International Marketing - Chapter 14: Products and Services for Businesses

Chapter 14Products and Services for BusinessesInternational Marketing15th edition Philip R. Cateora, Mary C. Gilly, and John L. GrahamIntroductionIssues of standardization versus adaptation Less relevance to marketing industrial goods than consumer goodsFactors accounting for greater market similarities in customers of industrial goods versus consumer goods The inherent nature of the product (industrial products and services are used in the process of creating other goods and services)The motive or intent for the user differs (industrial consumers are seeking profit, whereas the ultimate consumer is seeking satisfaction)Roy Philip 2Major Categories U.S. ExportsRoy Philip 3Exhibit 14.1Demand in Global Business-to-Business MarketsThree factors affect the demand in industrial markets differently than in consumer markets. They are:Volatility of industrial demand (demand in industrial markets is by nature more volatile)Stages of economic development (stages of industrial and economic development affect demand for industrial products)Technology and market demand (the level of technology of products and services make their sales more appropriate for some countries than others)4Roy Philip The Volatility of Industrial DemandCyclical swings in demandProfessional buyers tend to act in concertDerived demand accelerates changes in marketsDerived demand can be defined as demand dependent on another sourceMinor changes in consumer demand mean major changes in related industrial demandBoeingWorldwide demand for travel services related to demand for new airplanes Commercial aircraft industry one of the most volatile5Roy Philip Quality and Global StandardsPerception of quality rests solely with the customerLevel of technology reflected in the productCompliance with standards that reflect customer needsSupport services and follow-throughPrice relative to competitive productsQuality standards vary with level of country’s industrialization6Roy Philip ISO 9000 Certification – An International Standard of Quality(1 of 2)Positively affects the performance and stock prices of firmsCertification of the existence of a quality control system a company has in place to ensure it can meet published quality standardsDescribes three quality system models Defines quality concepts Gives guidelines for using international standards in quality systemsGenerally voluntary7Roy Philip ISO 9000 Certification – An International Standard of Quality(2 of 2)EU Product Liability DirectiveNow a competitive marketing tool in Europe and around the worldThe ACSI approach8Roy Philip Business ServicesFor many industrial products the revenues from associates services exceed the revenues from the productsCellular phonesPrintersLeasing capital equipmentServices not associated with productsBoeing at-sea-satellite-launch servicesUkrainian cargo company space rental on giant jetsProfessional services (advertising, banking, healthcare, etc.)9Roy Philip After-Sale ServicesInstallationTrainingSpare and replacement partsDelivery timeCost of partsService personnelAlmost always more profitable than the actual sale of the machinery or product Crucial in building strong customer loyalty10Roy Philip Other Business ServicesClient followersMode of entryLicensingFranchisingDirect investmentProtectionismRestrictions on cross-border data flows11Roy Philip Trade Shows: A Crucial Part of Business-to-Business Marketing (1 of 4)Secondary methods for marketing:Advertising in print mediaCatalogsWeb sitesDirect mailTrade shows have become the primary and most important vehicle for doing business in many foreign countries12Roy Philip Trade Shows: A Crucial Part of Business-to-Business Marketing (2 of 4)Total annual media budget spent on trade events:Europeans – 22 percentAmericans – 5 percent13Roy Philip Trade Shows: A Crucial Part of Business-to-Business Marketing (3 of 4)Trade showsProvide the facilities for a manufacturer to exhibit and demonstrate products to potential usersAllow manufacturers to view competitors productsAre an opportunity to create sales and establish relationships with agents, distributors, franchisees, and suppliersOnline trade showsBecome useful in difficult economic and/or political circumstancesAre obviously a less than adequate substitute for live trade shows14Roy Philip Trade Shows: A Crucial Part of Business-to-Business Marketing (4 of 4)Not a matter of selling the right product the first time instead selling a continuously changed the product to keep it right over timeThe objective of relationship marketing To make the relationship an important attribute of the transactionDifferentiating oneself from competitorsUsing the Internet to facilitate relationship building and maintenanceCisco SystemsSolar Turbines Inc.15Roy Philip