Multistage marketing

Customers in business-to-business markets are sellers of goods and services on their own. Thus, business-to-business suppliers may exert an influence on their customers' buying decisions when performing marketing activities toward the customers of the customers by employing the concept of "multistage marketing". Multi-stage marketing involves all sales-related measures which are aimed at the subsequent market stages ("customers of the customer") which follow one or several primary customers in order to influence the buying behavior of these primary customers. Although the positive impacts of such activities are known, business-to-business companies often exclude the customers further along in the downstream supply chain from their marketing plans. But in a business-to-business context, the demand is always derived from buying decisions made further down the supply chain. The primary customers buy products or services because they want to use them - directly or indirectly - for either the production or the sale of other goods and services. Hence, derived demand, which can be traced to the end-user's primary demand, can be seen as the basis of multistage marketing. The most common form of multistage marketing is ingredient (co-)branding, which occurs when a marketer providing an ingredient or component to an OEM advertises the ingredient to the customer of the assembled product. In addition to ingredient branding, this chapter identifies several other forms of multistage marketing and examines the underlying dimensions and processes of the phenomenon. The design of a marketing strategy using the concept of multistage marketing and its preconditions are discussed on a theoretical basis and are illustrated through concrete examples. The chapter provides a number of best practice examples in order to elucidate the issues concerning multistage marketing and its application in a company's marketing strategy serving business-to-business markets.