B 2 B Marketing & CRM - Buyer Seller Relationship
Transcript of B 2 B Marketing & CRM - Buyer Seller Relationship
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B 2 B Marketing & CRM-
Buyer -Seller Relationship
M.M.S- 3 rd Sem
Haresh Pursnani
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Buyer-Seller Relationship
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Buyer-Seller Relationship Learning Objectives
1. To understand the various aspects of buyer and sales
representative interaction, including the perceptions and the
roles played by them.
2. To know the major factors which influence buyer-sellerrelationship.
3. To know the methods used by industrial marketers (or
sellers) to influence industrial customers (or buyers), such as
sales presentation and negotiations.
4. To understand the special dealing, between buyers and
sellers, such as reciprocity and dealing with customers,
importance of customers service is also emphasized.
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BuyerSeller Interaction
A Conceptual Framework
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Relationship Marketing
The task of creating strong customer bond or
loyalty is called relationship marketing .
Barry and Parasuram have suggested three
approaches for developing strong customer
bond.
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Relationship Marketing
Firstapproach is to add financial benefits tothe customer relationship.
For example, giving volume discount orrewarding the customer with free spare-parts
kit.
However, these benefits can be imitated bycompetitors, and hence can not be used to
differentiate permanently.
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Relationship Marketing
The secondapproach is to give social benefits, in addition to
financial benefits.
The company sales persons learn buyers individual needs andwants and then offer individualized services.
For example, depending on individuals needs and wants, use
problem solving languages, including solving personalproblems, such as hotel booking or making travel
arrangements.
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Relationship Marketing
The thirdapproach is adding structural ties to
financial and social benefits.
For example, supplying special equipment or service,such as training customers maintenance engineers.
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Both of us win or win win style
This style is generally used for customers, suppliers,
employees, relatives and so on, where long-term
healthy relationships and mutual satisfaction areimportant.
Here, the negotiations are held for mutualsatisfaction, with emphasis on development of
genuine relationships based upon trust and
understanding, where both sides win.
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Both of us win or win win style
Building an environment of trust and confidence, much before
the final negotiation. Be polite and humble, which helps the
customer to communicate easily.
The initial focus, during the final negotiation, should be on
getting the agreement to the general statement of the
problems. In other words, initially, identify the problems
rather than solutions.
The emphasis during negotiation should be on end results
or needs, rather than on the means
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Both of us win or win win style
Both sides should then work together, pooling
their resource, ideas and sharing information
to solve the problem stated earlier.
Avoid defensive posture. Be amendable (i.e.
responsive to correction) if negotiation
climate is favorable.
If possible, avoid legalist or contractual
approach.
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You Win, I lose style
This styles is sometimes used by sales / marketing persons
with demanding and highly cost-conscious industrial
customers, who feel satisfies if they have driven the seller to
lose in the bargain.
Once a sales person knows such an approached of the
industrial customers, he creates an environment, at the final
stage of negotiation, that he has lost in the deal (although
actually he has gained) but he is accepting the terms in viewof long terms business relationship .
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Type of Relationships
A business marketer may begin a relationship with GE as a
supplier (one of many), move to a preferred supplier status
(one of a few), and ultimately enter a collaborative
relationship with GE (sole source for particular items).
Buyers and sellers craft different types of relationships in
response to market conditions and the characteristics of the
purchase situation.
Observe in Figure 4.1 that buyer- seller relationships are
positioned on a continuum, with transactional exchange and
collaborative exchange serving as the end points.
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Managing Buyer- Seller Relationships
To develop specific relationship marketing strategies for a
particulars customer, the business marketer must understand
that some customers select a collaborative relationship,
whereas others prefer a more distant or transactional
relationship.
the typical characteristics of relationship at the end points of
the buyerseller relationship spectrum :
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Type of Relationships
Central to every relationship is an exchange processwhere each side gives something in return for a
payoff of greater value.
Transactional exchange centers on the timely
exchange of basic products for highly competitive
market prices.
Moving across the continuum relationships become
closer or more collaborative (close) versus
transactional (distant ) exchange
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Value- Adding Exchanges:
Between the two extremes on the relationship continuum are
value- adding exchanges, where the focus of the selling firmsshifts from attracting customers to keeping customers.
The marketer pursues this objective by developing a
comprehensive understanding of a customers needs andchanging requirements, tailoring the firms offerings to those
needs, and providing continuing incentives for customers to
concentrate most of their purchases with them.
To illustrate, Dell Computer provides a customized Web page
for each of its premier corporate customers that individual
employees in the customer organization can access for an
array of information and technical support services.
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Strategy Guidelines
The business marketer manages a portfolio of relationshipswith customers- some of these customers view the purchase
as important and desire a close, tightly connected buyer-
seller relationship; other customers assign a lower level of
importance to the purchase and prefer a looser relationship .
Given the differing needs and orientations of customers, the
business marketers first step is to determine which type of
relationship matches the purchasing situation and supply-
market conditions for a particulars customer.
Second, a strategy must be designed that is appropriate for
each relationship type.
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Managing High- and low cost
to serve customers
What causes some customers to be more expensive than
others ?
Activity based costing provides a solid foundation for
measuring and managing the profitability of individual
customers
high cost to serve customers for example, desire
customized products, frequently change orders, and require a
significant amount of presales and post sales support.
By contrast, low- cost to serve customers purchase standard
products, place orders and schedule deliveries on a
predictable cycle, and require little or no pre sales or post
sales support
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IDENTIFYING PROFITABLE
CUSTOMERS
Cost to Serve & Margins
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Customer relationship
management: the process Customer relationship management (CRM) is a cross-
functional process for achieving.
a continuing dialogue with customers
across all their contact and access points, with
personalized treatment of the most valuable customers,
to ensure customer retention and the effectiveness of
marketing initiatives.
CRM is the bundling of customer strategy and processes,
supported by relevant software for the purpose ofimproving
customer loyalty and, eventually, corporate profitability.
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Acquiring the Right Customers:
Customer relationship management directs attention to twocritical assets of the business to business firm:
its stock ofcurrent and potential customer relationships and
its collective knowledge of how to select, initiate, develop,and maintain profitable relationships with these customers.
Customers portfolio management, then, is the process of
creating value across a firms customer relationships- fromtransactional to collaborative- with an emphasis on balancing
the customers desired level of relationship against the
profitability of doing so.
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Instituting the best Processes:
The sales force assumes a central relationship-management
role in the business market.
Technical service and customer service personnel also assume
implementation roles that are important and visible in buying
organizations.
Successful relationship strategies are shaped by an effective
organization and deployment of the personal selling effort
and close coordinator with supporting units, such as logistics
and technical service.
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Best Practices at IBM:
In serving a particular customer, a number of IBM employeescome into contact with the customer organization. To ensure
consistent strategy execution.
IBM identifies customer- contact roles for each of its
accounts, specifies desired measurable actions for each role,
and monitors the customers degree of satisfaction with each
role .
The IBM client representative assigned to the customer is the
relationship owner, but the account team may include other
specialists who complete a project for the customer (Project
owner) or solve a particular customer problem (problem
resolution owner).
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customer- relating capability
To excel at customer relationship management, a
firm requires a customer- relating capability.
This capability, best nurtured in a market-drivenorganization, includes a strong relationship
orientation among employees, a rich and widely
used information base, and systems, processes, and
incentives that enable personalized solutions for
customers.
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THANK YOU