B2B Marketing Perspectives
Anand G Khanna
Business to Business MarketingCourse Outline and Session Plan October 2010 to January 2011
Sl. No Session Topics1 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?
CONSUMERSPeople are different and
they are different at different times
4PsPrice
?
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 StructureGeographically Concentrated DispersedRelatively Few Customers Mass CustomersCompetition Oligopolistic MonopolisticProducts
Technically More Complex/ Customized
Less Complex/ Standardized
Service/Delivery/ Availability Very Important Somewhat
Important
Industrial Vs Consumer Marketing
CRITERIA Industrial Markets
Consumer Markets
Buyer BehaviorInvolvement Functional FamilyPredominant Task Motives Rational/ Technical
Psychological/ social, less technical
Relationships Interpersonal Non-personalReciprocity Expected Not expected
Decision making Distinct, stages observable
Unobservable mental stages
Industrial Vs Consumer Marketing
CRITERIA Industrial Markets
Consumer Markets
ChannelShorter, more direct, fewer linkages
Indirect, multiple linkages
PromotionEmphasis on personal selling
Emphasis on advertising
PriceCompetitive bidding, Negotiations
List prices
B2B Marketing
MarketingCustomer Manufacturing
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 DrivingMarket 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 CH
AIN
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