Friday, May 20, 2011

Business Marketing

Business Marketing is the practice of individuals, or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. Also known as industrial marketing, business marketing is also called business-to-business marketing, or B2B marketing, for short. (Note that while marketing to government entities shares some of the same dynamics of organizational marketing, B2G Marketing is meaningfully different.)

Origins of Business Marketing

In the broadest sense, the practice of one purveyor of goods doing trade with another is as old as commerce itself. As a niche in the field of marketing as we know it today, however, its history is more recent. In his introduction to Fundamentals of Business Marketing Research, J. David Lichtenthal, professor of marketing at the City University of New York's Zicklin School of Business, notes that industrial marketing has been around since the mid-19th century, although the bulk of research on the discipline of business marketing has come about in the last 25 years.

Morris, Pitt and Honeycutt, 2001, point out that for many years business marketing took a back seat to consumer marketing, which entailed providers of goods or services selling directly to households through mass media and retail channels. This began to change in middle to late 1970s. A variety of academic periodicals, such as the Journal of Business-to-Business Marketing and the Journal of Business & Industrial Marketing, now publish studies on the subject regularly, and professional conferences on business-to-business marketing are held every year. What's more, business marketing courses are commonplace at many universities today. In fact, Dwyer and Tanner (2006) point out that more marketing majors begin their careers in business marketing today than in consumer marketing.

Business Markets -- (Business Marketing Management:B2B By Michael D Hutt & Thomas w Speh) Business markets are markets for products & services, local to international, bought by; 
1. Businesses, 
2.Government Bodies, 
3.Institutions such as Hospitals or corporates for incorporation (E.G; ingredient materials or components) for consumption(E.g process materials, office supplies & consulting services) for use or for resale..... The only markets not of direct interest are those dealing with products or services which are principally directed at personal use or consumption such as packaged grocery products , home appliances, or consumer banking The factors that distinguish business marketing from consumer marketing are the nature of the customer & how the customer uses the product.

Business & consumer markets - the link

Business markets have a derived demand - this means that a demand in business markets exists only because of another demand somewhere in the consumer market. Lets take a few examples :

 • The government of India wishes to purchase equipment for a nuclear power plant in Jaitapur - a business market demand. The underlying consumer demands that have triggered this demand are that the people of India are now consuming more electricity - they have bought more washing machines, microwaves, computers, charged devices etc.
 • The demand for restaurant furniture is based on the consumer demand of more restaurants.

Thus business markets do not exist in isolation. Cities or countries with growing consumption are generally growing business markets too.

A single consumer market demand can give rise to hundreds of business market demands. The demand for cars in India creates demands for steel, tyres, forgings, castings, plastic components which in turn has created demands for mining, rubber, forging machines, casting sand and polymers. Each of these growing demands has further triggered more demands. Thus as the spending power of citizens increase, the country generally sees a upward wave in its economy.

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