Lecture International marketing (14/e) - Chapter 13

In this chapter, students will be able to understand: The importance of derived demand in industrial markets, how demand is affected by technology levels, characteristics of an industrial product, the importance of ISO 9000 certification, the growth of business services and nuances of their marketing, the importance of trade shows in promoting industrial goods.

I n t e r n a t i o n a l M a r k e t i

n g

Products and Services for Business

What Should You Learn?

markets

What Do I Need to Know?

of their marketing

industrial goods

industrial products and services

Global Perspective Intel, the Boom

and the Inescapable Bust

what goes up must come down

– Less relevance to marketing industrial goods than consumer

goods

in customers of industrial goods versus

consumer goods

– The inherent nature of the product

– The motive or intent for the user differs

Major Categories U.S Exports

Exhibit 13.1

Demand in Global Business-to-Business Markets

volatile

affect demand for industrial products

make their sales more appropriate for some

countries than others

The Volatility

of Industrial Demand

– Professional buyers tend to act in concert

– Derived demand accelerates changes in markets

• Derived demand can be defined as demand

dependent on another source

major changes in related industrial demand

– Boeing

► Worldwide demand for travel services related to demand for new airplanes

► Commercial aircraft industry one of the most volatile

Derived Demand Example

Exhibit 13.2

Stages of Economic Development

Technology and Market Demand

advanced products

– Expanding economic and industrial growth in Asia

– The disintegration of the Soviet empire

– The privatization of government-owned industries worldwide

those whose products are:

– Technologically advanced

– Of the highest quality

– Accompanied by world-class service

Quality and Global Standards

customer

– Level of technology reflected in the product

– Compliance with standards that reflect customer needs

– Support services and follow-through

– Price relative to competitive products

industrialization

Quality is Defined by the Buyer

the buyer

of use

– Climate

– Terrain

Quality is Defined by the Buyer

ISO 9000 Certification –

An International Standard of Quality

prices of firms

system a company has in place to ensure it can meet published quality standards

– Describes three quality system models

– Defines quality concepts

– Gives guidelines for using international standards in quality

systems

ISO 9000 Certification –

An International Standard of Quality

around the world

Business Services

associates services exceed the revenues from the products

– Cellular phones

– Printers

– Boeing at-sea-satellite-launch services

– Ukrainian cargo company space rental on giant jets

– Professional services (advertising, banking, healthcare, etc.)

sale of the machinery or product

Expansion of U.S Law Firms in

Selected Cities Worldwide

Exhibit 13.3

Trade Shows: A Crucial Part of Business-to-Business Marketing

– Advertising in print media

– Catalogs

– Web sites

– Direct mail

most important vehicle for doing business in many foreign countries

Trade Shows: A Crucial Part of Business-to-Business Marketing

events:

– Europeans – 22 percent

– Americans – 5 percent

Trade Shows: A Crucial Part of Business-to-Business Marketing

– Provide the facilities for a manufacturer to exhibit and

demonstrate products to potential users

– Allow manufacturers to view competitors products

– Are an opportunity to create sales and establish relationships

with agents, distributors, franchisees, and suppliers

– Become useful in difficult economic and/or political

circumstances

– Are obviously a less than adequate substitute for live trade

shows

– To make the relationship an important attribute of the transaction

► Differentiating oneself from competitors

building and maintenance

– Cisco Systems

– Solar Turbines Inc.

the exact needs of customers

attention

– To level of economic and technological development of each

market to determine the buyer’s assessment of quality

business-to-business markets is by nature more volatile than in most consumer markets

Summary

development and the quality of educational

systems across countries

• Product or service quality is defined by customers

• After-sale services are an important aspect of

industrial sales

• Trade shows are an especially important

promotional medium in business-to-business

marketing