Business Economics

Business-to-Business Economics

Business-to-business suppliers face a complex market and economic environment. Their direct customers and end customers bring a wide spectrum of criteria into their purchase decision processes, reflecting distinctions in business models, firm economics, market characteristics, and other factors. In this paper, we develop explicit economic models which can help suppliers understand their own potential for margin improvement and the ways in which they can help to improve their direct customer’s profitability. These models can help the business-to-business supplier identify approaches to pricing and segmentation that can simultaneously improve profitability for both themselves and their direct customers.


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