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InternationalMarketing ProductsandServicesforBusinessesChapter13 14thEditionPhilipR CateoraMaryC GillyJohnL Graham McGraw Hill IrwinInternationalMarketing14 e Copyright 2009byTheMcGraw HillCompanies Inc Allrightsreserved WhatShouldYouLearn TheimportanceofderiveddemandinindustrialmarketsHowdemandisaffectedbytechnologyCharacteristicsofanindustrialproductTheimportanceofISO9000certification 13 2 WhatDoINeedtoKnow ThegrowthofbusinessservicesandnuancesoftheirmarketingTheimportanceoftradeshowsinpromotingindustrialgoodsTheimportanceofrelationshipmarketingforindustrialproductsandservices 13 3 GlobalPerspectiveIntel theBoomandtheInescapableBust Inindustrialmarkets includingglobalones whatgoesupmustcomedownIssuesofstandardizationversusadaptationLessrelevancetomarketingindustrialgoodsthanconsumergoodsFactorsaccountingforgreatermarketsimilaritiesincustomersofindustrialgoodsversusconsumergoodsTheinherentnatureoftheproductThemotiveorintentfortheuserdiffers 13 4 MajorCategoriesU S Exports Exhibit13 1 13 5 DemandinGlobalBusiness to BusinessMarkets DemandinindustrialmarketsisbynaturemorevolatileStagesofindustrialandeconomicdevelopmentaffectdemandforindustrialproductsTheleveloftechnologyofproductsandservicesmaketheirsalesmoreappropriateforsomecountriesthanothers 13 6 TheVolatilityofIndustrialDemand CyclicalswingsindemandProfessionalbuyerstendtoactinconcertDeriveddemandaccelerateschangesinmarketsDeriveddemandcanbedefinedasdemanddependentonanothersourceMinorchangesinconsumerdemandmeanmajorchangesinrelatedindustrialdemandBoeingWorldwidedemandfortravelservicesrelatedtodemandfornewairplanesCommercialaircraftindustryoneofthemostvolatile 13 7 DerivedDemandExample Exhibit13 2 13 8 StagesofEconomicDevelopment Stage1 thetraditionalsocietyStage2 preconditionsfortakeoffStage3 takeoffStage4 drivetomaturityStage5 theageofmassconsumption 13 9 TechnologyandMarketDemand TrendsspurringdemandfortechnologicallyadvancedproductsExpandingeconomicandindustrialgrowthinAsiaThedisintegrationoftheSovietempireTheprivatizationofgovernment ownedindustriesworldwideThecompanieswiththecompetitiveedgewillbethosewhoseproductsare TechnologicallyadvancedOfthehighestqualityAccompaniedbyworld classservice 13 10 QualityandGlobalStandards PerceptionofqualityrestssolelywiththecustomerLeveloftechnologyreflectedintheproductCompliancewithstandardsthatreflectcustomerneedsSupportservicesandfollow throughPricerelativetocompetitiveproductsQualitystandardsvarywithlevelofcountry sindustrialization 13 11 QualityisDefinedbytheBuyer HowwellaproductmeetsthespecificneedsofthebuyerTheprice qualityrelationshipProductdesignmustbeviewedfromallaspectsofuseClimateTerrain 13 12 QualityisDefinedbytheBuyer TotalQualityManagement TQM LackofuniversalstandardsCountry specificstandardsThemetricsystem 13 13 ISO9000Certification AnInternationalStandardofQuality PositivelyaffectstheperformanceandstockpricesoffirmsCertificationoftheexistenceofaqualitycontrolsystemacompanyhasinplacetoensureitcanmeetpublishedqualitystandardsDescribesthreequalitysystemmodelsDefinesqualityconceptsGivesguidelinesforusinginternationalstandardsinqualitysystemsGenerallyvoluntary 13 14 ISO9000Certification AnInternationalStandardofQuality EUProductLiabilityDirectiveNowacompetitivemarketingtoolinEuropeandaroundtheworldTheACSIapproach 13 15 BusinessServices FormanyindustrialproductstherevenuesfromassociatesservicesexceedtherevenuesfromtheproductsCellularphonesPrintersLeasingcapitalequipmentServicesnotassociatedwithproductsBoeingat sea satellite launchservicesUkrainiancargocompanyspacerentalongiantjetsProfessionalservices advertising banking healthcare etc 13 16 After SaleServices InstallationTrainingSpareandreplacementpartsDeliverytimeCostofpartsServicepersonnelAlmostalwaysmoreprofitablethantheactualsaleofthemachineryorproductCrucialinbuildingstrongcustomerloyalty 13 17 OtherBusinessServices ClientfollowersModeofentryLicensingFranchisingDirectinvestmentProtectionismRestrictionsoncross borderdataflows 13 18 ExpansionofU S LawFirmsinSelectedCitiesWorldwide Exhibit13 3 13 19 TradeShows ACrucialPartofBusiness to BusinessMarketing Secondarymethodsformarketing AdvertisinginprintmediaCatalogsWebsitesDirectmailTradeshowshavebecometheprimaryandmostimportantvehiclefordoingbusinessinmanyforeigncountries 13 20 TradeShows ACrucialPartofBusiness to BusinessMarketing Totalannualmediabudgetspentontradeevents Europeans 22percentAmericans 5percent 13 21 TradeShows ACrucialPartofBusiness to BusinessMarketing TradeshowsProvidethefacilitiesforamanufacturertoexhibitanddemonstrateproductstopotentialusersAllowmanufacturerstoviewcompetitorsproductsAreanopportunitytocreatesalesandestablishrelationshipswithagents distributors franchisees andsuppliersOnlinetradeshowsBecomeusefulindifficulteconomicand orpoliticalcircumstancesAreobviouslyalessthanadequatesubstituteforlivetradeshows 13 22 RelationshipMarketinginBusiness to BusinessContexts NotamatterofsellingtherightproductthefirsttimeInsteadsellingacontinuouslychangedtheproducttokeepitrightovertimeTheobjectiveofrelationshipmarketingTomaketherelationshipanimportantattributeofthetransactionDifferentiatingoneselffromcompetitorsUsingtheInternettofacilitaterelationshipbuildingandmaintenanceCiscoSystemsSolarTurbinesInc 13 23 TheGlobalProjectTeam CustomerSalesengineerApplicationengineerEngineeringandcontrolsystemsProjectmanagerManufacturingtechniciansCustomerservicesSuppliers 13 24 Summary Industrialmarketingrequirescloseattentiontothee
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