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Transcript of 2-1 Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
2-2-11
Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display
2-2-22
Chapter 2
The Character ofThe Character of
Business MarketingBusiness Marketing
2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
2-2-33
CESSNA AIRCRAFT COMPANY TURNAROUND STRATEGY
INTEGRATED THREE CRITICAL PROCESSES:
1.NEW PRODUCT DEVELOPMENT
2.STRATEGIC SOURCING
3.SUSTAINING PRODUCTION PRODUCTION
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2-2-44
SUPPLY CHAIN MANAGEMENT
SCM INVOLVES . . .
INFORMATION SHARING
JOINT PLANNING
COORDINATION OF EFFORTS TO
• ELIMINATE WASTE
• BE INNOVATIVE
• IMPROVE QUALITY
• PROVIDE FLEXIBILITY
2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
2-2-55
BUSINESS TO BUSINESS:WHAT DETERMINES A
SUCCESSFUL RELATIONSHIP?
• THE SELLER’S MOTIVATION TO RELATE
• THE BUYER’S MOTIVATION TO RELATE
IF THEY AREN’T EQUALLY MOTIVATED IT WON’T BE AN EQUAL RELATIONSHIP
MOTIVATION !
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2-2-66
BUSINESS TO BUSINESS:THE TYPES OF RELATIONSHIPS
BUYER’S MOTIVATION TO RELATE IS
WHEN SELLER’S MOTIVATION TO RELATE IS
LOW
HIGH
LOWSELLER’S ADVANTAGE
RESULTS INSTRATEGIC PARTNERSHIPS
TRANSACTIONAL RELATIONSHIPS
RESULTS INBUYER’S ADVANTAGE
HIGH
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2-2-77
High
Low
Seller’s motivation to relate
Buyer’s motivation
to relateHighLow
Seller’s market
Seller-maintained relation Joint
relationshipmaintenance
Buyer-maintained relation
Buyer’s Market
Discrete exchange(spot contracts)
Noexchange
EXHIBIT 2-2
THE REALM OF RELATIONSHIPS
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2-2-88
STRATEGIC PARTNERSHIPS
OCCUR WHEN BOTH PARTIES HAVE
MUTUALLY STRONG INTERESTS
IN MAINTAINING AN
ONGOING EXCHANGE
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2-2-99
JIT RELATIONSHIPS
A SUPPLIER PRODUCES AND DELIVERS
PRECISELY . . .
• THE NECESSARY QUANTITIES
• AT THE NECESSARY TIME
• WITH THE NECESSARY PERFORMANCE
SPECIFICATIONS . . .
EVERYTIME
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2-2-1010
GOING FOR HIGHPERFORMANCE RELATIONSHIPS
DEVELOP
A
COMMON
GROUND
BUYERS
Want:
Reliable delivery without interruptions
Reliable products Reliable products with low rejection with low rejection and defect ratesand defect rates
Efficient lead timesEfficient lead times
SELLERS
Want to:
Sell Large Volumes
Sell similar amounts over time
Manage their Manage their selling and selling and support expensessupport expenses
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2-2-1111
REQUIREMENTS FOR HIGH PERFORMANCE RELATIONSHIPS
GOES BEYOND THE FINANCIAL CONSIDERATIONS:
• INTEGRITY
• FAIRNESS
• LOYALTY
• FLEXIBILITY
• INPUT INTO YOUR PARTNER’S STRATEGY
• PARTNER’S INPUT INTO YOUR STRATEGY
• COMPLIANCE WITH PROCEDURES AND AGREEMENT
• HONOR COMMITMENTS
• STAND BEHIND YOUR PRODUCTS
2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
2-2-12122-2-1212Exhibit 2-4
2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
THE RELATIONSHIP DEVELOPMENT PROCESS1. Awareness
2. Exploration
3. Expansion
4. Commitment
1.
No interaction. Unilateralconsiderations of potential Partners.
2..
Interaction between the parties occurs. A gradual increase in dependence reflects probing and testing. Termination of this fragile association is simple
3.
One party has made a successful request for adjustment. Both parties are satisfied with some customization involved. Additional benefits from products, services, or terms are sought from the current partner rather than from an alternative partner.
4.
Some means of sustaining the relationship result contracts, shared ownership, social ties, inputs are significant and consistent. Partners adapt and resolve disputes internally
Relationship phase Phase characteristics
Source: Adapted from F. Robert Dwyer, Paul H. Schurr, and Sejo Ob, “Developing Buyer-Seller Relationships.: Used with permission from the Journal of marketing, published by the American Marketing Association, vol 52 (April 1987), p.21.
Expectationsdevelopment
Attraction Communication & bargaining
Power &justice
Normdevelopment
Shared values and decision-making structures
support joint investment in relation.
0 Seller’s dependence on buyer Buyer’s dependence on seller 0
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TWO CHOICES FOR STAYINGIN A BUSINESS RELATIONSHIP
1. YOU WANT TO.
• THE REWARDS ARE FINANCIAL, STRATEGIC OR PSYCHOLOGICAL
2. YOU HAVE TO.
• THE COST TO EXIT IS TOO HIGH OR THERE ARE NO ALTERNATIVES
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2-2-1414
SUGGESTIONS FOR MAKING BUSINESS- TO-BUSINESS RELATIONSHIPS LAST
• MAKE ON-SITE VISITS TO YOUR PARTNER
• TRADE PERSONNEL AND OFFICES
• MANAGE TOTAL DEPENDENCE WITH AN
ALTERNATE SUPPLIER
• MAKE THE PLEDGE OF CONTINUOUS SERVICE
• DEVELOP A RELATIONAL CONTRACT
• PROVIDE OWNERSHIP BY BRINGING FUNCTIONS OR
TECHNOLOGY WITHIN BOUNDARIES OF PARTNER’S
FIRM
2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved