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Business to Business MarketingSID# 1031489

SID : SID : 1031489

To : David Torpe and Angela Brown,

Managing Directors

Triangle Creative Limited,

Cambridge, London.

From : Micheal Pitt,

Marketing Consultant

Elite Consulting Limited

Cambridge, London.

Title : Re : Business-to-Business Marketing report

1.0 INTRODUCTION

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As requested please find herewith Business-to-Business Marketing report thataddresses your marketing concern.

In the current economy that is undergoing problems, many companies are realizingthat their most important asset is their customer base and keeping their existing

customers as well as acquiring new faces or clients. What is even more challengingat this point in time is the realization of the need to satisfy the existing clients andat the same time gain new customers in an increasingly competitive marketkeeping in mind the economic state and the problem faced by TCL. TriangleCreative Ltd (TCL) a full service advertising and marketing agency is facing thiseconomic down turn. Triangle Creative Ltd. advertising has worked well in the pastbut because of the economic climate and revenue being down by 25% TCL mustreview their marketing mix in order to combat the economic crisis. TCL is fullyaware that if they do not act quickly they will begin to lose their clients and sufferloss of market share. This has raised the eye brows of TCL and although they seethe economy recovering in the future they must think about the present and satisfytheir existing clients as well as gain total dominance over an highly competitivemarket.

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2.0 Marketing Mix

2.1 Product

A product is seen as an item that satisfies what a consumer needs or wants. This is

regarded as anything that can be offered to a market for attention, acquisition, useor consumption, which might satisfy a want or need. Kotler et al (1999).TCL is a fullagency service provider that outsources the majority of its production. They have agood working relationship with PJW Media Production that looks set to continue theirrelationship.

TCL media services experience has worked well thus far when it comes to theirclient. They have customised the product knowing which works well for the clientand this have given them the edge needed within the competitive market.

TCL advertising has worked well in the past with its clients but in the ever changing

market they need to expand their advertising market. The above the linepromotions involves TV, radio, outdoor and print advertising but the use of Internetis missing. With the internet ever growing and reaches a wide range of clients this isone of the best avenue to venture. The Wharton article emphasizes on the strategicanalyses on the future implications of advertising strategy. Future of Advertising aproject was carried out by the Wharton Schools SEI centre for Advanced Studies inManagement to find out the strategy of advertising in the coming future and criticalanalyses and further implication guidelines. The future advertising approaches andbe indexed in a sequence depending the works worked.

Partnership with the Internet Search engine:

Google Inc. a famous and more visited web search engine may facilitatethe advertising to a great extent. Future Advertising Project took huge steps inexamining this and found that this strategy may helpful as it will show the productinformation in its first pages of search and people can easily pick it up

YouTube, a popular video website of Google Inc. and the projectFast.Forwardwas taken by them where a mini clip of advert was shown just beforeimmediate the video begins. This could be of better value for future advertisingprocess for any modern company like TCL.

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TCL also engages in below the line promotion which has worked well in the pass andalso will continue to do well in the future. In saying this direct mailing is a tool thathas become outdated and can have a cost involve, but with the use of email an e-catalogue can be sent straight to the inbox of the client displaying exactly what youwant the client to view.

2.2 Price

Price is the value (usually measured in monitor terms) at which the seller agrees tosell product or service to the buyer and the value at which the buyer agrees (RayWright, 2004). The price is very important as it determines the company's profit andhence, survival. Adjusting the price has a profound impact on the marketingstrategy, and depending on the price elasticity of the product, often, it will affectthe demand and sales as well. TCL should set a price that complements the otherelements of the marketing mix, Triangle Creative Ltd has a rigid pricing system,where clients pay a percentage of the overall marketing budget. However,

Companies who focus on price and profitability management deliver higher thanaverage shareholder returns (Warren Wulfet, 1930).

Going forward Triangle Creative Ltd is to gain new market shares and clientretention it is recommended that the company should follow in a combination of thefollowing.

To obtain client TCL should lower the price and increase incentives to TriangleCreative Ltd best customer in an attempt to increase customer loyalty and higherprofit margin.

When setting a price, TCL must be aware of the client perceived value for theproduct. Three basic pricing strategies are: market skimming pricing, marketingpenetration pricing and neutral pricing. The 'reference value' (where the consumerrefers to the prices of competing products) and the 'differential value' (theconsumer's view of this product's attributes versus the attributes of other products)must be taken into account.

2.3 Place

This is seen as all the companies activities that makes the product or serviceavailable to target customers. (Kotler et al 1999) TCL is ideally located in

Cambridge surrounded potential clients. Various strategies such as intensivedistribution, selective distribution, exclusive distribution and franchising can beused by TCL to complement the other aspects of the marketing mix.

With the Accounts Executives and Designers working from home and on the road,this can be continued and will be extremely successful. Visiting the client can havea positive approach and can make the client feel like they are a VIP client to TCL,

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http://en.wikipedia.org/wiki/Price_elasticityhttp://en.wikipedia.org/wiki/Demandhttp://en.wikipedia.org/wiki/Customer_perceived_valuehttp://en.wikipedia.org/wiki/Market_skimminghttp://en.wikipedia.org/wiki/Penetration_pricinghttp://en.wikipedia.org/wiki/Distribution_(business)#Type_of_marketing_channelhttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Demandhttp://en.wikipedia.org/wiki/Customer_perceived_valuehttp://en.wikipedia.org/wiki/Market_skimminghttp://en.wikipedia.org/wiki/Penetration_pricinghttp://en.wikipedia.org/wiki/Distribution_(business)#Type_of_marketing_channelhttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Price_elasticity

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also the Accounts Executive can have a one on one approach with the client to seewhat is needed and what can be improved by TCL.

Though the use of the World Wide Web it is only for an available website whichprovides background of the company, range of services and testimonials. Such

technology should be capitalizing on since it proves to be not only a cost effectiveway to market a business but can also reach a wider scope of the target market.

2.4 Promotion

This is seen as an activities that communicate the product or service and its merits

to target customers with a view to persuade them to buy. (Kotler et al 1999) This isone of the most important parts of the 4ps and TCL may use to provide informationto different parties about the product. Promotion comprises elements such as:advertising, public relations, personal selling and sales promotion.

Advertising covers any communication that is paid for, from cinema commercials,radio and Internet advertisements through print media and billboards. Publicrelations is where the communication is not directly paid for and includes pressreleases, sponsorship deals, exhibitions, conferences, seminars or trade fairs andevents. With TCL involve with Trade Fairs and trade magazines they must also lookto include cost effective ways of advertising. Word-of-mouth is any apparently

informal communication about the product by ordinary individuals, satisfiedcustomers or people specifically engaged to create word of mouth momentum.Sales staff often plays an important role in word of mouth and public relations. Thishas worked for TCL in the past but with the current economic situation this can nolonger be relied upon. What is important to remember when it comes to promotionin an economic downturn is to not cut the promotion costs (Kksal and zguls,2007). As mention earlier the internet is one of the best ways of getting informationaround with minimal cost.

The internet is becoming more ubiquitous, more social and also more immediateand that is upsetting all sorts of business models Kevin Werbach, Professor at the

Wharton has critically analyzed the interactions and dependence among the threeof Brand, Internet and the Customer. According to him, the Fast.Forward project onthe YouTube channel was able to collect a huge number of 12,500 viewers as wellas the subscribers in a very few days.

Fig. 1

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http://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Public_relationshttp://en.wikipedia.org/wiki/Personal_sellinghttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Word_of_mouthhttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Public_relationshttp://en.wikipedia.org/wiki/Personal_sellinghttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Word_of_mouth

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(http://www.youtube.com/user/FastForward/video)

Advertising in Social networking sites:

Facebook, a well known social networking site can play the vitalrole in communicating with the client.

Twitter can also play in internet advertising process in the way of socialcommunication like Facebook too.

These are just some of the avenues and cost effective ways that TCL and ventureinto in the near future.

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http://www.youtube.com/user/FastForward/videohttp://www.youtube.com/user/FastForward/video

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3.0 Relationship Variables and Business Networks

3.1 Analysis of the Key Relevance Variables

The economic downturn impact on Triangle Creative Ltd business-to-businessrelationship is essential in order to sustain successful working relationship with theclients. These relationships provide direct benefits because they grant access toother relations, organizations, resources and competences (Hakansson &Snehota,1995; Walter Ritter, &Gemunden, 2001).

TCL is embedded in a network of ongoing business relationship. A businessenterprise looks more like a linking unit where its strategic attributes lie in how itconnects other market participant to each other. Thus, the picture of both thepossibilities and the means to manage the business enterprise becomes quitedifferent(Hakansson &Snehota, 1995). TCL business to business relationships areimportant in their survival in the current market. (Hakansson, 1987) suggest that afirms relationships are one of the most valuable resources that a companypossesses. Research suggests that firms engage in social embeddedness formore than economic benefit, but for the continuation of organizational interaction.

(Johannisson Ramirez-Pasillas and Karlsson, 2002)

3.2 The Interaction Model

The marketing and purchasing of industrial goods is seen as an interaction processbetween two parties within a certain environment. Metcalf et al. (1992) make thepoint that the interaction model seems to be the best equipped to deal with thevarious issues pertaining to buyer-seller relationships. Our way of analysing

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industrial marketing and purchasing has four basic elements which in turn are sub-divided.

These are: The interaction process The participants in the interaction process

The environment within which interaction takes place The atmosphere affecting and affected by the interaction

3.2.1 The Interaction Process

The interaction process is regarded as a comprehensive description of buying andselling which is more than a coinciding process. The model represents a new twistto the traditional business in it, Brennan Turnbull (1998). The relationships betweenbuying and selling companies in industrial markets are frequently long term. Thus, itis important in our analysis to distinguish between the individual `Episodes' in arelationship, e.g. the placing or delivering of a particular order, and the longer-termaspects of that relationship which both affects and may be affected by eachepisode.

The interaction exchange process within Triangle Creative Limited as seen as theservices out sourced to PJW Media, business-to business relationship with theirclients i.e. Theme park, Furniture retailer, University, Garden centre, Staff membersfrom the various departments, outdoor sales force, relationship with local businesscommunicate, and trade fairs.

3.2.2 The Interaction Environment

The interaction between a buying and selling firm cannot be analysed in isolation,but must be considered in a wider context. The IMP group also states that it is notonly the elements of the interaction which influence the interaction process, butalso the characteristics of the organizations and the people that represent them.

These characteristics are peculiar to the technology adopted, organizationalcharacteristics, and the individuals involved.

(a) Market structure Firstly, a relationship must be considered as one of a number of

similar relationships existing either nationally or internationally within the samemarket.

(b) DynamismThe degree of dynamism within a relationship and in the widermarket affects the relationship in two ways that are opposite to each other.

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(c) InternationalizationThe internationalization of the buying or selling market is ofinterest as it affects either firm's motivations in developing internationalrelationships.

(d) Position in the manufacturing channel A further aspect of the environment whichmust be brought into consideration is the position of an individual relationship in anextended `channel' stretching from primary producer to final consumer.

(e) The social system As well as the effects of both horizontal market and verticalchannel influences on a relationship, we must also consider the characteristics ofthe wider environment surrounding a particular relationship the social system.

This is particularly relevant in the international context where attitudes andperceptions on a generalized level can be important obstacles when trying toestablish an exchange process with a certain counterpart.

3.2.3 The Atmosphere

The relationships between buying and selling firms are dynamic in being affected bythe individual episodes which take place within them. The atmosphere of arelationship is described as a product of the relationship which is influenced by agroup of variables internal to that relationship. These variables includepower/dependence, closeness/distance of relationship, cooperation/conflict, andmutual expectation. At the same time they have the stability which derives from thelength of the relationship, its routinization and the clear expectations which becomeheld by both parties.

Fig. 2

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Organization

Technology

Structure

Strategy

Individual

Aims

Experience

Organization

Individual

Interaction Process

Product / Services

Information

Financial

Social

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Source : IMP Interaction model, Cited, (Hakansson , 1982, p.24)

3.3 Analysis of the Business Networks

When considering the business landscape the traditional view has been to see it asan environment where companies has to compete against each other to survive andwhere each company is an closed unity with only necessary interaction with othercompanies. (Hkansson, et al. 2009) offer a new framework that views the businesslandscape as an environment where the companies are interdependent and wherethe important aspect is the different ways of involvement between the companieseven though they are rivals. (Hkansson, et al. 2009) differ between business intheory and in practice, where in theory businesses are seen as independentcompanies that is only affected by competition, but in practice it is about copingwith different situations while interacting with other companies. Figure 3

summarizes the Activity Resource- Actor (ARA) model as well as briefly definesactors, activities and resources, described below.

Figure 3: The Activity-Resource-Actor model

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Business interaction between companies affects the resources and the people thatare involved in it and the activities they perform. This is the base for the ARA modelthat is the refined view of business interaction. The ARA model is a conceptual

framework that describes the outcome of an interaction process in three layersbetween the companies; the actor bonds, the resource ties and the activity links(Hkansson, et al. 2009). The ARA model is based on the knowledge of differentinteraction processes between companies, both long term processes such asproduction and transportation, as well as short term processes, where interactionswithin these processes involve more costs than benefits for one or more of theactors.

In the ARA model, the three layers are connected to each other and is the base forthe wider network. If one of them is developed or changed, it can open up for newpossibilities and changes in the two others, or in the connections between them.

(Hkansson, et al. 2009) emphasizes that the changes in actors, resources andactivities not only affects them in the certain context they are viewed, but also thedifferent interplays beyond the specific situation. It is therefore of importance tounderstand the three layers and the connection between them in order tounderstand business interaction. The section begins with the actor layer, followedby the resource layer and finalize with the activity layer.

3.3.1 Actor Layer

The actor layer is a reflection of the bonds between the different actors involved inthe business interaction. These actors consist of different companies that have

bonds between them due to the interaction between the companies. The bondsbetween companies are in fact bonds between the individuals in the companies,and it is these bonds, and the strength of these, that influence the activities and theresources used in a certain transaction. The actor bonds are important in thedevelopment of new transactions between companies as well as in identifyingpossible solutions in current transactions.

It is the actors that can tie together the resources and activities and thereforeexecute the actual interaction processes. Therefore, actors have some differentaspects to consider in comparison to resources and activities. Most importantly,actors are not insulated features; they are actors only in relation to other actors,

which mean that they are thus situated in a web of other actors by definition(Hkansson, et al. 2009).

3.3.2 Resource Layer

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The resource layer consists of the resources that the actors have available, dividedinto tangible resources, e.g. physical items such as plant or equipment, andintangible resources e.g. knowledge or information. The resource layer is theadaption of resources and how well they are tied together. These resource ties ariseas the actors mutually adapt their resources over time (Hkansson, et al. 2009).

3.3.3 Activity Layer

The activity layer is the links between the actors that connects them together. Thelinks can be activities such as production, logistics, administration, deliveries andinformation handling that is more or less integrated with each other. The activitylinks are strongly affecting the relationship between actors, and have substantiallyeconomic effects for the actors (Hkansson, et al. 2009).

The activities in business interaction processes are all related to each other, andthese relations occur no matter what the intentions of the actors are. They willaffect the different actors in the network, and therefore will need coordination inorder for the actors to fully utilize their potential. The activities can also beoccurring in one point in time, or reoccurring over a period of time, with specificeffects on the entire network. (Hkansson, et al. 2009)

4.0 Structuring the Sales Force

Sales force represents a major investment for any organization, it is seen as the linkbetween the company and the customers. The sales force plays an important rolein after sales service and can make a difference for the company. Sales force gatherinformation about competition and customer changing demands. It is thereforeimportant that companies have a well-designed and structuring sales force. A well-

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structured sales force is essential for connecting effectively with customers(Andris,Sinha and Lorimer, 1994). Given the economic downturn and current competitionwithin the market have forced TLC to rethink their sales strategy.

Fig. 4

Source: The Authors interpretation

4.1 CUSTOMER BASE

This may be regarded as structuring sales forces by type of clients the companyserves. If organizations sell to a variety of clients, it may be helpful for your salespeople to focus on the approaches that work best for a particular type of client.Allowing sales people to specialize their approaches to their client base can help

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them to be more effective. Advantage and disadvantage may be seen in the table4.1

Fig. 4.1

Advantage Efficiency in performingselling

activities

Disadvantage

Geographic duplication

Customer duplication

Need for coordinationOnline Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.html

4.2 PRODUCT BASE

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Product base may be seen as the sales force specializing in particular product linesthat are technically complex, highly unrelated, or very numerous. This is seen asthe sales force becoming and experts in one or two products or services instead ofthe entire line. This works well in highly technical fields or in sales to professionals.As a result the sales force may be divided and would require good product

knowledge and even technical expertise to be able to demonstrate products tocustomers. Advantage and disadvantage may be seen in the table 4.2

Fig. 4.2

Online Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.html

4.3 TERRITORY BASE

This is a straight forward way of organizing a sales force and is geographicallyfocused. The concept of this is sales force specializes in a certain area; the salesforce can scour it thoroughly and understand its workings. Geographically-basedsales allow sales force to know their markets and develop appropriate approachesto an area. Advantage and disadvantage may be seen in the table 4.3

Fig. 4.3

Advantage

Low Cost

No geographic duplication

No customer duplication

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Advantage

Salespeople become expertsin product attr. &

applications

Management control overselling effort

Disadvantage

High cost


Customer duplication

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Fewer management levels

Disadvantage

Limited specialization

Lack of management control over

product or customer emphasis

Online Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.html

4.4 ACCOUNT BASE

This type of sales force usually deals with one or very few major accounts whileother customers are dealt with in a more generalize way. This type of sales forceusually builds close relationship with their customer and maybe even be based partor all of the time in the customers workplace. A disadvantage associate with this isgetting to close with wit the customer since this may hamper or restrict negotiation

and potentially add to overall costs

Advantage

Salespeople develop better

understanding of unique customer

needs

Management control overselling

allocated to different markets.

Disadvantage

High cost


` Online Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.htm

Fig. 4.4

4.5 RECOMMENDATIONS FOR TCLS SALES FORCE

Given the economic down turn and availability of new technologies this method

would deem cost-effective and suitable since the cost required would be low, withno geographic duplication no customer duplication and few management level.

It is recommended that Triangle Creative Ltd divide their sales force according tothat Territorial Base since this research has proven to be the most effective as wellas cost effective traditional model in specific situation such as an advertisingagency (based on research by Eric Feigenbaum, 2008). In this scenario, the salesforce may be divided both inside and outside.

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5.0 Conclusion

The aim of this paper has been to develop the empirically derived idea thatinteraction is the core process of the business landscape. The idea of businessinteraction involves a radical departure from the view of the business landscape asa market in which transactions can be considered as discrete entities and in whichthe activities of marketing and purchasing can be understood as generalities or inisolation from each other. The idea of business interaction suggests that the processbetween each set of counterparts is unique and may involve multiple episodes overtime. This infers a structure for the business landscape composed of individuallysignificant and interconnected interaction processes of which products or servicesare simply the most immediately apparent outcomes. The idea of businessinteraction shifts analysis to the activities and resources of companies and the waysthat these are adapted through interaction. This analysis shows that businessactors, activities, resources are not simply the result of individual company strategybut are equally the outcome of specific interaction processes. An interactive view ofbusiness opens up a wealth of issues and opportunities for managers. Firstly, aninteractive view of business de-emphasises the independent status and the internalresources of a company and envisages management as a process of working within

a structure of specific interdependencies with others. These interdependencies existwithin each layer of interaction; activities, resources and actors and emphasise thatthe knowledge on which operations are based is not bound by corporate borders,but effectively exists between companies.

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6.0 References

Achrol, R. S. & Kotler, P. (1999).Marketing in the network economy. Journal ofMarketing, 63 (Special issue), 146-163

Adler, P. S. and Kwon, S-W (2002), Social capital: Prospects for a new concept,Academy of Manangement Review, Vol 27, No.1, pp. 17-40.

Ebers, M. (ed.) (1994), The Formation of Inter-organisational Networks. OxfordUniversity Press.

Hakansson, H., 1982. International Marketing and Purchasing of Goods: Aninteraction Approach.

Hkansson, H. (1982), International Marketing and Purchasing of Industrial Goods,Wiley & Sons, USA.

Hkansson, H. (2009), Comment on Actors, Resources, Activities and Commitments,Industrial Marketing Management, 38, pp.562

Hkansson, H. and Johansson, J. (1992), A Model of Industrial Networks, in IndustrialNetworks: A New View of Reality, eds. Axelsson, B. and Easton, G., Routledge,London, pp. 28-36.

Patton, M. Q. (2002), Qualitative Research & Evaluation Methods, Sage Publications,Thousand Oaks, London.

Perren, L. and Ram, M. (2004), Case study method in small business andentrepreneurial research: Mapping boundaries and perspectives, International SmallBusiness Journal, Vol. 22, No. 1, pp. 83-101.

Wright, R., 2004. Business-to-Business Marketing. Harlow: Pearson

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Bibliography

Achrol, R. S. & Kotler, P. (1999).Marketing in the network economy.

Adler, P. S. and Kwon, S-W (2002), Social capital: Prospects for a new concept,Academy of Manangement Review, Vol 27, No.1.

Ebers, M. (ed.) (1994), The Formation of Inter-organisational Networks. OxfordUniversity Press.

Hakansson, H., 1982. International Marketing and Purchasing of Goods: Aninteraction Approach.

Hkansson, H. (1982), International Marketing and Purchasing of Industrial Goods,Wiley & Sons, USA.

Hkansson, H. (2009), Comment on Actors, Resources, Activities and Commitments,Industrial Marketing Management.

Hkansson, H. and Johansson, J. (1992), A Model of Industrial Networks, in IndustrialNetworks: A New View of Reality, eds. Axelsson, B. and Easton, G., Routledge,London.

Patton, M. Q. (2002), Qualitative Research & Evaluation Methods, Sage Publications,Thousand Oaks, London.

Perren, L. and Ram, M. (2004), Case study method in small business andentrepreneurial research: Mapping boundaries and perspectives, International SmallBusiness Journal, Vol. 22, No. 1.

Wright, R., 2004. Business-to-Business Marketing. Harlow: Pearson

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