Homework(MK)
Week 8 Overview
Principles of Marketing
MRKT 310
Our last week is all about some special topics. We would be remiss by not addressing them in a principles course so that your learning outcome will include a broader picture of the marketing discipline. Perhaps we’ve even piqued your interest in becoming a marketing major!
Special Topics in Marketing
B2B, MIS and Marketing metrics
8.1 The characteristics of Business-to-Business (B2B) markets
8.2 Types of B2B buyers
8.3 Buying centers
8.4 Segmenting B2B customers
8.5 Types of B2B offerings
8.6 Stages in B2B selling process and B2B buying situations
8.7 Marketing Information Systems
8.8 Predicting, monitoring and measuring marketing strategies
Our special topics include:
A brief overview of Business-to-Business marketing showing you both how it is the same as Business-to-Consumer marketing, but pointing out those few concepts unique to B2B situations.
We also need to introduce you to Marketing Information Systems. We have stressed throughout the course the importance of marketing research and the compilation of data on consumers, competitors and the environments. A good place to store all this data is in a well designed and functional MIS system that can generate management reports marketers can use to monitor trends, customers and performance. We won’t be covering the basics of marketing research as you should have been exposed to the research process in a prior statistics course.
Lastly, the best marketing plans are useless if they don’t include ways to assess their effectiveness; so we will take a short look at financial performance metrics and plan performance metrics.
8.1 Characteristics of B2B markets
More products sold in B2B than B2C markets
Business products can be very complex
Complex buying dynamics at organizations
Requires more personal selling
Based on derived demand
More fluctuations in demand
Special Topic 1: Most marketing careers are likely to begin in a B2B environment as those marketing activities comprise the bulk of marketing budgets worldwide.
A basic notion that makes B2B different from B2Cd is the concept of derived demand. In other words, a B2B marketer would have nothing to market if it wasn’t needed for some other product. This is why when consumer spending goes down, the effect is widespread in terms of businesses hurt and people losing jobs that seem totally unrelated to the lost revenues of the product no longer being bought.
Differences between Business-to-Consumer markets and Business-to-Business markets
Here’s a handy chart that outlines the major differences between B2B and B2C for easy reference.
8.2 Types of B2B buyers
Everyone BUT the end user
Producers
Resellers
Governments
Institutions
Understanding B2B buyers is pretty simple — everyone but the end user, that would be a B2C buying situation as we have been discussing throughout the course before this week. Many students at UMUC work at governments or nonprofit institutions. You may in fact be engaged in B2B marketing in some way.
8.3 Buying Centers
People who make buying decisions within an organization (such as procurement department)
Decision process may also include one or more of the following:
department using the products
influencers
gatekeepers
deciders
Every business has their own processes and procedures for procuring what it wants to buy to fill its needs. The main players are listed above.
8.4 Segmenting B2B markets
Segmentation Bases
Price-focused segment
Quality and brand-focused segment
Service-focused segment
Partnership-focused segment
B2B market segments are prone to be more rational in their characteristics often focusing on one of the four segmentation bases outlined above. The psychographic characteristics we discuss for consumer markets generally don’t apply here.
8.5 Types of B2B offerings
Primary categories are:
capital equipment offerings
raw materials offerings
original equipment manufacturing
maintenance, repair and operations offerings
facilities offerings
B2B offerings generally all into one of these categories. We don’t call them convenience, impulse, routine or shopping offerings like we do in B2C.
8.6 Stages in the B2B buying process
and B2B buying situations
The B2B buying process
You will notice that this chart uses the same sort of process as we learned in B2C beginning with need recognition and ending with an order placed. Depending on the offering, whether it is a repeat order or a new order, the speed of the process and the number of people involved is affected.
8.7 Marketing Information Systems
MIS = a way to manage the vast amount of information companies have on hand to make good decisions
Should include the following components
system for recording internally generated data and reports
system for collecting marketing intelligence on an ongoing basis
marketing analytics software to help managers with their decision making
system for recording marketing research information
Special Topic 2: A Marketing Information System is generally a technology-based database of the key information a company needs to compete in the marketplace. The technology itself is not an MIS, rather MIS is a systemic process of capturing and processing information into useful information for decision making.
8.8 Predicting, monitoring, and
measuring marketing strategies
Financial measures
Return on investment (ROI) or return on marketing investment (ROMI)
Break-even point
Contribution to margin
Market demand measures
Customer lifetime value
Performance measures
Special Topic 3: Finally, we come to our last topic for this course, predicting, monitoring and measuring marketing strategies. Like an MIS system, not all metrics are the same for every company so we can’t provide a handy list of things to measure. However, metrics do fall into the four categories listed above.
The financial measures are long used and proven to measure a company’s financial performance, to which marketing activities have contributed. In the readings you will see a small modification to the traditional ROI to include Return on Marketing Activities. While this is a good measure, it is calculated either as a predictor of how marketing activities will perform prior to a marketing plan implementation, or at the tail end of a marketing plan implementation when it is too late to make changes to the marketing strategies.
That is why performance measures, preferable in real time, are an excellent way to monitor a marketing plan ongoing allowing marketing managers to tweet, extend, pull or whatever tactics may be at their immediate disposal to improve the performance.
The middle two, market demand measures and customer lifetime value measures, are less typical. Only large companies really have the wherewithal to run the market demand projections allowing for every possible scenario to be considered prior to launching a new offering. And, although customer lifetime value is quite a simple concept, only companies deeply committed to filling their customer needs take the time, energy and expense to attract, retains and grow their most valuable customers.
Week 8
Assessments
Week 8 Discussion Forum participation
Week 8 Writing Assignment
Week 8 Quiz
All due Tuesday
by 11:59 pm,
Eastern Time
And that’s it, folks. We have come to the end of your study of marketing principles. We sincerely hope the course has met your expectations and you now feel comfortable discussing marketing in your career and at your company. As we said in the beginning, a main goal is to give you just enough information about marketing to be effective in any role you assume. And if you want or have a marketing role, you should be looking forward to the remaining MRKT courses, which will go into much more detail on all of the topics we have discussed herein.
Questions or concerns?
Be sure to take advantage of the General Discussion topic in the Week 8 Discussion Forum to ask any questions, get clarifications, or otherwise seek the advice and assistance of your faculty member.
Last chance for questions or clarifications! See you in the discussion forum.