MGT-253 Principles of Marketing

Week 7 of 17MGT-253Women University Multan

Week 7: Business Markets & Strategic Planning

Learning objectives

  • Contrast business markets with consumer markets.
  • Describe organizational buying behavior at a high level.
  • Connect company-wide strategic planning to marketing strategy.

Business markets consist of all organizations that buy goods and services to use in producing other products, or for resale/renting to others at a profit. Marketing to businesses (B2B) differs from marketing to consumers (B2C) in several structural ways.

Consumer vs business markets

  • Fewer buyers, larger volumes.
  • More geographic concentration in some industries.
  • Derived demand (demand for industrial goods driven by demand for consumer goods).
  • More inelastic demand in the short run for many inputs.
  • Professional purchasing; multiple buying influences (users, influencers, buyers, deciders, gatekeepers).
  • Closer supplier–customer relationships; often negotiation and long-term contracts.

Company-wide strategic planning and marketing strategy

Strategic planning is the process of developing and maintaining a strategic fit between organizational goals/capabilities and changing market opportunities. A simple cascade:

  1. Define mission.
  2. Set objectives and goals.
  3. Design business portfolio (which businesses/products to build, hold, harvest, divest).
  4. Plan functional strategies — including marketing.

Marketing strategy then specifies target customers and the value proposition, and designs the marketing mix to deliver that value profitably. Tools you will meet in texts include SWOT, BCG-type portfolio thinking, and product/market expansion grids (market penetration, market development, product development, diversification).

Pakistan example A textile mill selling fabric to garment exporters faces derived demand from foreign apparel retailers. Buying centers may include production managers, quality officers, and finance — so a salesperson who only talks price to one contact may lose the deal.

Key terms

Derived demand
Business demand that comes from demand for consumer goods.
Buying center
All individuals and units participating in the business buying decision.
Strategic planning
Creating a fit between goals/capabilities and market opportunities.
Marketing strategy
Logic by which the company hopes to create customer value and achieve profitable relationships.

Self-check

  1. List four differences between B2B and B2C markets.
  2. What is derived demand? Give a Multan-relevant illustration.
  3. How does a clear mission statement help marketing decisions?
  4. Name the four product/market expansion paths and one example each.