Business-to-Business Sales and

Marketing
Dr. Dan Flint
Florida State University

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B2B S&M; A-envnmnt
 Today’s Agenda
• Introductions
• Review course content; syllabus
• Jump into Ch. 1 and 2 on business marketing
environment

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 Introductions
• Who I am and what I’m all about
– I am here to facilitate part of your knowledge journey;
I’m here for you, not the other way around
– My background: degrees, work, family, etc.
– How to contact me; first assignment - send me e-mail

• Who you are and what you’re all about

– name, background, and current situation
– expectations from the course
– goals down the road 3
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 Course Overview
• Texts
– Hutt and Speh; Heiman and Sanchez
• 3, 50-minute blocks w/ 10 min breaks between
– 5:30-6:20 - topic lecture and discussion
– 6:30-7:20 - small group case analyses and discussion
– 7:30-8:20 - videos, web-sites, pop press, exercises,…
• Knowledge evaluation
Exam 1 (30%), Exam 2 (30%), Project (25%),
Homework (10%), in-class case presentations (5%)
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 Course Topics
• Business marketing • Business Strategy
environment • Product innovation
• Organizational buying • Business services
behavior marketing
• Relationship marketing • Channel strategy
• E-Commerce • Pricing
• Supply Chain • Advertising
Management • Selling and sales
• Market opportunity management
analysis • Controlling
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B2B S&M; A-envnmnt
 The Business Marketing
Environment
(Ch. 1)

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 Business Marketing
• What do we mean by “business marketing?”

• How is business marketing different from

consumer marketing?

• How are they the same?

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B2B S&M; A-envnmnt
 Markets v.s. Marketing
• Business markets
– markets for products and services bought by business,
government, or institutions
– products to be incorporated into other products, used,
consumed, or resold

• Business marketing
– process for determining customer needs and developing
marketing mixes for the organization
– Product, place, promotion, price
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B2B S&M; A-envnmnt
 Business v.s. Consumer
• The nature of the customer, how the product
purchased, and how it is used all distinguish
business marketing and consumer marketing

• A single business customer can account for

significant revenue
– GM spends $80 bill annually for industrial goods and
services; Dupont spends $60 mill/day
– Lincoln Town Car hood = $25 mill/yr to Alcoa
– Medtronic package shipping = $14 mill/yr to FedEx 9
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An E-Commerce Example of the
Size of Business Markets
• Business-to-Consumer (B2C) expected e-commerce
revenue in 2004 is $108 billion

• Business -to- Business (B2B) expected e-commerce

revenue in 2004 is $2.7 trillion

• B2B e-commerce is already 10 times B2C

• GM, Ford, DaimlerChrysler have the world’s largest

Internet business w/ $240 billion in direct purchases as
well as part of the $500 billion that suppliers spend
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 World-Class Business Marketer
• Distinct market-sensing capabilities
• Distinct customer-linking capabilities
• Ability to consistently be the preferred supplier
and considered a business partner
• Ability to create superior value propositions
– understand, translate, create, deliver, evaluate, predict
customer value
– leverage core competencies to do so
• Has a market orientation
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 Market Orientation
• A culture and accompanying behaviors
– customer focused (obsessed)
– ability to generate, disseminate, and use superior
market information (i.e., customers, competitors,
suppliers, environmental forces)
– interfunctional coordination (i.e., R&D, engineering,
manufacturing, sales, logistics, finance, accounting)
– top-to-bottom, side-to-side support and passion

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 Business Markets
• Derived demand means fluctuating demand and
complex forecasting
– forecast end-user consumer demand
– forecast direct customer demand
• this is not merely a translation of end-user forecasts; it also
involves other direct customer-specific issues such as
operations changes, structural changes, personnel changes,
product changes, strategic changes,….)
– pull-through marketing to stimulate demand
– price sensitivity
– demand is often global
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 Business v.s. Consumer
Marketing
• Emphasis on personal selling higher
• Service component more important
• Lengthy and complex price negotiations common
• Large accounts are common
• Long-term relationships are more crucial
• Supply chain efficiency and effectiveness are
more crucial
• Internet is used very differently
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B2B S&M; A-envnmnt
 Basic Supply Chain
3rd Party
Upstream Service
Suppliers Providers
Direct
Suppliers
Manufacturer
Retailer /
Wholesaler
Let’s think of End-use
examples for all Consumer
categories
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 Interfunctional Relationships
Business marketers make decisions that affect many
other functions within their organizations, as well
as other players up and down the supply chain

– Players: R&D, engineering, manufacturing,

procurement, logistics, accounting, finance, technical
support, customer service
– Thus, marketing planning must involves these players
– Thus, marketers must develop strong working
relationships with these players
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 Components of Sound
Interfunctional Relationships
Communication:
– clear, open, continuous, free flowing
Perspective taking:
– take on other’s perspective
Responsiveness:
– responds to requests from other functions quickly and
effectively
Compatibility:
– common ground and shared goals
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 Trends in Purchasing
• Longer-term, closer relationships (supply bases
cut by 50-70 % by most large firms)

• Closer interactions among multiple functions on

all sides of supply chain relationships

• Physical location near supply chain partners

• Marketers need to be business experts 18

B2B S&M; A-envnmnt
 Business Market Customers
Commercial, government, institutions

Commercial:
Users

Dealers and
OEMs
Distributors

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 Classifying Business Market
ENTERING GOODS Goods FOUNDATION GOODS
Raw Materials Installations

• Farm products (e.g., wheat) • Buildings (e.g., offices)

• Natural products (e.g., lumber) • Fixed equipment (e.g., machinery)

Manufactured materials & parts Accessory equipment

• component materials (e.g., steel) • Light factory eqpmnt (e.g., forklifts)

• component parts (e.g., tires) FACILITATING • Office eqpmnt (e.g., desks)
GOODS
Supplies
• Operating (e.g., lubricants)
• Maintenance & repair (e.g., paint, screws)

Business services
• Maintenance & repair (e.g., computer repair)
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B2B S&M; A-envnmnt • Business advisory (e.g., consulting, legal)
 Why Classify Based on Use?

Even if the product is the same (e.g., Smuckers jelly,

silicon chip), the different uses require completely
different marketing strategies by suppliers

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 Some B2B Internet Sites
Ariba: http://www.ariba.com/corp/home
VerticalNet: http://www.verticalnet.com/
EarthWeb: http://www.earthweb.com/
Chemdex: http://www.chemdex.com
FreeMarkets: http://www.freemarkets.com/
RoweCom: http://www.rowecom.com/
Exodus Communications: http://www.exodus.net/

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