An Introduction to Business Marketing

This chapter explores some of the principal characteristics used to define business markets and marketing. It establishes the key elements of business-to-business (B2B) marketing and makes comparisons with the better-known business-to-consumer (B2C) sector. This leads to a consideration of appropriate definitions, parameters and direction for the book. After setting out the main types of organisations that operate in the B2B sector and categorising the goods and services that they buy or sell, the chapter introduces ideas about the business marketing mix, perceived value, supply chains, interorganisational relationships and relationship marketing. This opening chapter lays down the vital foundations and key principles which are subsequently developed in the book.

Relationship Marketing

The relationship marketing approach is presented here as a contemporary basis upon which to consider business marketing. It is regarded as a successor to the 4Ps approach, which is considered by many to be irrelevant and outdated. The development of collaborative and mutually rewarding relationships between buyers and sellers is considered to be fundamentally more appealing and an intuitively appropriate interpretation of business-to-business marketing. This view also sees the development of partnerships with other organisations as more suitable than former adversarial ideas based on competition and where the sole focus is on customers. Organisations are shown to have a portfolio of relationships with a range of stakeholders, most notably suppliers, employees, customers and shareholders. This chapter considers the nature, development and characteristics of interorganisational relationships and examines the potential of technology to enhance relationships with customers and suppliers based on trust and commitment.

Supply Chains, Channel Structures and Networks

This chapter deals with two main elements. The first concerns the management of the logistical and physical flow of goods from producers to end user customers. This is referred to as ‘supply chain management’. The second element concerns the management of the marketing channels. These are structural configurations organisations use to add value and which enable end users to access finished goods (and services) in the most convenient way. Attention is given to conventional marketing channel structures, vertical marketing systems and network approaches to interorganisational channel structures.

Personal Selling and Key Account Management

The importance of personal selling in the B2B communications mix should not be underestimated. Although all the tools can play a significant part in an organisation’s overall marketing communications activities, personal selling, delivered through a sales force, has traditionally been the most potent. Personal contact and selling can be critical for the development of meaningful collaborative relationships between customers and suppliers. In this final chapter, consideration is given to the role and characteristics of personal selling. However, the main thrust is centred on the impact of selling on interorgani- sational relationships and how the other communication tools can be blended to provide cost and communication effectiveness. In addition, issues concerning the management and organisation of the sales force are explored before concluding with an examination of key account management.

Marketing Channels

This chapter is the first of three that examine issues concerning marketing channels and the intermediaries that populate them. In this, attention is focused on understanding the principles and core concepts associated with marketing channels. In particular, consideration is given to their purpose, basic structure and key intermediaries, their characteristics and contribution to the way in which channels work. This chapter provides foundation material in order to explore some of the more advanced ideas about channel structure, design, interaction and networks that follow in Chapter 7. The last of the three, Chapter 8, examines the way in which behaviour within marketing channels can be managed.

Organisational Buying Behaviour

This chapter introduces traditional views about organisational buying behaviour, before progressing to consider the importance of relationships and the contribution that systems and technology have made to this aspect of business marketing. The chapter starts with a comparison of the main characteristics associated with both consumer and organisational purchasing behaviour. Then, following an examination of the decision making unit and the decision making processes generally assumed to be adopted by organisations, the focus moves to reflect upon the different influences that can impact on an organisation’s purchasing activities. The last section looks at the nature of uncertainty and the way in which organisations attempt to reduce buyer-perceived risk. It ends by examining how relationships between buyers and sellers can evolve and affect the purchasing behaviour of organisations.

The Business Marketing Communications Mix

Digital technologies have had a profound impact on the way in which organisations communicate with each other. However, this is not to suggest that the influence of the traditional offline communication tools has waned, indeed it can be argued that marketing communications have been augmented by the application of new tech- nologies. In this chapter each of the three elements that make up the marketing communica- tions mix is considered; tools, media and messages. Consideration is given to the key characteristics and effectiveness of each of the primary tools used in B2B marketing communications. The chapter then examines each of the main media from a com- munication perspective and concludes by considering the type of messages used to reach business audiences.

Principles of Business Marketing Communications

The main aim of this chapter, and the next, is to develop an understanding of the principles and characteristics of marketing communications. From an exploration of its role and tasks, the chapter considers some of the strategic issues and explores mar- keting communications strategy from a business audience perspective. A framework for the development of marketing communication plans follows. B2B branding and integrated marketing communications are explored before examin- ing marketing channel-based communications. If channels are to operate successfully and inter-firm relationships are to be developed for the benefit of all channel members, then sound trade channel communications are crucial. The chapter concludes with an examination of relationship-based marketing communication, and in particular, the nature, role and dynamics associated with client/agency based relationships.

Strategy Segmentation, Positioning and Pricing

This chapter considers some of the elements that have strategic significance, namely segmentation, positioning and pricing. Segmentation is presented as a less than perfect form of marketing management, as consideration is given to some of the problems associated with choosing between segments and implementing the whole segmentation, targeting and positioning process successfully. In particular, the barriers to segmentation are examined. The following section examines how businesses should determine particular positioning strategies. Just as optimal target markets should be derived in the light of customer needs and seller resources and strategies, so positioning needs to take into account the requirements of all parties to a marketing relationship. The chapter concludes with a consideration of pricing issues in business markets.

Managing B2B Relationships

Following the exploration of the nature and characteristics of marketing channels, it is necessary to consider some of the managerial issues, processes and systems associated with maintaining and developing collaborative relationships. First, the nature, dispersion and use of power in relationships is examined, then time is spent looking at channel conflict and ways in which it can be minimised, recognising that some conflict can be constructive. Following a consideration of two important concepts, trust and commitment, which are considered to be a foundation of successful B2B relationships, the chapter concludes with a brief overview of the role of technology in managing relationships with a focus on CRM systems.