Nature of B2B Demand

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“The nature of the demand for industrial products or services is different compared with consumer products and poses unique challenges”. Do you agree or disagree with the statement? Support your position with reference to an example of a company chosen from one of the following industries – automotive, telecommunications, information technology (computing), fast moving consumer goods and medical equipment. The nature of business to business marketing differs in many areas with business to consumer marketing. The different nature of business to business marketing poses unique challenges and raises issues that differ from issues arising from consumer marketing. The nature of demand, or the characteristics of demand for business products…show more content…
Another characteristic that differentiate between business-to-business market demand and business-to-consumer is that business-to-business products tend to have inelastic demand (Hutt & Speh, 2010). This principle shows that business-to-business product has demand characteristics with no correlation with price. BD had increased the price of its evacuated blood collection tube between 1979 to 1985 from 6 cents per unit to 8 cents per unit, where as its competitor, Terumo, a Japanese firm has kept its price at 6.5 cents per unit. However, BD has not lost its market share, which was kept at roughly 80 per cent while Terumo had increased its market share from 10 per cent to 20 per cent (Cespedes & Rangan, 1993). This change in market share for Terumo, can be explained by other means rather than arguing that Terumo, by keeping its price, absorbing any cost increases and inflation, has created an elastic demand like in business-to-consumer. This argument is highlighted in the fact that in the market for blood collection needles in the same period, even though both BD and Terumo had kept its per unit price at 7.5 cents, BD market share has dropped from 40 per cent to 30 BD while Terumo doubled its market share from 25 per cent to 50 per cent (Cespedes & Rangan, 1993). Finally, a global market perspective must be taken by a marketer in business to business marketing. The demand for many business

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