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Ch. 2: Business to Business Environment—Customers, Organizations, and Markets

Ch. 2: Business to Business Environment—Customers, Organizations, and Markets. Organizational Customers. Non-Profit and Not-for-Profit Organizations. Commercial Enterprises. Government Units. Commercial Enterprises. Industrial Distributers Value Added Resellers

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Ch. 2: Business to Business Environment—Customers, Organizations, and Markets

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  1. Ch. 2: Business to Business Environment—Customers, Organizations, and Markets

  2. Organizational Customers Non-Profit and Not-for-Profit Organizations Commercial Enterprises Government Units

  3. Commercial Enterprises • Industrial Distributers • Value Added Resellers • Original Equipment Manufacturers (OEM) • Users and End Users

  4. Commercial Enterprises: Industrial Distributers • Provide 4 types of utility: • Form, Time, Place, Possession • Assortment of Products from many manufacturers based on segment needs “Reduce the discrepancy of assortment” • Serves smaller customers where direct representation is not efficient

  5. Commercial Enterprises: Value Added Resellers • More than just a distributor • Provides unique, complete Offering from many sources • Creates a value network at the user level.

  6. Commercial Enterprises: Original Equipment Manufacturers (OEM) • Purchase products and incorporate those products into their products. • Usually the largest-volume users of goods and services. Ex: Intel is an OEM to many computer manufacturers, Goodyear is an OEM to the auto industry.

  7. Commercial Enterprises: Users and End Users • A manufacturer that purchases goods or services for consumption or incorporation into its own products • Identity of the purchased product becomes lost Ex: When Goodyear purchases steel for fabrication into steel belts for tires, Goodyear is the steel manufacturer’s end user

  8. Government Units: 85,000 Local, State and Federal Units • More than 35% of GNP • Largest consuming group in the United State.

  9. Nonprofit and Not-for-Profit Organizations • Consumer grouping consists of: • Hospitals • Churches • Colleges • Nursing Homes

  10. Product Types • Component Parts and Manufactured Materials Producers • Raw Material Producers • Accessory Equipment Suppliers • Capital Goods Manufacturers

  11. Product Type: Raw Materials Producer • Compete in price sensitive markets • Seek Value Added positions • Product loses identity once incorporated into customer’s product • Dominated by a few very large producers

  12. Product Type: Component Parts and Manufactured Materials Producers • Parts retain their same form when incorporated • Retains identity when incorporated into consumer’s product • Differentiated by value added EX: Seagate Disc Drives in Hewlett Packard Computers

  13. Product Type: Capital Goods Manufacturer • Consists of large purchases with high risk to customer • Many parts of customer orgainzation involved in decision • Customers expect installation, equipment and accessories

  14. Product Type: Accessory Equipment Suppliers • Equipment that works with another offering • Accessories can be added to a bundle opportunity by a channel intermediary • Produced by an independent supplier • Add value by complying with industry standards for primary offering

  15. Business to Business Market Environment: Publics • Communities of interested parties who are not direct participants in a market as customers, channel members, suppliers, or competitors.

  16. Business to Business Market Environment: Types of Publics • Financial Publics • Independent Press • Public Interest Groups • Internal Publics • All may have interests because of economic or societal effects of activities • Often may be considered stakeholders in the buying center

  17. The Macro-Environment Influence Value Creation

  18. The Macro-Environment: The Competitive Environment • Influences value creation, behavior of market participants • Various Types: • Pure Competition • Monopolistic Competition • Oligopolistic Competition • Pure Monopoly

  19. Exhibit 2-3 The Multidimensional Value Network Value Activities TotalOffering ValueEnabling ValueCreating Efforts of collaborators at different levels in the Value Network combine to create the total offering for the customer. See Chapter 1, Exhibit 4 for greater detail.

  20. Exhibit 2-5 The Product Life Cycle (PLC) Maturity Sales Revenue/ period Growth Decline Introduction Time

  21. Conservatives Pragmatists Sales from New Adopters/ period Visionaries Laggards Technophiles Time Exhibit 2-6 The Technology Adoption Life Cycle (TALC)

  22. Time TALC and PLC Exhibit 2-7 A Hypothetical TALC and PLC for Wireless LANs PLC –Total Sales TALC - Sales from New Adopters/ period

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