B2B Marketing Perspectives

Anand G Khanna

 Business to Business MarketingCourse Outline and Session Plan  October  2010 to January 2011

 Sl. No  Session Topics

1 1 Introduction to B2B Marketing Ch. 1 #

2 2&3 Understanding Business customers Buying Process and BehaviorCh 2&3

3 4 Segmentation of Business MarketsCh 4&6

4 5 New Product Development & ManagementCh 9&10

5 6 Case Study

6 7&8 Competitive Intelligence (own presentation )

7 9 Pricing Perspectives in B2B ProductsCh 15

8 10 Distribution channels for Industrial ProductsCh 12

 Business to Business MarketingCourse Outline and Session Plan  October  2010 to January 2011

 

Sl. No  Session Topics

9 11 IMC for B2B Marketing Ch 15&16

10 12&13 Personal Selling of Industrial Products (own presentation )

11 14&15 CRM in B2B Ch 4

12 16&17 Key Account Management (Guest lecture )

13 18 Case Study

14 19 Project Presentations

15 20 Project Presentations

Definition

• B2B  Marketing  is  also  often      referred  to  as     Industrial  Marketing&  few  as  Secondary Marketing

• Involves  marketing  of  goods  and  services  to other Business    enterprises,  governmental    and other  institutional  needs  for  secondary processing 

• Marketing  of  goods  and  services  to  be  sold  to the  end  consumer  through  the  use  of  a Intermediaries –Processing or Reselling 

DEFINITION

• Definition (CMA)“  Markets for Products & Services to be used for meeting the demands of ultimate consumer by Businesses, Government, Institutions & Resellers” 

   

MAJOR TRENDS IN MARKETING-2010

•Recession still continues in the Global Market Place

•Oversupply in manufactured goods -

•Developing shortages in commodities –Steel ,Oil , Cement

•Price and margin compression

•Rising customer expectations

•Financial resources getting tighter – interest rates High etc

MAJOR TRENDS IN MARKETING-2010

•Technology acceleration and shorter product life cycles

•Rapid innovation and product launch ,imitation –me to

•Rapid loss of competitive advantage

•Consolidation and convergence in distribution channels

MARKETING TRANSITIONS

These market trends have necessitated new waysof thinking:

From:  To:Transactions RelationshipsLowest purchase price Highest delivered valueOccasional Monolog Ongoing dialogEconomies of scale Economies of scopeCustomer acquisition Customer retention

What benefits might co-operations contribute to marketers inlight of these challenges?

Challenges Facing B2B Marketers

1. Understanding deep customer needs in new ways2. Identifying new opportunities for growth3. Improving Value Management 4. Competing and growing in Domestic and Global

Markets5. Countering the threat of product and service

commoditization – Innovations6. Convincing C-Level executives to embrace the

Marketing Concept and support Marketing programs

Challenges of Business Marketing

• Business Market composition –Environment -Stakeholders

• Customers- OEM , Corporate, Distribution Channels ,Resellers

• Market Processes –T&C of Business• Business Relationships• Business Networks

Challenges of Business Marketing

Exchanges

Information

Technological (Superseding innovations)

Financial (Credit)

Social (Trust)

(Maintaining relationships over long

period)

(Tiding over short-term difficulties)

Challenges of Business Marketing

Marketing Strategies have to be well defined

Value Analysis

Market Life Cycle

Technology Audit

New Product Development

Segmentation

Role of Internet

What is not different?

CONSUMERS

People are different and they are different at

different times

4Ps

Price?

Promotion?

Place?

Product?

Challenges of Business Marketing

Why is Business Marketing different?

Difference in customers and all the P’s

Each has its own idiosyncrasies

The C’s of MarketingC Customer –Needs , Solutions , Care

C Convenience

C Company (Sales ) Policies

C Cost

C Conformance –Specifications &Quality

C Compliance –Delivery, Implementation

C Cash Flows –Working Capital –Profit etc

C Competitor Knowledge

Industrial Vs Consumer Marketing

CRITERIA Industrial Markets

Consumer Markets

Market Structure

Geographically Concentrated Dispersed

Relatively Few Customers Mass Customers

Competition Oligopolistic Monopolistic

Products

TechnicallyMore Complex/ Customized

Less Complex/ Standardized

Service/Delivery/ Availability Very Important

Somewhat Important

Industrial Vs Consumer Marketing

CRITERIA Industrial Markets

Consumer Markets

Buyer Behavior

Involvement Functional Family

Predominant Task Motives Rational/ Technical

Psychological/ social, less technical

Relationships Interpersonal Non-personal

Reciprocity Expected Not expected

Decision makingDistinct, stages observable

Unobservable mental stages

Industrial Vs Consumer Marketing

CRITERIA Industrial Markets

Consumer Markets

Channel

Shorter, more direct, fewer linkages

Indirect, multiple linkages

Promotion

Emphasis on personal selling

Emphasis on advertising

Price

Competitive bidding, Negotiations

List prices

B2B Marketing

MarketingCustomerManufacturi

ng

Derived Demand Complex buying processes Concentrated customer

base

Emphasis on technology High level of

customization Made to order

External Environment

Internal Organization

External Linkage Internal Linkage

Contribution of Marketing within FirmCorporate/Business Unit level

The Policy Question -

Marketing’s Answer -

Tools -

Product level

Executional Level

The Policy Question -

Marketing’s Answer -

Tools -

The Policy Question -

Marketing’s Answer -

Tools -

HOW TO DEVELOP A CUSTOMER FOCUS?

Bring the voice of the customer into the organization

Market Research, Customer Visits, Market Orientation Audits

HOW TO BEST ADAPT TO THE MARKET?

Develop a value proposition and competitive positioning based on customer needs

Customer and competitor analysis

HOW TO BEST TAKE THE PRODUCTS TO MARKET?

Develop a value proposition and competitive positioning based on customer needs

Consumer Research, Product Testing, Communications Research, Channel Audits, etc.*Marketing Management, The McGraw-Hill

Lal, Quelch, Rangan

Customer Development Process

Product-Centric Approach

Customer-Centric

Approach

Customer Development Process

Prospects

Suspects

Disqualified

First-timecustomers

Repeatcustomers Clients Members

PartnersEx-customers

Market Driven Vs Market Driving

Market Driven Strategy

Market Driving Strategy

Nature of Product/Service

Incremental Innovation Breakthrough Innovation

Creates New Product, Line Extension

Truly New Product Platform

Customer Goal Satisfy/Delight Current Customers

Create Customers

Nature of customer Needs

Expressed Latent

Nature of Market Research

Quantitative Research Methods (e.g. customer surveys, test markets

Qualitative Research Methods (e.g. lead-user

observations. Focus groups)

MOVIN

G UP THE VA

LUE CHAIN

Paradigm Shift

• People move purchases to suppliers that give them more for their money -value for money

• On the internet any person regardless of the position he or she has in and organization will be able to find the best information available on any product ,services ,providers etc

• Customers often know exactly what they want – this makes it more difficult for the sales person to influence the choice

Challenges

Enter electronic market as quickly as possible

Learn to make use of new technologies to

save money and to increase creativity

Work at maximum speed and discard long

term strategic thinking

Develop multiple concepts

24

Challenges

• Rethink strategies and support systems for the Market Place

• Customers can change suppliers easily and frequently

• E-Business ,E-Commerce overtaking the present system –Brick & mortar

Challenges

Make strategic alliances

Work upon hybrid channels

Arrest the commodity trend

Manage across national boundaries

26

What do we have to understand?

• Purchasing (Buying ) Organization • Buying Processes • Roles of Buying team members (Cross Functional

Teams )• Delegation of Powers of Buying Team members –

Financial etc • Life cycle costing –Value Analysis ,Performance

Evaluation, Productivity etc• Cost of Ownership