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Slide1: 

Chapter 2 Classifying Customers, Organizations, and Markets Prepared by John T. Drea, Western Illinois University

Types of Organizational Customers: 

Types of Organizational Customers Government Units Nonprofit and Not-for-Profit Organizations 85,000 local, state, and federal government units Churches, hospitals, colleges, nursing homes, etc.

Slide3: 

Industrial Distributors Provide economic utilities of form, time, place, and possession to manufacturers Creates assortments of products from many manufacturers Particularly useful for reaching customers too small to justify direct sales efforts

Slide4: 

Value-Added Resellers More than just a distributor or wholesaler. Provides unique offering enhancements tailored to a customer’s needs by combining products/services from other manufacturers. Creates a value network at the user level.

Slide5: 

Original Equipment Manufacturers (OEMs) Purchase products and incorporate those products into their products. Usually the largest-volume users of goods and services. Ex: Intel is an OEM supplier to many computer manufacturers, Firestone was an OEM supplier to Ford for many years.

Slide6: 

Users or End Users (E/U) A manufacturer that purchases goods or services for consumption/ incorporation into their products in such a way that the identity of the purchased product is lost. When Goodyear purchases steel for fabrication into steel belts for tires, Goodyear is the steel manufacturer’s E/U.

Producer Types: 

Producer Types Component Parts and Manufactured Materials Producers Capital Goods Manufacturers Accessory Equipment Suppliers Raw Materials Producers

Producer TypesRaw Materials Producers: 

Producer Types Raw Materials Producers Raw Materials Producers

Producer TypesComponents Parts and Manufactured Materials Producers: 

Producer Types Components Parts and Manufactured Materials Producers Component Parts and Manufactured Materials Producers

Producer TypesCapital Goods Manufacturers: 

Producer Types Capital Goods Manufacturers Capital Goods Manufacturers

Producer TypesAccessory Equipment Suppliers: 

Producer Types Accessory Equipment Suppliers Accessory Equipment Suppliers

Slide12: 

Communities of interested parties who are not direct participants in a market as customers, channel members, suppliers, or competitors. Financial Publics Independent Press Public Interest Groups Internal Publics Publics

Slide13: 

The Macroenvironment influences value creation. Demographic Environment Economic Environment Sociocultural Environment Natural Environment Technological Environment Competitive Environment

Forms of Competition in B2B Markets: 

Forms of Competition in B2B Markets Pure Competition No single entity dominates the market or has much of an influence on price. Most common in commodity industries. Little product differentiation – price is a major component of the marketing mix.

Forms of Competition in B2B Markets: 

Forms of Competition in B2B Markets Monopolistic Competition Many buyers, many sellers. Product is differentiable – can vary in quality, features, and style A range of prices is possible. Promotion and branding are important to product differentiation.

Forms of Competition in B2B Markets: 

Forms of Competition in B2B Markets Oligoplistic Competition Market consists of a few sellers that are sensitive of each others’ strategy. Barriers limit entry of new competitors. Prices are aimed at maintaining market stability. Key is building relationships with large volume customers.

Forms of Competition in B2B Markets: 

Forms of Competition in B2B Markets Pure Monopoly Only one primary seller. Competitors that do exist are small niche players.

An Adaptation of the Value Chain: 

An Adaptation of the Value Chain An Adaptation of the Value Chain

Multinational Value Network: 

Multinational Value Network

The ProductLife Cycle: 

The Product Life Cycle

The Technology Adoption Life Cycle: 

The Technology Adoption Life Cycle

PLC and TALC: 

PLC and TALC Product Life Cycle (PLC) Introduction Growth Maturity Decline Technology Adoption Life Cycle (TALC) Technophiles Visionaries (aim for “quantum leaps”) Pragmatists (want proven solutions) Conservatives Laggards

TALC and How Technology Markets Evolve: 

TALC and How Technology Markets Evolve Chasm A break in the sales growth curve for a new technology. A chasm occurs between visionaries and pragmatists. Tornado The chaos that occurs during a period of rapid growth. A dominant supplier usually emerges from a tornado.

Using the Technology Adoption Life Cycle: 

Using the Technology Adoption Life Cycle The vendor of an innovation passes through technophiles and visionaries before establishing a foothold among pragmatists. Crossing the chasm (called the “market development gap”) between visionaries and pragmatists is related to a change in the entire marketing mix. There are changes in type of customer and what the customers perceives as being of value.

Using the Technology Adoption Life Cycle: 

Using the Technology Adoption Life Cycle Tornado Corresponds to the late introduction/early growth stage of the PLC The market wants to support the market leader – it reduces uncertainty for pragmatists. The market leader has the chance to become the “gorilla” – the gorilla can do what it wants as long as it stays close to what pragmatists desire.