Business marketing,
also called industrial marketing, is the marketing of goods and services to
individuals and organizations for purposes other than personal consumption.
Chanel’s objective of marketing their products is clearly for personal
consumption. However, individuals and organizations are frequently purchase
Chanel’s products for business purpose. For example, individuals, act as purchasing
agents, purchase Chanel’s products to sell on their online store. Also, some
companies frequently launch a campaign to give Chanel products as a gift to
their lucky customers.
Strategic
Alliances
A strategic alliances,
sometime called a strategic partnership, is a cooperative agreement between
business firms. Chanel has strategic partnership with retailers, like Macy’s and
Bloomingdale’s, to authorize some of Chanel’s products available in Macy’s and
Bloomingdale’s. Chanel has a counter of fragrances and cosmetic products in
Macy’s and Bloomingdale’s.
Business
versus Consumer Markets
The basic philosophy
and practice of marketing are the same whether the customer is a business
organization or a consumer. However, business do have characteristics different
from consumer markets. Chanel focuses on the consumer markets. Let’s assume
that Chanel focuses on business markets, what are the differences?
ð Consumer
marketing, sales are made to individuals who are the final decision makers, yet
they may be influenced by family members or friends. Business marketing, sale
is made to a business or firm.
·
Demand- Chanel produces reasonable amount
of their products, but Chanel also put limit on some of its products to remain
exclusive. It produces based on their consumers and itself. Assume that Chanel focus on business market,
the demand for Chanel will be called derived demand. Derived demand is a demand for
a commodity, service, etc., that is a consequence of the demand for something
else.
·
Purchase Volume- If Chanel is a business
marketing company, it will sell much more products than of a consume product
company. Business consumer buy in much larger quantities than consumer.
·
Number of Customers-If Chanel as a business
marketer usually have far fewer customers than consumer marketers. Chanel
currently have a lot of loyal customers because of its exclusivity.
·
Location of Buyers-Business customers
tend to be much more geographically concentrated than consumers. If Chanel is
business marketer, its focus will be in California, Illinois, Michigan, New
Jersey, New York, Ohio, and Pennsylvania. Chanel currently operates its retail
stores only in New York, New Jersey, Connecticut, and Pennsylvania because its
objective is to be upscale.
·
Distribution Structure-Chanel’s
distribution structure is quite simple. Chanel adopt both direct and dual
distribution on certain products. In business marketing, Chanel’s channel of
distribution will be shorter. It only has to adopt the direct channels, where manufacturers
market directly to users.
·
Nature of Buying- Chanel, as of consumer
marketing company, the nature of buying of its customers are based upon their
customers’ needs or wants and the ability and willingness to buy. If Chanel as
the business marketing company, its consumer will be professionally trained
purchasing buyers who spend their entire career purchasing products.
·
Primary Promotional Method-Chanel has
adopted personal selling, public relations, and advertising for sales
promotion. On other hand, if Chanel as business marketing company, it will tend to emphasize
personal selling in their promotion efforts.