Business to-business-marketing

Business to Business Marketing

Copyright © 2008 - 2012 managementstudyguide.com. All rights reserved.

Contents

Business-to-Business basics

Making sense of customers and markets

Business-to-Business marketing - International

Business-to-Business marketing specifics

Business-to-Business marketing models

Strategies Business-to-Business management

Marketing evaluation and control

Implementing a value-creating organization


Introduction

Originally, business to business marketing started as a special case of marketing, heavily

borrowing concepts and techniques from consumer marketing. Business to business

marketing has evolved into a mature marketing discipline, with a distinct identity, separate

from consumer marketing. The importance of business to business marketing is often

underestimated. Successful application of business to business marketing concepts and

methods requires insight into the characteristics of business to business market and how

they shape business to business marketing approaches.


Nature of Business to Business marketing

Business to business marketing is the marketing of

products or services to companies, government

bodies, institutions and other organizations that use

them to produce their own products or services or

sell them to other business to business customers.

This definition of business to business marketing

emphasizes the nature of business customers and

the purpose for which B2B products are bought. B2B

customers are organizations instead of consumers

varying from small family operated local companies

to large multinational conglomerates with several

business units and gigantic purchasing budgets.


B2B marketing for consumer marketers

Knowledge about B2B marketing is also

relevant to manufacturers of

consumer products, such as Unilever, P&G.

Although these manufacturers use consumer marketing to sell their consumer brands through various retail chains, these retail chains are large organizations whose

buying behavior is often quite similar to that of B2B customers.

They employ professional purchasers, negotiate about

delivery and payment conditions and sign long-

term blanket contract with suppliers.

There is a second reason why B2B

marketing is useful for manufacturers

of consumer products.

These manufacturers buy large quantities of

materials and components to manufacturer their

common products that are marketed by their suppliers

using B2B marketing.


Business to Business customers

Business to Business customers can be classified into 3 groups – Commercial enterprises, Government agencies and institutions. Each of these 3 groups of Business to business customer has its own characteristics and should be approached differently by vendors.

A 3rd group of B2B customers encompasses the numerous institutions purchasing B2B products to perform their function.

A significant number of B2B products and services are bought by government agencies. It covers both local and central government levels. In addition, state-owned companies, such as utilities and national railway companies, frequently display similar purchasing behavior

There are 3 types – users, original equipment manufacturers and resellers

Commercial enterprises


Business to Business products

The diversity of B2B

markets is also reflected

in the broad range of B2B

products, varying from

office supplies, lubricants

and electronic tools etc.

Raw and processed

materials: Raw materials

are farm and natural

products that are used by

customers with little or no

alterations, such as corn,

wheat, milk, iron, natural

gas and compressed air.

Processed materials are

raw materials that have

undergone some sort of

conversion.


Characteristics of Business to Business markets

In B2B marketing, one or more of the following characteristics may be important.

The demand for B2B products depends on the demand for other downstream product.

There are few, geographically concentrated, customers

The demand for B2B products is related to the demand for other B2B products

Organizational buying behaviour is complex


Market characteristics drive marketing strategy

Together, these characteristics of B2B markets determine the vendor’s marketing approach.

When there are only a few B2B customers, each of them representing a significant transaction volume, vendors develop close personal relationships with key members.

In these close relationships, a vendor’s offering is frequently customized, while key customers are involved in the vendor’s product development.


Selling to consumers and Business to Business customers

Many companies sell more or less the same product to consumers and B2B customers. Car manufacturers sell cars to consumers and fleet owners. Food manufacturers sell products to consumers, hospitals, schools and companies. Vendors that want to sell their products to both consumers and B2B customers must make two kinds of marketing decisions.

• How will we target both markets?− Can we sell the same product in

both markets or should we offer two versions of the same product?

− Which sales channels are most appropriate for both markets?

• How will we organize marketing function internally?− Should we create 2 separate

marketing departments?− Which market gets priority in

case of product shortages?− Do we need different people

for each marketing group?


Creating value for customers

B2B customers do not need

products, but they do need the

value offered by these products

to produce their own products

and services. Value is defined as

the benefits minus costs that

customers receive in exchange

for the purchase price. Every

customers will assess whether

the net benefits offered by the

vendor outweigh the purchase

price that has to be paid to enjoy

them. Thus, successful B2B

marketing depends on a

vendor’s detailed understanding

of what customers value.


Contents










Understanding Business to Business customers

Successful business marketers understand the needs of their customers and are able to translate these needs into superior value. There are 3 types of customer needs.

Basic needs are the basic requirements that each vendor needs to meet to be in business.

Satisfier needs are needs that a customer would like to see fulfilled but which do not impact customer buying behaviour

Attract needs are needs that, if performed best in the industry, deliver such superior value to customers that they are willing to switch vendors.


The customer activity cycle

Customer

decision

making

Disposal Problem recognition

Orientation and evaluation

Purchase

Delivery and installation

Use

Maintenance and repair

Expansion and upgrading

Customer keeps it going

Customer decides what to do

Customer does it


The organizational buying process

Stage 1 – Product specification and requests for proposals

Activities of vendors Stages of buying process Activities of buying organization

Make customer aware of problems, focus on customer situation.

Involve various functions, analyze consequences for various business units.

Need recognition

Offer specialized knowledge, influence specifications, assist at value analysis.

Translate functional user requirements into technical specification, plan manufacturing.

Formulating specifications

Develop relationship, build trust, influence selection process.

Combine internal and external information.Identifying potential

vendors

Influence RFP, match proposal with specifications, suggests improvements.

Determine number of proposals, provide clear information.Requests for

proposal

Stay in touch, offer suggestions, provide additional information, modify proposal.

Trade-off between criteria and objectives, request additional information.

Evaluation of proposal


The organizational buying process

Stage 2 – Negotiations and selections

Activities of vendors Stages of buying process Activities of buying organization

Be flexible, build trust, develop relationship.

Dialogue about various topics, combine short and long term.Negotiation with

vendors

Stay in touch, be flexible, demonstrate commitment.

Trade-off between criteria and objectives, decide on single/dual/ multiple sourcing.

Selection of vendor(s)

Clear and unambiguous agreements, possibly exclusiveness.

Formulate negotiated terms in legal contract.Drawing up the

contract

Stage 3 – Order fulfillment and evaluation

Keep promises, inform purchasing about progress, solve problems immediately, manage daily contracts.

Monitoring by purchasing, communication with other department.Order fulfillment

and evaluation

Solve problems, handle complaints, suggest product improvements.

Continuous evaluation of product and performance, formulate supplier development programme.

Evaluation and feedback


Market sensing

But many B2B firms are too focused on their internal processes or they feel that they already know all about their markets and the best way to serve them.

Effective market sensing requires open-minded inquiry, widespread information distribution and mutually informed mental models that guide interpretation.

The process of collecting market information and making sense of all this information is called “market sensing”.


Collecting information about customers

Aggregated information about all customers in the market

Whole market

Market segment

Customers are grouped into more or less homogeneous segments and the information concerns all customers in the segment

Organiza-tion

Detailed information about individual customers, share of customers, age of production equipment, location, industry

Buying center

Number of individuals, power, structure, roles, external influencers, buying motives, communication needs

IndividualDetailed information about individuals. Risk aversion, personality buying motives, relative power and influence


Public sources

Much information about B2B customers can be gleaned from public sources, such as

• International government organization

• Market research agencies

• Industry associations

• Trade journals and business periodicals

• National and international newspapers

• Online directories

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Market research

B2B market research has several characteristics that distinguish it from customer market research.

Most B2B market research is exploratory and uses secondary data and subjective estimates

B2B market research uses relatively small samples

B2B market research uses interviews and surveys, rather than observation and experiments

B2B market research is plagued by a number of practical problems

Most B2B market research is global


Business to Business market segmentation variables

The potential segmentation variables can be grouped into 3 categories

Characteristics of the buying organization – type of organization, number of employees, sales volume, industry, geographic location, product application, degree of source loyalty.

Characteristics of the buying centre – Buying roles, number of decision-makers, degree of formalization, degree of centralization, stage in buying process, decision-making style.

Characteristics of individual decision-makers – Age, education, organizational position, role and influence in buying centre, degree of self-confidence, buying criteria.


The nested approach

Bonoma and Shapiro proposed this model. Their nested approach consists of 5 categories of increasingly detailed information about an organization’s buying behavior.

Demographics (industry, size, location)

Process characteristics describing the organization’s operations (technology employed, whether or not the organization uses the vendor’s product, financial stability)

Purchasing approach (organization of the buying centre, power structure, purchasing policies, relation with competitors)

Situational factors – urgency, order size, product application

Personal characteristics – motivation, risk perception, relationship with vendor


Contents










Global outsourcing and manufacturing

Low Labour cost

Low Infrastructure cost

Availability of technology

Availability of raw materials

Proximity to the markets

Companies have been outsourcing their raw materials and components for a long time now, since the second quarter of the twentieth century due to the following reasons:

Certain countries of the East and South, which that are either under developed or are developing have low cost labour that helps in low cost manufacturing. This becomes big incentive for the western business gaints to get the labour intensive work down in such locations


Shoe manufacturing companies – an example

Adidas and Nike of USA

found that as their own

labour cost was high as

compared to some eastern

nations, they started

outsourcing the manufacture

of shoes to these countries.

As a rough comparison the

costs of rich and poor

countries manufacturing is

shown here:

Labor cost per shoe pair

Infrastructure per shoe

Transport per shoe

52 1

50

20

5

In USD

Poor countries

Rich countries


Business organization matrix

Private ownership Mixed/joint ownershipPublic or government ownership

Market controlMarket driven private ownership

Market driven joint ownership

Market driven government ownership

MixedMixed control/Private ownership

Mixed control/joint ownership

Mixed control/government ownership

Government control

Government control/Private ownership

Government control/joint ownership

Government control/government ownership


Mixed economies

For e.g., In India, the mixed economy was created with the joint sector ventures, were the private and

government were both partners. While such firms tried to get the best of both i.e. easy government

approvals and speedier decision-making process associated with the private sector

Production and productivity

The competiveness of the countries in the international market depends on the following factors

Demand and its management

Production factors are based on:

• Capital resource

• Human resource

• Information resource

• Infrastructure

• Physical resource

• Management


Countries classifications

GDP – Gross

Domestic Product

GNP – Gross

National Product

Per Capita Income

Purc

hasin

g Po

wer

Quality of Life or Life style

Countries are classified on the following basis


Macroeconomic factors – The GDP

Developing countries - India Developed countries – U.K.

30%

Agriculture

30%

Industry

25%

Manu-facturing

15%

Service

2%

Agriculture

32%

Industry

22%

Manu-facturing

66%

Service


Distributor

Distribution patterns – Industrial goods

Manufacturer Customer

Technicalities have to be explained to the customer, which are best done by the manufacturer

Mostly large sums of money are involved and customer wants best price without middleman’s commission

Installation and commissioning of the equipment is involved but done by the manufacturer’s engineers

After sales, service is complicated


Distribution patterns – consumer goods

Manufacturer Customer

Sole Distributor

Manufacturer

Sole distributor’s own channel

Area distributor

ManufacturerDealer/ Retailer

Very small firms who have limited market, like bakeries may resort to direct selling to their customers. Very large firms have sole distributors with their own network of dealers and retailers


Other distribution methods include the following

Own shops

Franchise outlets

Mail order

Catalogue sales

Web marketing

Agency operation

Stockists

Consignment agents


International markets of the 21st century

When a firm enters the market, it has some commitments to its customers, and those are

based on the utility, need and performance of its product. The nature of commitment of

firms has to widen just not to cope with international competition but also in order to beat

them in their own countries as well

In-depth or intensive marketing within the country

Extension of geographic boundaries of the markets

Penetrating pricing strategy

Strong merchanidizing effort

Advertising, promotion or strategy

New product plans

New products to be sold in new markets

Vertical integration of manufacturing base


Strategies for markets

Market analysis

Formulating strategies

Implementing strategies

Feedback


Implementation of strategies

Steps to be taken by the firm

• Team members to remain totally motivated, committed to their tasks

• Team should be fully in the know of their qualitative and quantitative targets

• Qualitative targets like improvement in brand image, training of team members should be taken as seriously as quantitative targets

• Individual members of the team perform their roles as also assist other members whenever necessary

• Team members should act as more as a coordinator than a monitor. His actions should inspire the team

• Assessment of achievement must be made first by each member and then for the team jointly by the team at regular intervals without waiting for the year to end

• Success story of any member must be circulated within the team to inspire others and also to learn from the methods used to achieve the success. Failures also should be discussed, not to push the people down but to learn from any mistakes the losing team may have made


New challenges in the 21st century for markets

Quality standards at

par internationally

ISO9000 series

Low labor costs

A large technical

work force

English as a known

language

IT, software expertise

Presence of several multi-

national companies already in

the country

Spread of internet in

the country

Emergence of

e-signatures leading to

e-commerce


Marketing plan

Marketing research to identify the market

Define market segment/s

Planning marketing program

FeedbackControlling the program

Program implementation


The market plan should contain

Market Plan

Executive Summary giving the highlights of the plans, especially the control points

General and competitive environment factors, new products from competition, market growth forecasts and summary of the findings of market research

Comparative statement of strengths and weaknesses of the firm vis-à-vis competitors, with emphasis on the customer benefits derived from the usage of products from the firms, both its own and competitors

Profitable sales plan for the entire product available for sale, either by manufacture or by purchase, taking the 4Ps and people into account

Fixing individual quantitative and qualitative targets, qualitative targets could be in the nature of continuous training programs, market feedbacks

Profit picture derived out of sales revenue and marketing expense budgets


Management game

The best way to look at the imperative of improving performance is

through the Mackenzie’s 7s model

Shared vision

Structure

System

StyleSkills

Staff

Strategy


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The customer needs

Business to Business marketing has several variants as well as approaches to combat competition

Existing product-competitive product/ S-comparative assessment

1

Best fit as per customer requirement

2

Assessment of modification needs, if any

3

Redesign the product – test it with customers’ requirements

4

Give samples for trials with the customers

5

Get customer’s feedback and act on it

6

Get a long-range business perspective for the product

7


Business to Business market advantage

Customer satisfactionCustomer relationship management

Providing options to customers

Add value to the product

Promote supplies or Just-in-Time supplies if required


Overselling

In the Business-to-Business marketing sales persons tend to

oversell the company. The promise options, product specifications

and terms of business that cannot be sustained by the company

Sales person tells the customer, “We can offer diesel model of the car in the next two weeks”, when the company has no plan to make the diesel model

Customer gets the option of mobile phone with camera and blue tooth when the company can give only with camera

Customer is told he need not pay a down payment for the product and give only in instalments, when the company rules do not permit such credit at all

A customer buying an air conditioning plant is given commissioning date of the plant when the company knows fully well that it would not be possible to adhere to the date

It is always prudent to

offer less and deliver

more; this way the

customer would feel

delighted and look

forward to doing further

business with the

company


Different approach to B-to-B marketing

Consumer marketing and industrial marketing differ in several ways. Industrial buyer looks for benefits that accrue from product usage where as consumer buyers want ‘good value for money’ Industrial buyers sees the following benefits

Low overall purchase cost

Ease of storage

Easy inventory management

Ease of product usage

Training the seller in product usage

Longer shelf life of the product

J-I-T supplies by the supplier


B-to-B advertising is important mainly for creating

awareness about the company, improving its

corporate brand image and for providing products

technical specifications. Companies can opt for

technical journals pertining to the buyers business as

media, besides, at times newspapers, and TV can

also be used

B-to-B advertising


Business-to-Business pricing

Pricing strategy is the foremost importance because in the

competitive business buyers prefer the low cost supplier,

everything else being common. The hidden costs could be as

given below

Cost of certain spare parts essential to the product

Cost of accessories required

Cost of transportation

Cost of installation and commissioning of the equipment of the product

Cost of user manuals and other documents

Cost of training of the buyer personnel into proper usage of product


Pricing formula

Companies must workout pricing formulas individually for each bid they make because each

case is different

Customer’s location and its distance from the sellers place to workout the actual transport costs to the customer

Cost of mobilization of resources, including manpower at the customer’s site

Cost of pipelines, ducting, power needs, water supply required and local labor force costs

Cost of taxes to be paid in the customer’s location (for example, CST of the customer’s premises are in different state than the seller’s location)


The purchase committee

Managing DirectorWho chairs the committee

Purchase ManagerWho is the convener of the committee

Production Manager

Who looks at the product from the point of its match with the rest of the existing equipment and its case iofuse

R&D Manager

Who decides if the product is latest ‘state of the art’ product or not

Finance Manager

Who scrutinizes the financial implications of the bids

Technical ManagerLooks at the technical aspects of the bids


Market demand

Demand of B-to-B business are generated in the most unpredictable manner and hence

demand analysis by the sellers is a difficult task. It is therefore important to find out where

the market exists. One should seek answers to the below questions

Who wants the product?

When does he want it?

Where does he want it?

What price he is willing to pay for it?

What is the purpose for which he is buying the product?

What does the product do for him in his life?

What are the factors influencing the purchase?

Who is the competitor?

What are his plans?


For each firm, there are following categories of customers

The buyers The non-

buyers who

buy

competitive

products

The non-

buyers who do

not buy the

product at all

The non-buyers

who buy the

product only

rarely

The vacillators

who keep

shifting

purchase

between the

firm and

competition


Knowing about various elements of business

Own products, their plus and minus points

Competitor’s products, their plus amd minus points

Niche markets, and its business potential

Relevant customer group, the buyers, users and the

purchase decision makers

Market dynamics


Marketing goals achievement channels

Customers mindsets/socio -

economic considerations

Pricing

3

Advertising

2

Personal selling

1

Distribution channels

4

Promotion

5

Restraining Force 1

• Example text• Fill in your own

• Example text

Competition

6

Res• Example text

• Fill in your own• Example textPackaging

7

Marketing situation


How the advertising works?

Advertising works on many levels

• On eyes and ears for receiving the message

• On the mindset for understanding the message

• On the heart where feelings create the goodwill and proper response


How the advertising works?

For the eyes and ears

• Did the advertisement reach?

• Did it catch the customer attention?

• Did it bring in the top of the mind recall?

• Was it seen or heard or both?

For the mindset

• Was the advertisement understood in a

way it was meant to be understood?

• Did the customer get the message?

• Were the message and brand read

together?

• Was the message not clear

For the heart

• Was the product accepted by

customer?

• Did it change the customer attitude

about brand in its favor?

• Did the feelings change after

seeing the advertisement?

• Did the brand perception change?

• Did it change the perception of

competing brands against them?

• Did the purchase action take

place?


Advertising plus and minus points

Economic growth, helps develop competition

Expenditure can be avoided, creates competition on items other than price like brand equity

New product market development, competition keeps firms on their toes

Creates entry barriers, for competition can equate business possibilities

Helps in marketing effort, increases market chances

Can raise costs and prices

Provides information to the customers, ensures quality of the product, increases demand

Wrong information to customers, Puffery


Contents










The expert marketing model

The Expert Marketing Model’s four necessary

points areTo be seenTo

be found

To be quoted To be heard

The expert marketing

model

Any service business can use this expert model. Service businesses need to showcase their ideas and vision and the best way to do this is to create awareness which is what this model strives to achieve

http://www.startupchamp.com/wp-content/uploads/2012/08/b2b-marketing.jpg


You need to be found

To be seenTo b

e fo

und

To be quoted

To b

e hea

rd

The expert

marketing model

To be found

• There are probably hundreds, even thousands of businesses providing the same service as you so it is vital that your business can be found among the flurry of competitors

• What makes businesses step out from the rest is reputation

• If you can be seen as an expert for the provision of the service you are in, potential customers will be far more inclined to contact you

• A good way of sharing your expertise with the world is to write. Create a blog and fill it with interesting and useful content that your target audience will want to know


You need to be seen as an expert

To be seenTo b

e fo

und

To be quoted

To b

e hea

rd

The expert

marketing model

As an expert

• You also need to publish free guides, paid for guides and white papers; items that your prospects can download (in exchange for their email address) that show the depth of your expertise in your subject matter in addition to the articles you have posted in your web site

• You want your clients to be convinced that you really do know what you are talking about so that you become the only person they ask to help them


You need to be heard

To be seenTo b

e fo

und

To be quoted

To b

e hea

rd

The expert

marketing model

Need to be heard

• Local seminars and conferences will promote your services in your local area

• However webinars or teleseminars will get your vision and ideas heard on a much wider scale

• Speaking out about your vision and presenting your knowledge is a very powerful medium as it allows for another level of connection with your prospects

• Good presentations are those which are told with passion and enthusiasm

• Use your most resourceful equipment – your knowledge. This is what will really capture your prospects.


You need to be quoted

To be seenTo b

e fo

und

To be quoted

To b

e hea

rd

The expert

marketing modelNeed to be quoted

• An expert needs to be quoted

• Do not expect immediate results, marketing strategies often take months to really take off

• Be consistent and the results will follow


Business to business models – Electronic exchanges example

These hubs are sites on the Internet where buyers and sellers can come together to

exchange information and buy and sell products and services.


Examples of business models

Business model by which a

company integrates both

offline (bricks) and online

(clicks) presences. One

example of the bricks-and-

clicks model is when a chain

of stores allows the user to

order products online, but lets

them pick up their order at a

local store

Business organization or

association typically composed

of relatively large numbers of

businesses, tradespersons or

professionals in the same or

related fields of endeavor,

which pools resources, shares

information or provides other

benefits for their members

The removal of intermediaries in a

supply chain: "cutting out the

middleman". Instead of going

through traditional distribution

channels, which had some type of

intermediate (such as a distributor,

wholesaler, broker, or agent),

companies may now deal with

every customer directly, for

example via the Internet

Bricks and clicks business model

Collective business models

Cutting out the middle man model


Examples of business models

Direct selling is marketing and

selling products to consumers

directly, away from a fixed retail

location. Sales are typically made

through party plan, one-to-one

demonstrations, and other

personal contact arrangements.

Business model which works

by charging the first client a fee

for a service, while offering that

service free of charge to

subsequent clients

Franchising is the practice of using

another firm's successful business

model. For the franchisor, the

franchise is an alternative to

building 'chain stores' to distribute

goods and avoid investment and

liability over a chain

Direct sales model Fee in, free out Franchise


Contents










Competitive analysis

Tics

Size of the market

Level of customer satisfaction

Sales performance

Capacity/its utilizatiion

Market analysis Firm’s analysisCompetitive analysis

Competitive analysis

Growth prospects Brand loyalty Market share Product-wise market share

Profitability Product quality Brand equity status

Segment-wise sales

Cost structure Service quality Objectives/goals Channels/sales force

Channels Brand association Marketing strategies

Advertising/ promotion

Trends Relative costs Organizational costs

Reaction time

Key success factors

New product activities

Cost structure Experience curve/exit barriers

Manager’s capabilities and performance

Strengths and Weaknesses

Value chain


Strategic marketing planning process

Understanding the formal process needed for planning marketing strategies in today’s competitive age. Plans made should be (a) short-term (b) long-term

The following steps are needed for making the plans

• Analysis of external environment

• Study of the firms internal strengths and weaknesses

• Idea generation for planning

• Brainstorming for prioritizing the ideas generated

• Customer behaviour analysis

• Competitor analysis

• Market analysis

• Draft annual and short-term plan

• Final plans with forecasting of sales and cashflow


Strategies to know - Customer’s analysis

We have discussed earlier why, how, where, when and how

much the customers buy, which can be ascertained with a

degree of accuracy through market research.

Let us take a

simple Customer

Behavior Pattern.

It includes the

following elements

of internal

information

processing, guided

by external

information and

stimuli

PerceptionBelief

Preference Attitu

de

Customer Behaviour


Strategies to know - Customer behavior

PerceptionBelief

Preference Attitu

de

Customer Behaviour

It comes from a

customer’s product

recognition as a

desirable product

based on his intuition

and information

gathered on sensory

plane

It is the customer’s

way of thinking about

the product, his firm

opinion about it

Out of his belief,

perception and

attitude the customer

makes his

performance of one

product over other

products, and tries to

buy it

It is the customer’s

conviction and firm

opinion of a

product/brand


Strategic objectives

Tics

Product Add promotion plans Increase share by 2% p.a.

Marketing mix factors

Strategies for marketing

Marketing objectives

Price Increase advertising efforts

Increase brand recall by 10% p.a.

Placement Appoint dealers in uncovered areas

Increase geographic coverage by 20% p.a.

Promotion Build dealer relations, higher margins, better care, quick response to complaints

Improve dealer relationships

People Training of marketing personnel


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Formulating and implementing marketing strategy

STRATEGY

Successful B2B marketing starts with formulation of an effective marketing strategy. Marketing

strategy formulation and implementation are not independent from each other. Management may

select a strategy that is easy to implement because a required corporate ROI causes them to focus

on short term results. And a strategy is doomed to fail if management neglects the strategy’s

consequences for employees. Strategy implementation is a complex process that encompasses

much more than simply communicating the new strategy to the organization’s employees and

other stakeholder.


Marketing control

Corporate strategyMarketing strategyMarketing objectives

Performance standards

Implementation of marketing activities

Comparison of results with performance standards

Corrective actions

Marketing plan


Analysis of customer relationships

At the individual customer level, management can assess the quality of relationship using metrics such as

Share of customer: Ratio between revenues from customer X and total purchases by customer X in this product category.

Relationship size: Ratio between revenues from customer X and the average revenues per customer in the market segment that customer X belongs to.

Share of order: Ratio between the number of orders from customer X and the total number of order.

Share of revenues: Ratio between the revenues from customer X and total revenues.

Share of contribution: Ratio between contributes generated by customer X and the firm’s total contribution to profits.


Control of the marketing function

A key task of marketing is to develop and improve the marketing function. A marketing audit provides a detailed examination of firm’s marketing function. A good marketing audit will allow for control of the marketing function and has 4 characteristics.

Periodic

A marketing audit is frequently initiated in time of crisis, but it is advisable to periodically conduct a marketing audit that allows the firm to track perfor-mance over time and measure the effects of implemented improvements.

Indepen-dent

It is better to hire an outside firm with broad experience is several industries, some familiarity with the industry, time and attention to conduct high-quality audit.

Systematic

A marketing audit looks at the firm’s marketing environ-ment, marketing objectives, marke-ting strategies, marketing systems and marketing activities.

A marketing audit covers all major marke-ting activities and the relationships between them.

Compre-hensive


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Designing a value-creating organization

Customer wants/needs

Process capabilities• Order fulfillment • Product

development • Logistics

Supporting infrastructure• Organization structure • Business practice • Measures/rewards/culture• Technology

Interaction moments

Best of breed/world-class: service standards performance capabilities

Best of breed/world-class: infrastructure design points


Role of marketing in a value-creating organization

B2B marketing is all about creating superior value for customers, which helps them to be more successful.

B2B marketing concerns a large number of strategic decisions that impact firm performance.

This begs the central question: what exactly is the role of marke-ting in a value-creating organization?

The central role of marketing is to keep all business units, departments and outside partners focused on customers and their changing definition of value in the market place.


Coordination between marketing and other business functions

A defining characteristics of a value-

creating organization is the presence of

effective interface between

organizational units. Business functions

and department operate as isolated

silos and focus on their own objectives

that only rarely involve the customer.

An “us vs. them” attitude prevails,

resulting in a lack of communication

and misunderstanding. Many B2B firms

experienced toughest parts of

implementing a value-creating

organization is to align all functional

areas towards the same objective:

creating superior value for

customers.


Business-to-Business marketing summary

In this topic you learnt that:

The process by which businesses employ a multi-layered strategy consisting of web communications, email, media campaigns, and relationship management for the purpose of converting targeted business prospects into customers

B-to-B marketing is a transaction between two businesses, whether it is a manufacturer to wholesaler or wholesaler to retailer

B2B stands for Business to Business. When you are working on selling to another business rather than an end user or consumer, you are engaged in B2B marketing

Business to-business-marketing

Documents

Transcript of Business to-business-marketing