pro-
duces typefaces, something that consumers do not require, but that Individuals and business organizations that purchase prod-
can be an important element of creating goods for an organization, ucts for the purpose of making a profit by using them to
including creating a logo and brand name, labels, and packaging. produce other products or using them in their operations are

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.