b2b merged

Author: manish-yadav

Post on 03-Jun-2018

221 views

Category:

Documents


0 download

Embed Size (px)

TRANSCRIPT

  • 8/11/2019 B2B Merged

    1/276

    B2B Marketing

    Module 1

    A Perspective of B2B Marketing

  • 8/11/2019 B2B Merged

    2/276

    Introduction

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    3/276

    Facts

    Proportion of pure B2B firms ~ 30%

    Share of B2B transactions ~ 46% of GDP

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    4/276

    Nature

    Customer is an organisationOrganisationalmarketing?

    Enterprises

    Users

    OEMs

    Dealers & distributors

    Institutions

    Government

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    5/276

    The B2B-B2C dichotomy

    Differences in Market structure

    Buying behaviour

    Marketing practices

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    6/276

    Market Structure

    Demand Derived vs. direct

    Volatility of demand Greater

    Elasticity of demand

    Less elastic vs. more elastic perverse (?) Market size

    Larger

    Geographic concentration

    Often clustered vs. usually dispersed

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    7/276

    The Accelerator Effect

    Due to derived demand

    Rate of change of secondary/tertiary demand

    >rate of change of primary demand

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    8/276

    Buying Behaviour

    Buying influences

    Many vs. few Purchase cycles

    Often long vs. usually short

    Transaction value

    Higher Process complexity

    More complex

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    9/276

    Buying Behaviour Contd.

    Buyer-seller interdependence Often very close

    Importance of relationships Mostly very high

    Purchase professionalism

    High vs. low Degree of interactivity High vs. low

    Formal, written rules

    Common vs. uncommon

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    10/276

    Marketing Practices

    Selling process Systems vs. product

    Personal selling usage Extensive vs. limited

    Promotion Customer-specific vs. mass marketing

    Branding Limited vs. extensive

    Market research Limited vs. extensive

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    11/276

    Marketing Practices Contd.

    Use of relationships Extensive vs. limited

    Web integration Greater

    Segmentation

    Rudimentary vs. sophisticated Product complexity Greater

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    12/276

    Customer Value Proposition

    Particular set benefits that matter most to targetcustomers

    Demonstrate the value of this superiorperformance

    Communicate to convey a sophisticated

    understanding of the customers business(process, priorities)

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    13/276

    Supply Chain

    Upstream Suppliers

    Tier I Suppliers

    Auto Manufacturers

    Dealers

    Business / Individual Buyers

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    14/276

    Classification of Goods

    Entering

    Raw materials farm products, natural products

    Manufactured materials & parts

    Foundation

    Installations

    Accessories Facilitating

    Supplies / MRO items

    Services

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    15/276

    Planning

    BusinessMarketing

    Finance &Accounting

    HR

    Logistics

    R&DPurchase

    Operations

    Service

    PGDM II 2013-15

    Business Marketing

    StrategyFormulation

  • 8/11/2019 B2B Merged

    16/276

    Thank You!

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    17/276

    B2B Marketing

    Module 2

    The Market

  • 8/11/2019 B2B Merged

    18/276

    B2B Market

    PGDM II 2013-15

    Commercial Enterprises

    Institutions

    Government

  • 8/11/2019 B2B Merged

    19/276

    Commercial Enterprises

    Distribution by size

    Geographical concentration

    Purchasing organisation - strategic procurement

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    20/276

    Size

    Buying firms are bigger in size

    MSMEs

    26 million units

    45% of the manufacturing

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    21/276

    Geographical Concentration

    Concentrated marketing efforts sales personnel,distributors

    Warehouses and/or distribution centres effectivecoverage

    Concentrated HQ coverage

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    22/276

    Purchasing Organisation

    70% of costs (manufacturing firms) straightimpact on bottomline

    Centralised procurement strategy

    Buyers responsible for specific group ofproducts

    Development of technical expertise Emergence of purchase engineers material

    evaluation, cost studies

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    23/276

  • 8/11/2019 B2B Merged

    24/276

    Procurement as Strategy

    LeveragedBuy

    (Buy for

    less)

    Linked Buy

    (Buy better)

    Value Buy

    (Consumebetter)

    IntegratedSell

    (Sell better)

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    25/276

    Strategy

    Understand items having

    Criticality in operations

    Business risk dimensions customers customersvalue

    Focus on strategic purchases

    High revenue & high customer value impact

    For less strategic purchases

    Provide complete assortment, timelyservice/supply support, simplified ordering

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    26/276

    Government

    Public procurement in India

    Central Government Ministries & departments

    States & Union territories

    Municipal and other local bodies

    PSUs

    25-30% of GDP

    INR 18000+ billion

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    27/276

    Organisations

    Defence vs. non-Defence

    15% of government procurement

    Governed by GFR (General Financial Rules,2005)

    Purchasing norms

    Upto INR 15,000: purchase without quotation 15,000 100,000: local purchase committee

    Above 100,000: through tendering

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    28/276

    Strategy Understand the complex rules and standards

    Develop system to keep abreast of procurement plans of

    each purchasing agency Product development and R&D strategy in line with

    government needs

    Develop a communications strategy

    Generate a negotiation strategy to secure favourableterms payment, contract completion, overruns

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    29/276

    Institutions Similar to governments

    Dictated by law

    Constrained by politicalconsiderations

    Privately managed

    Broader range of purchase

    than corporates Value of efficient buying

    acknowledged

    PGDM II 2013-15

    Budget limit based buying

    Staffed with professionals Dedicated materials management department

    Group purchasing

  • 8/11/2019 B2B Merged

    30/276

    Strategy

    Evaluate budgetary status

    Attention to third-party contractors

    Cultivate professional staff for product benefits

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    31/276

    Effect of IT on Purchase Behaviour Communicating with external markets

    Independent third parties

    Industry consortia Electronic marketplaces Auctions, Catalogue

    purchasing Types

    Vertical - related to core operations Horizontal - not related

    Internal coordination Inter- & intra-firm coordination - SCM

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    32/276

    Vertical MarketplacePGDM II 2013-15

  • 8/11/2019 B2B Merged

    33/276

    E-Procurement

    Use of Web-based applications, decision supporttools, and associated services to streamline and

    enhance strategic sourcing processes andknowledge management

    Purchasing managers

    Look out for new vendors

    Communicate with current suppliers

    Transact

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    34/276

    Evolution

    PGDM II 2013-15

    Traditional

    procurement

    mainly paper

    based

    Electronic

    systems to

    supporttraditional

    procurement

    Mainframe, PC,

    ERP, EDI

    Web as

    communication

    channel to

    support

    traditionalprocurement

    E-mail, websites

    Internet tools

    and platforms tocomplement

    traditional

    procurement

    online supplier

    databases, e-

    catalogs, web-

    enabled EDI

    Internet tools

    and platforms toreplace

    traditional

    procurement

    fully integrated e-

    markets,

    automatic stockreplenishment

    Time

    Technology

  • 8/11/2019 B2B Merged

    35/276

    Capabilities Online negotiations

    Create RFP, RFQ, RFI

    Conduct reverse auctions Collaboration tools

    With internal stakeholders specs, priorities

    Description of requirements in RFP

    Knowledge management Repository of procurement data

    Analytical tools

    Cost and spending analysis top management

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    36/276

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    37/276

    Auctions English highest bidder; sale of unwanted items -

    scrap

    Reverse lowest bidder; online form of tender

    purchasing

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    38/276

    Reverse Auctions One buyer several pre-qualified sellers

    Dynamic, real-time, competitive bidding

    Used for entering and facilitating goods

    PGDM II 2013-15

    Suppliers Buyers

    Reasons New business Market penetration Cycle time reduction

    Inventory management

    Reduced purchase price Lower administrative costs Control on inventory levels

    Risks Low price focus threatenslong-term relationships

    Competitive bargaining toolfor buyer

    Offering unrealistic prices

    Undermines trust Reduced buyer commitment makes

    supplier less willing to makerelationship-related investments

    Insufficient number of suppliers may

    cause non-competitive scenario

  • 8/11/2019 B2B Merged

    39/276

    Market-centred Organisation

    Marketing

    MarketResearch

    Sales

    Advertising

    Markets

    CommercialSegments

    1n

    Government

    Institutions

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    40/276

    Thank You!

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    41/276

    B2B MarketingModule 3

    Organisational Buying Behaviour

  • 8/11/2019 B2B Merged

    42/276

    Introduction No firm is an island

    Buying is a process generally well-drawn out

    Access to supply markets is imperative

    Factors for reaching supply markets & products External

    Organisational

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    43/276

    Organisational Factors Nature of business

    Business strategy

    Purchasing orientation

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    44/276

    Nature of Business

    Unit production Bespoke Technological complexity and scale affect

    competitiveness

    Design and production capabilities ofsuppliers

    Mass production Efficiency determined by equipment,

    integration among sections, raw material

    costs Highly inflexible suppliers to adjust theirlogistics and processes to be compatible

    Suppliers contribute in NPD process, crucialfor survival and growth

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    45/276

    Nature of Business

    Process production High volume, continuous, efficient Continuity is imperative

    Mostly produce intermediates & raw materials Infrequent big-ticket equipment purchases

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    46/276

    Business Strategy Generic strategy guides actions and decisions at

    functional level purchasing

    Product leadership

    Relentless innovation Technical and creative abilities

    Suppliers knowledge of customers business; offerdesign and product expertise to contribute to innovation;responsiveness to innovativeness

    Cost leadership Ongoing process of cost containment - central theme of

    dealing with suppliers

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    47/276

    Business Strategy - Social Social responsibility

    strategy may affect

    dealing with suppliers

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    48/276

    Purchasing a ComponentImagine you are a purchase manager for a PCmanufacturer. Your boss has asked you to order a

    large quantity of major electronic component.There are 3 potential suppliers A, B & C. To thebest of your knowledge, they are equal in productquality and availability.

    In each of the following situation, which supplierwould you place your order on?

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    49/276

    SituationsSupplier A Supplier B Supplier C

    Situation 1 150 per unit 155 per unit 170 per unit

    PGDM II 2013-15

    Situation 2 150 per unit 155 per unit 170 per unit

    Moretraditionaldesign.

    Installationcost: 12 perunit

    Your manufacturingmanager says thecomponent has a

    special modular designthat has an installationcost of 5 per unit

    More traditional design.Installation cost: 14 per unit

    Situation 3 150 per unit 155 per unit 170 per unit

    No premium

    expected

    No premium expected Your marketing manager

    says C has spent crores insuccessful campaign topromote the brand equity ofthis component. Consumersmay pay extra 50 per PC forhaving this component.

  • 8/11/2019 B2B Merged

    50/276

  • 8/11/2019 B2B Merged

    51/276

    Purchasing Orientation Supply management Maximise value along the supply chain extensive

    collaboration

    Focus on end-customers Assessment of competencies and capabilities to determine

    which activities to be done in-house and which tooutsource

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    52/276

    Marketing Implications Buying orientation + less important (MRO)Focus on efficiency

    Innovation in the offering Supply management orientation + high

    complexity & high riskStrive to become key contributor in customer strategy;

    technical, human & financial resources necessary

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    53/276

    Segmenting Purchase Decisions

    PGDM II 2013-15

    Advertising

    Telemarketing

    Office supplies

    Travel

    Materials

    LogisticsProfessional services

    Critical componentsHigh-technology

    products

    Purchase complexity

    Businessrisk

    Low

    High

    High

  • 8/11/2019 B2B Merged

    54/276

    Purchase ProcessPGDM II 2013-15

    Performance feedback & evaluation

    Selection & establishment of order routine

    Proposal evaluation & supplier selection

    Search & qualification of potential sources

    Determination of specification & quantity

    Organisational problem recognition

  • 8/11/2019 B2B Merged

    55/276

    Buying Situation

    PGDM II 2013-15

    Based on familiarity with products or process New task

    Judgmental Strategic

    Modified re-buy Simple Complex

    Straight re-buy Casual Routine low priority

  • 8/11/2019 B2B Merged

    56/276

    Buygrid Framework

    PGDM II 2013-15

    New task Modified re-buy Straight re-buy

    Problem recognition Yes Possibly No

    Determination ofspecification

    Yes Yes No

    Source search &qualification

    Extensive Limited No

    Proposal evaluation &supplier selection

    Extensive Limited No

    Selection of orderroutine

    Yes Possibly No

    Performance feedback& evaluation

    Yes Yes Yes

  • 8/11/2019 B2B Merged

    57/276

    Marketing Implications

    New task Get involved at an early stage

    Obtain information on the nature of the purchasing

    problem Identify specific product requirements

    Formulate proposals to match the requirements

    In-suppliers to monitor changing needs &support the customer in such situations

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    58/276

    Marketing Implications Contd.PGDM II 2013-15

    Modified re-buy Happens when customer sees potential benefits from

    re-looking into alternative supply solutions

    In-suppliers Move decision-makers from modified to straight re-buy thus

    reducing perceived benefits

    Invest into understanding purchase requirement andextinguish problems fast

    Out suppliers Ensure the purchase stays in modified re-buy as long as

    possible

    Offer performance guarantees

  • 8/11/2019 B2B Merged

    59/276

    Marketing Implications Contd.PGDM II 2013-15

    Straight re-buy In-suppliers

    Regular contact to ensure no complaints

    Identify and resolve problem areas quickly

    Reduce customer buying effort automated re-ordering

    Out suppliers Price cutting not an attractive option for customer

    Move to modified re-buy by reducing the total cost ofownership

  • 8/11/2019 B2B Merged

    60/276

    Forces Shaping OBB

    Roles, relativeinfluences, and patternsof interaction of buyingcentre members

    Job function Past experience Buying motives

    Goals, objectives, strategies Organisational position of

    purchasing

    Economic outlook Pace of technological

    change Global trade relations

    Environmental Organisational

    GroupIndividual

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    61/276

    Environmental Forces Economic

    Shapes a firms ability and willingness to buy

    Emerging economies turning into sourcing hubs Technological

    Internet

    Pace of change importance of purchasing manager

    More intense but less time-intensive search

    Tracking social media buzz

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    62/276

    Organisational Forces Strategic priorities

    How can procurement be a stronger competitiveweapon?

    Best value-chain wins

    Organisational position

    Centralisation of procurement

    Integrate procurement with corporate strategy Economise on procurement costs

    Nature of supply environment

    Location of key buying influences

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    63/276

    Group Forces

    PGDM II 2013-15

    Buying Centre

    Initiators

    Deciders

    Buyers Influencers

    Users

    Gatekeepers

  • 8/11/2019 B2B Merged

    64/276

    Functions vs. Roles

    PGDM II 2013-15

    Operations

    Purchasing

    Engineering

    Finance

    Marketing Gatekeeper

    Buyer

    Decider

    Influencer

    User

  • 8/11/2019 B2B Merged

    65/276

    Marketing to DMU

    PGDM II 2013-15

    For new task, get in touch with DMU membersat an early stage

    Identify the specific requirements / concernswith respect to the current purchasing issue

    Satisfy individual needs and reduce theperceived risk

    Know the key members of the DMU

  • 8/11/2019 B2B Merged

    66/276

    Clues Isolate the personal stakeholders

    Follow the information flow

    Identify the experts Trace the connections to the top

    Understand the role of Purchase

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    67/276

    Individual Forces Evaluative criteria

    Information processing

    Selective exposure Selective attention

    Selective perception

    Selective retention

    Risk reduction strategies

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    68/276

    Perceived Risk Risk is inherent in business markets uncertainty &

    negative consequences Types

    Financial

    Performance Social

    Perceived risk heightens with new task or complexmodified re-buy

    With increased risk Buying centre composition changes number &

    authority Increased information search Deliberate investment of effort in the buying process Suppliers with proven track records preferred

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    69/276

    The Individual Purchasing Manager Not perfectly rational nor objective Personal factors

    Attitude towards perceived risk Handling risk Accrued rewards perception Backgrounds education, employment Information collection and processing abilities

    Extrinsic factors Inter-functional coordination Inter-firm coordination supply chain issues Purchasing community - WOM Online purchasing reverse auctions

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    70/276

    Buyer Tasks Consulting with colleagues in other departments

    Determining the necessary parts, materials,

    services and supplies Calculating the required quantity

    Searching for suppliers

    Negotiating contracts Monitoring supplier performance

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    71/276

    Buyer Skills Keeping detailed and accurate records

    Collecting and analysing information

    Working under pressure Decision making using experience and personal

    judgment

    Using mathematical & analytical tools Good inter-personal skills

    Negotiating and bargaining skills

    Managing people supervising

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    72/276

    Thank You!

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    73/276

  • 8/11/2019 B2B Merged

    74/276

    Marketing Mix - Inadequacies Assumptions

    Conflict of interest between marketer and customer

    Focus on each individual transaction Marketer is active, customer is passive

    Process consists of study of buying behaviour, thenattempt to influence the behaviour favourably

    Prescriptive approach Neo-classical economic concepts do not hold in

    business markets

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    75/276

    Relationship MarketingAll activities directed towards establishing,

    developing, and maintaining successful exchanges

    with customers and other constituents

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    76/276

    Benefits1. Loyal customers

    are far more profitable than customers who are

    price sensitive perceive few differences among alternative

    offerings

    2. Firms can secure important and durable

    advantages that are hard for competitors tounderstand, copy or displace

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    77/276

    Types of Relationships

    PGDM II 2013-15

    Transactional

    Collaborative

    Value

    adding

    OperationalLinkages

  • 8/11/2019 B2B Merged

    78/276

    Core Elements Trust

    Willingness to rely on an exchange partner in whom

    one has confidence Commitment

    One partners belief that an ongoing relationship isso important that it deserves maximum efforts to

    maintain it

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    79/276

    Range of Buyer-Seller Relationships

    Transactional Collaborative

    Availability of alternatives Many Few

    Supply market dynamism Stable Volatile

    Importance of purchase Low High

    Complexity of purchase Low High

    Information exchange Low High

    Operational linkages Limited Extensive

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    80/276

    Switching Costs Investments

    Money

    People Lasting assets

    Procedures

    Risk of exposure cost of making wrong choice

    Critical to operations

    Less established suppliers

    Technically complex products

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    81/276

    Potential of Value Drivers

    PGDM II 2013-15

    Sourcing

    Benefits

    0.52

    Costs

    0.07

    Operations

    Benefits

    0.21

    Costs

    0.10

    Offering

    Benefits0.08

    Costs0.03

    (Ulaga & Eggert, 2006)

  • 8/11/2019 B2B Merged

    82/276

    Power of Relationships Create a process that will call for short lead times

    smaller quantities produced todecrease inventory risk

    increase the number of availablestyles and/or choice

    Maintain design, production, anddistribution to enable sharp responseto shifts in consumer demands

    keeping exclusivity unharmed Design in-house

    Manufacturing 50% in Spain, restfrom suppliers (700 in Europe)

    Shipment to Zara stores from

    distribution centres in 8 hours

    PGDM II 2013-15

    PGDM II

  • 8/11/2019 B2B Merged

    83/276

    Customer Profitability Accurate tracing of costs to individual customers

    The profitable few

    Large customers most/least profitable, seldom in themiddle

    Low cost-to-serve customers profitable

    High cost-to-serve customers unprofitable, unless

    paying premium for specialised services received

    PGDM II 2013-15

    PGDM II

  • 8/11/2019 B2B Merged

    84/276

    The Whale Curve

    PGDM II 2013-15

    PGDM II

  • 8/11/2019 B2B Merged

    85/276

    Managing Costly Customers Look inside

    Internal processes should accommodate customer

    preferences Sharper profit lens

    Net margin vis--vis cost-to-serve

    Identify profitable customers

    PGDM II 2013-15

    PGDM II 2013 15

  • 8/11/2019 B2B Merged

    86/276

    Profitable?

    PGDM II 2013-15

    PassiveCarriage

    trade

    BargainBasement

    Aggressive

    Sales

    Cost-to-serve

    PGDM II 2013 15

  • 8/11/2019 B2B Merged

    87/276

    CharacteristicsHigh cost-to-serve Low cost-to-serve

    Pre-sales Extensive support(technical and sales resources)

    Limited(standard pricing and ordering)

    Production Custom-made productsSmall order quantitiesUnpredictable orderingpatternManual processing

    StandardLargePredictableElectronic

    Delivery Fast StandardPost-sales Extensive support

    (customer training,installation, customer support)

    Limited

    PGDM II 2013-15

    PGDM II 2013 15

  • 8/11/2019 B2B Merged

    88/276

    Managing Unprofitable Customers Improve profitability

    Reduce cost of activities for serving

    Focus on the high-cost elements Loss making

    Assess other benefits

    New customers payback on a longer term

    Opportunity for learning

    PGDM II 2013-15

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    89/276

    Customer Relationship ManagementCross-functional process

    to achievea continuing dialoguewith customers

    acrossall customer touch-points

    with

    personalised treatment of the most valuablecustomersto ensure customer retention and the effectiveness of

    marketing initiatives

    PGDM II 2013-15

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    90/276

    CRM system

    PGDM II 2013-15

    CRMSoftware

    SalespersonsService teams

    DealersDistributorsCall centresE-mails

    Futurecustomerinteractions

    Marketforecasts

    Product design SCM

    Synthesis

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    91/276

    CRM MythsIt is just database marketing

    It is purely a marketing process

    It is just an IT issue

    It is just about building loyalty

    It can be implemented by any firm

    PGDM II 2013 15

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    92/276

    CRM Strategy

    PGDM II 2013 15

    Acquiring the right customers

    Stock of current and potential customerrelationships

    Collective knowledge of selecting, initiating,developing & maintaining profitable relationships

    Crafting the right value proposition

    Understanding how customers definevalue How benefits compare to those of the next-best

    alternative

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    93/276

    CRM Strategy Contd.

    PGDM II 2013 15

    Instituting the best processes Sales assumes a central role Close coordination with supporting functions

    logistics, technical service, customer service Motivating employees

    Training & development Incentivise with customer strategy

    Learning to retain customers Long-standing customer economical to serve

    organisational learning Evaluation expectation mis-match!

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    94/276

    Strategic Alliances Long-run linkage vis--vis JV

    Accessing complementary skills

    Benefits Access to markets and/or technology

    Economies of scale in manufacturing, R&D,marketing

    Reduced TTM

    Risk sharing

    3 5

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    95/276

    Alliances Non-competing firms International expansion Renault & Diesel

    Nacional (Mexico)

    Vertical integration Aerospatia & Thomson Diversification BMW & Rolls Royce

    Competing firms Shared supplier alliance Volkswagen & Renault

    (gearbox) Quasi-concentration alliance BAE, EADS Systems,

    Alenia (Tornado fighter) Complementary alliance Tata & Fiat (distribution)

    3 5

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    96/276

    3 5

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    97/276

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    98/276

    Extended Enterprise Daimler

    Transaction

    (market-based

    competition)

    Coordination

    (selective

    competition)

    Cooperation

    (selective

    partnership)

    Alliance

    (strategic

    partnership)

    Operational types Strategic types

    Relationship

    based on

    Data Exchanging

    information

    Transferring

    know-how

    Building up to

    specialist

    knowledge

    Relationship

    lasts for

    Transaction Annual contract Series life cycle Life cycle and

    beyond

    Extent of joint

    commitment

    Suppliers not

    integrated

    Integrated into

    NPD to limitedextent, via

    well-defined

    interfaces

    Integrated into

    NPD to limitedextent,

    interfaces

    defined jointly

    Several depts

    integrated,joint NPD,

    investment in

    joint assets

    Examples Office supplies Mouldings Exhaust

    systems

    Fuel cells

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    99/276

    Before the Handshake

    Some toughquestions to

    ask

    Does it present risks to ourbusiness?

    Will it generate growth in ourcore business?

    Will it create value for ourcustomers?

    How compatible are we technically and culturally?

    Are we committed to a long-term relationship?

    What are the strengths andweaknesses of each potential

    partner?

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    100/276

    Determinants of Success Building a dedicated alliance function

    Developing a joint value proposition

    Developing close working relationships Boundary-spanning connections

    Integrating points of contact

    Strategic

    Tactical Operational

    Inter-personal

    Cultural

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    101/276

    Evolution of Networks Relationshipschannelssupply chains

    networks

    Marketing & purchasing distinction ismeaningless - seamless, iterative process

    Purchasing can overlap with productdevelopment, marketing planning

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    102/276

    Inter-organisationalRelationship

    MarketingChannel

    Supplychain

    IndustrialNetwork

    Supplynetwork

    Distributionnetwork

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    103/276

    Network Situated/embedded in a network of

    relationships

    Relative value is function of its position in thenetwork

    Change in mindset

    Interdependent

    Limit on the ability to think & act independently

    Extends capabilities beyond the boundaries ofthe firm

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    104/276

    Fujitsu

    Fujitsu Sun: disk drives

    Fujitsu Unisys, Tandem, Olivetti,Siemens: disk drives

    Toshiba Sun: semiconductors,

    optical drives Sun Xerox, Hitachi, Panasonic:

    PCs & workstations

    Sun Fujitsu: workstations

    Fujitsu ICL: hardware & design

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    105/276

    Thank You!

  • 8/11/2019 B2B Merged

    106/276

    B2B Marketing

    Module 5

    Segmentation, Targeting & Positioning

  • 8/11/2019 B2B Merged

    107/276

    Value of Segmentation

  • 8/11/2019 B2B Merged

    108/276

    Facilitating better understanding of the whole

    marketplacebehaviour of buyers and why theybuy

    Enabling better selection of market segments that

    best fit the companys capabilities Enabling improved management of the marketing

    activity

    Know which customers to treat similarly and which

    to treat differently

    PGDM II 2013-15

    Criteria for Evaluation

  • 8/11/2019 B2B Merged

    109/276

    Measurability

    Accessibility

    Actionability

    Substantiality Responsiveness

    PGDM II 2013-15

    Segmentation Bases

  • 8/11/2019 B2B Merged

    110/276

    Firmographics

    Operatingvariables

    Purchasing

    approach

    Situationalfactors

    Personalcharacteristics

    Macro

    Micro

    PGDM II 2013-15

    Firmographics

  • 8/11/2019 B2B Merged

    111/276

    1. Industry

    Industrial classification

    Knowledge of the use for the suppliers technology

    2. Customer location

    Ease of reaching Presence of sales staff

    Logistics

    3. Firm size

    Depends on the purchase item: capex vs. MRO

    Supply justification

    PGDM II 2013-15

    Segmentation Services

  • 8/11/2019 B2B Merged

    112/276

    PGDM II 2013-15

    Operating Variables

  • 8/11/2019 B2B Merged

    113/276

    Relatively easily observable

    First manifestations of how customer firms behave

    1. Company technology

    Compatibility

    2. Product & brand-use status

    Readiness to use

    Usage rate Customers knowledge of supplier products: ability to

    communicate need

    PGDM II 2013-15

    Operating Variables

  • 8/11/2019 B2B Merged

    114/276

    3. Customer capabilities

    Establish what customers are capable of doing with the

    product/process

    PGDM II 2013-15

    Pilkington Glass

  • 8/11/2019 B2B Merged

    115/276

    PGDM II 2013-15

    Operating Variables

  • 8/11/2019 B2B Merged

    116/276

    4. Firm strategic type

    Strong indicator of buying behaviour

    Difficult to ascertain

    Employee responses (socially acceptable?)

    Observation (outsiders)

    Content analysis of company plans (rare)

    PGDM II 2013-15

    Miles & Snow Typology

  • 8/11/2019 B2B Merged

    117/276

    Proactiveapproach

    Environment dynamism

    ReactorDefender

    Prospector

    Analyser

    Innovative

    No consistent

    strategy

    Efficient & adaptive

    Efficient

    PGDM II 2013-15

    Purchasing Approach

  • 8/11/2019 B2B Merged

    118/276

    1. Purchasing function organisation

    Unstructured in smaller firms or proprietorship firms

    Centralised procurement?

    2. Power structure

    Importance of purchases Relative influence of departments in DMU

    3. General purchasing policies

    Single or multiple vendors

    Vendor rating / accreditation / bidding methods /

    disclosure of costs

    PGDM II 2013-15

    Purchasing Approach

  • 8/11/2019 B2B Merged

    119/276

    5. Purchasing criteria

    Financial (purchase price vs. TCO)

    Technological (product performance parameters)

    Service level (delivery, pre-sales technical assistance,

    after-sales service)

    6. Buyer-seller relationships

    Relationship orientation

    7. Buying situation

    PGDM II 2013-15

    Situational Factors

  • 8/11/2019 B2B Merged

    120/276

    Prevailing need - urgency

    Usage plan

    Order size

    PGDM II 2013-15

    Innovativeness

  • 8/11/2019 B2B Merged

    121/276

    Willingness to purchase new products

    Level of resistance to change

    Desire to excel

    Product diffusion rate

    PGDM II 2013-15

    Buyer Personal Characteristics

  • 8/11/2019 B2B Merged

    122/276

    Demographicsage, educational background

    Decision making stylenormative / conservative

    Risk appetite

    Confidence

    Drive behind purchase behaviour

    Fastidiousness in information search

    Supplier orientation

    Evaluation Sharing of views with supplier personnel

    PGDM II 2013-15

    Targeting

  • 8/11/2019 B2B Merged

    123/276

    Identified

    Segment

    Target

    Segment

    Relative

    Attractiveness

    ResourceDemands

    Management

    Demands

    Organisational

    Demands

    Check for acceptability

    No

    Yes

    Yes

    Yes

    Yes

    No

    No

    No

    Not acceptable -selection

    unsuitable:

    select a new

    segment

    PGDM II 2013-15

    Estimating Segment Demand

  • 8/11/2019 B2B Merged

    124/276

    Qualitative

    Executive judgment

    Frequent & repetitive forecasts

    Stable environment

    Small lag between decision, action & feedback Sales force composite

    Delphi technique

    PGDM II 2013-15

    Estimating Segment Demand

  • 8/11/2019 B2B Merged

    125/276

    Quantitative

    Time series: trend, seasonal, cyclical, irregular

    patterns

    Regression / causal analysis

    Identify factors that affected past sales Fit them into a mathematical / statistical model

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    126/276

    MARKETING RESEARCH

    PGDM II 2013-15

    Value of Information

  • 8/11/2019 B2B Merged

    127/276

    Characteristics of information (Gates, 1996)

    Accuracy

    Timeliness

    Relevance

    Uniqueness

    Technical (accurate) vs. managerial (timely and

    relevant)

    Communication between research agency and client

    PGDM II 2013-15

    Sampling Methods

  • 8/11/2019 B2B Merged

    128/276

    Probability

    Simple Random

    Stratified Random

    Systematic Cluster/multi-stage

    Non-probability

    Convenience

    Snowball

    Quota Focus groups

    PGDM II 2013-15

    Probability Sampling

  • 8/11/2019 B2B Merged

    129/276

    Stratified

    Sub-classification of sample based on proportion ofpopulation

    Manufacturing vs. service for different firm sizes

    Systematic

    Within a single industry sector

    Cluster Naturally occurring groups viz. departments within firms

    PGDM II 2013-15

    Non-probability Sampling

  • 8/11/2019 B2B Merged

    130/276

    Convenience

    Limited validity

    Snowball

    Association-based

    Convenient Quota

    Same as stratified but not randomly selected

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    131/276

    Industry Classification

  • 8/11/2019 B2B Merged

    132/276

    To ensure common understanding of industry

    definition

    Every form of economic activity put under an alpha-

    numeric category

    United Nations: ISIC India: NIC

    US: NAICS

    PGDM II 2013-15

    NIC

  • 8/11/2019 B2B Merged

    133/276

    PGDM II 2013-15

    Using MR Agencies

  • 8/11/2019 B2B Merged

    134/276

    Product managers have more contact with

    customers than MR agencies Smaller samples (mostly the universe even)

    Concerned with both direct and derived demand

    Presence of several buying centre members, who may

    change

    Less focusabsence of MR department, reliance on

    secondary data & expert opinions

    Use of information influenced by Exploratory research (+)

    Degree of formalisation (+)

    Degree of surprise in findings (-)PGDM II 2013-15

    Market Research Agencies

  • 8/11/2019 B2B Merged

    135/276

    B2B professional service firms

    All buyer-seller relationship concepts apply

    Determinants in successful client-agency

    relationship

    Clear understanding of the management problem priorto contacting the agency

    Close involvement ASAP

    Check credentials, experience, industry familiarity of

    agency

    PGDM II 2013-15

    Secondary Research

  • 8/11/2019 B2B Merged

    136/276

    Benefits

    Cost-effective, MR budget is low in B2B firms

    Derived demand study

    Availability of data

    Use of internet Crucial, especially with the need for secondary data

    Relevance and recency issues

    Care about dubiousness of data

    PGDM II 2013-15

    Business Information Sources

  • 8/11/2019 B2B Merged

    137/276

    PGDM II 2013-15

    Targeting Strategy

  • 8/11/2019 B2B Merged

    138/276

    Undifferentiated

    Differentiated

    Niche

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    139/276

    PGDM II 2013-15

    Positioning

  • 8/11/2019 B2B Merged

    140/276

    Offering occupies a space in the buyers mind

    Relative position - basis by which comparison ismade with ideal position and also others

    Clarity about the capabilities

    Using value proposition Resonating focus: offering based on those few elements

    where performances matter most to buyer firm

    PGDM II 2013-15

    Repositioning

  • 8/11/2019 B2B Merged

    141/276

    Completenessofoffering

    Nature of relationship

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    142/276

    THANK YOU!

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    143/276

    B2B MARKETING

    Module 6

    Product Management

    B2B PRODUCTOFFERINGS

  • 8/11/2019 B2B Merged

    144/276

    PGDMII201

    3-15

    Core

    benefit

    Physical

    attributes

    Service

    elements

    Advice giving

    ADAPTATION SPACE

    CATEGORISINGPRODUCTLINES

  • 8/11/2019 B2B Merged

    145/276

    PGDMII2013-15

    Businessservices

    Custom-designedproducts

    Custom-built

    products

    Catalogue(proprietary)

    products

    PRODUCT POLICY

  • 8/11/2019 B2B Merged

    146/276

    PRODUCTPOLICY

    Set of decisions concerning the productsand services being offered P

    GDMII2013-15

    COMMODITY PRODUCTS

  • 8/11/2019 B2B Merged

    147/276

    COMMODITYPRODUCTS

    Deeper into the PLCdifferentiation gets diffused

    Price is the sole differentiator

    Continuous innovation in product and marketing to

    show added value to customers

    there is no such thing as a commodity. All goodsand services are differentiable (Levitt, 1980)

    PGDMII2013-15

  • 8/11/2019 B2B Merged

    148/276

    PGDMII2013-15

    PRODUCTPORTFOLIO

  • 8/11/2019 B2B Merged

    149/276

    Collection of all products offered by a firm

    Portfolio management

    Decisions regarding current and future products

    Finite company resources

    Portfolio elements

    Items

    Lines

    Depth

    Mix

    PGDMII2013-15

    AQUCAR Water treatment microbiocide portfolioincluding glutaraldehyde, glut/quat blends, DBNPA,

    bronopol, OPP and dimethyl-oxazolidine available

    globally for use in biofouling control, anaerobic

    microbial control, and fluid preservation

  • 8/11/2019 B2B Merged

    150/276

    Agro-sciences

    Construction

    Electronics & Communications

    Energy Storage

    Healthcare & Medical

    Home & Office

    Infrastructure

    Nutrition

    Oil & Gas

    Packaging

    Personal Care & ApparelRenewable Energy

    Transportation

    Water

    , p

    Battery Materials: Differentiated solution for battery

    cycle life improvement through a proprietary coating

    process.

    FUELSAVER Antimicrobial agent for preserving

    fuels, registered by the U.S. EPA for use as a biocide

    and fuel additive for diesel oil, fuel oil or kerosene

    Heat Transfer Fluids:

    DOWTHERM Q Heat transfer

    fluid additive for waste heat recovery in oil

    applications

    OUDRACool

    : Solid epoxy resins for low

    temperature set and long-lasting protection

    OUDRACure Curing agents offering a systems

    approach to extending durability

    OUDRASperse: Waterborne dispersions,

    manufactured without any added solvents

    OUDRATherm: Advanced epoxy resins for extreme

    high temperature and harsh conditions

    OUDRATough: Advanced epoxy resins for damage

    tolerance, corrosion protection and durability

    PGDMII2013-15

  • 8/11/2019 B2B Merged

    151/276

    PGDMII2013-15

    PRODUCTMARKET

  • 8/11/2019 B2B Merged

    152/276

    O C

    Accurate definition is imperative Customer needs vis--vis ways of satisfying the

    needsconstant change

    Dimensions of definition

    Customer function Technology

    Customer segment

    Value-added system

    PGDMII2013-15

    COMPETINGFORTODAYWHILEPREPARING

    FORTOMORROW ABELL, 1999

  • 8/11/2019 B2B Merged

    153/276

    ,

    Competition at technology / supplier / brand level Planning for today

    Clear precise definition of businesstarget

    segments, customer functions, business approach to

    be taken

    Redefine for future

    Planning for tomorrowreshaping the business

    for future

    PGDMII2013-15

    FUTUREGROWTHPROSPECTS

  • 8/11/2019 B2B Merged

    154/276

    Important customer groups providing explosivefuture growth opportunities

    Non-consumers: lacking the skills, training or

    resources to purchase

    Undershot consumers

    Overshot consumers

    PGDMII2013-15

    PRODUCTSTRATEGY

  • 8/11/2019 B2B Merged

    155/276

    Positioningplace occupied in a particularmarket

    Measuring organisational buyers perceptions and

    preferences in relation to competition

    Perception based on bundle of attributes viz. quality,

    service, etc.emphasise on attributes having

    central role

    PGDMII2013-15

    POSITIONINGPROCESS

  • 8/11/2019 B2B Merged

    156/276

    Identify relevantcompetitive

    products

    Identifydeterminant

    attributescustomers use todifferentiate and

    select

    Survey existingand potentialcustomers forrating of all

    options againsteach attribute

    Determineproducts currentposition in each

    segment

    Examine fitbetween

    preferences andcurrent position

    Select Positioning

    or RepositioningStrategy

    PGDMII2013-15

    STRATEGYOPTIONS

  • 8/11/2019 B2B Merged

    157/276

    Increaseimportance ofattribute tocustomers

    Increase

    differencebetween

    competitionsand selfsproducts

    PGDMII2013-15

  • 8/11/2019 B2B Merged

    158/276

    PGDMII2013-15

  • 8/11/2019 B2B Merged

    159/276

    PGDMII2013-15

    ORGANISINGFORINNOVATION

  • 8/11/2019 B2B Merged

    160/276

    PGDMII2013-15

    It is not about serendipity Organisational innovativeness

    Create an environment where creative individualscan operate within an inter-organisational contextthat harnesses their creativity

    Features of an innovative firm Commitment to long-term growth

    Willingness to include risky opportunities within abalanced portfolio of activities

    Mutual respect amongst individuals and inclination

    to work across functions Readiness to accept change and failure

    Combination of suitable specialisation and diversityof knowledge

    B2B RELATIONSHIPSINMANAGING

    INNOVATIONS

  • 8/11/2019 B2B Merged

    161/276

    The innovation team game extends beyond the firm Suppliers and customers can be sources of ideas as

    well as capabilities

    Aspects

    Type of innovation project Degree of innovativeness required

    Degree of knowledge- sharing

    Formality of knowledge-sharing mechanism

    PGDMII2013-15

    PROJECTCLASSIFICATIONS

  • 8/11/2019 B2B Merged

    162/276

    Incremental enhancementsProduct and/or processDerivative

    Design and components shared by aproduct group

    Several changes in product and process

    Platform

    New core product/process

    Fundamentally different from previousgenerations

    Breakthrough

    Knowledge creation

    New materials and technologies leading tocommercial development

    R&D

    PGDMII2013-15

    DISRUPTIVEINNOVATION

  • 8/11/2019 B2B Merged

    163/276

    Firms possessing the capacityand capability to innovate

    may fail when the innovation

    does not address the

    foreseeable needs of current

    customers

    These firms had their

    competitive antennae up,

    aggressively invested in new

    products and technologies andlistened astutely to their

    customers

    PGDMII2013

    -15

    DISRUPTIVESTRATEGIES

  • 8/11/2019 B2B Merged

    164/276

    PGDMII2013

    -15

    Low-end test1. Customers at low

    end of the market

    2. Eager to purchase a

    good enough

    product at a lowerprice

    3. Create a business

    model that can yield

    profits from this low

    end of the market

    New market test A large population can

    be defined who lack

    money / equipment /

    skill to acquire the

    product / serviceand/or

    Present customers

    have to go to an

    inconvenient location

    to use this

  • 8/11/2019 B2B Merged

    165/276

    PGDMII2013

    -15

    If Id have asked my customers what they

    Resisting the Steve Jobs Innovation Temptation

  • 8/11/2019 B2B Merged

    166/276

    PGDMII2013

    -15

    If I d have asked my customers what theywanted, they would have told me a faster horse.

    Henry Ford

    Conceptualize products customers might

    need before spending on development and launch

    B2C is a whole different ballgame from B2B products Compare your IQ (Innovation Quotient) to Steves and

    act accordingly. Learn how to attack the right market.

    Uncover customer outcomes. Dont just ask customers.

    Prioritize customer outcomes. Take advantage of the profit motive.

    Get creative with the solutions.

    STAGESOFNPD

  • 8/11/2019 B2B Merged

    167/276

    Idea

    generating

    Screening Planning DevelopingTest

    marketing Launching

    PGDMII2013

    -15

    Analysing thebusinesscase

    Businessplanning

    Concept Features Prototypes Marketing

    support

    IDEATIONPROCESS

  • 8/11/2019 B2B Merged

    168/276

    Some questions managers might as themselves Can we change the properties of the product?

    Can the standard components be changed?

    Can it be made smaller/cheaper?

    Are there any new way of performing a current productfunction?

    Is the products core function necessary at all?

    How can we utilise the Internet to improve the

    product/service?

    PGDMII2013

    -15

    LACUNINB2B NPD PROCESS

  • 8/11/2019 B2B Merged

    169/276

    Going throughthe motions

    In structuringactivities

    Indocumentingactivities

    Insufficientspeed

    Unaware ofTTM

    Not enoughoverlappingstages

    Stages left tosingle

    departments

    Lack of marketorientation

    Insufficientcustomerinput

    Irregularcustomercontactduring NPD

    Insufficientchecks

    Making afuzzybusiness case

    Allowingexpenses torise beforeuncertainties

    have reduced

    PGDMII2013

    -15

    MOSTINNOVATIVEFIRMS- 2012 (FORBES)

    12 month

    Sales

    5-Year

    Annualised Total Market Innovation

  • 8/11/2019 B2B Merged

    170/276

    RankFirm Growth (%) Return (%) Cap ( bn) Premium

    1 Salesforce.com 32.1 21.6 25.85 72.8

    2 Alexion Pharma 39.2 38.4 18.24 72.3

    3 VMware 16.3 19.0 35.94 63.7

    4 Regeron Pharma 128.3 65.8 16.75 63.1

    5 ARM Holdings 22.5 47.9 19.62 61.2

    6 Baidu 44.6 32.8 47.3 60.6

    7 Amazon.com 23.0 31.0 119.01 60.2

    8 Intuitive Surgicals 18.3 5.2 18.44 53.9

    9 Rakuten 14.1 23.1 13.06 50.7

    10 Natura Cosmeticos

    -3.9 14.5 10.54 48.5

    40 TCS 14.1 26.5 53.5 32.6

    PGDMII2013

    -15

    A measure of how much investors have bid up the stock price of a company above the value of its existingbusiness based on expectations of future innovative results (new products, services and markets). Firms must have$10 billion in market cap, spend at least 1% of their asset base on R&D and have seven years of public data.

    Getting

    into the

    d

    Getting

    through the

    mud

    Protecting

    your ideas Appearing

    to be

    t l

    http://ads.forbes.com/RealMedia/ads/click_lx.ads/forbes.com/specialslot/innovative-companies-11/forbes.com/technology/339148193/StoryLogo/OasDefault_v5/default/empty.gif/64644e63576c4365472f494143473162
  • 8/11/2019 B2B Merged

    171/276

    NPD THROUGHNETWORKS

    Open innovation (Prahalad & Krishnan, 2008)or

    distributed co-creation (Bughin et al, 2008)

    Downstream co-creation

    Staying power in pursuing activities Resources to push through projects

    Put less optimistic projects on hold

    PGDMII2013

    -15

    mud neutral

  • 8/11/2019 B2B Merged

    172/276

    THANKYOU!!

    PGDMII2013-15

  • 8/11/2019 B2B Merged

    173/276

    B2B MARKETING

    Module 7

    Services for Business Markets

    CUSTOMEREXPERIENCEMANAGEMENT

  • 8/11/2019 B2B Merged

    174/276

    Encompasses the dimensions of the offering Product features

    Service aspects

    Ease of use

    Advertising

    Reliability Way problems are resolved

    Process of becoming a customer

    Management: Sum total of processes that capture

    customers subjective thoughts about a firm Surveys & targeted studies at interaction points to

    identify gaps between customer expectation andexperience

    PGDMII2013

    -15

  • 8/11/2019 B2B Merged

    175/276

    CONTINUUM

  • 8/11/2019 B2B Merged

    176/276

    GoodsDominant

    ServicesDominant

    LubricantsOffice

    supplies

    AdvertisingMachinery PC Janitorial

    &

    cleaning

    Freight

    transport

    PGDM

    II2013-15

    Telecom

    systemsMeeting

    hotel

    Management

    consulting

    CLASSIFICATION

  • 8/11/2019 B2B Merged

    177/276

    Product-related

    Delivery

    Installation

    &maintenance

    After-salestraining

    Warranty

    Marketing

    MR

    Advertising

    Exportadvice

    Professional

    Consulting

    Accountancy

    Legal

    Information

    Inventorymanagement

    SCM

    Dataaggregation

    Financial

    Productpurchasefinancing

    Billingmanagement

    Creditevaluation

    Banking &insurance

    PGDMII2013

    -15

    SERVICEATTRIBUTES

  • 8/11/2019 B2B Merged

    178/276

    Search Can be evaluated before purchase

    High for goods

    Experience Can be evaluated during the service delivery process

    Credence Can take a long time to evaluateeven after the process

    is over

    PGDMII2013

    -15

    FEATURESOFSERVICES

  • 8/11/2019 B2B Merged

    179/276

    Intangible

    Perishable

    Variable Inseparable

    PGDMII2013

    -15

    MARKETINGIMPLICATIONS

  • 8/11/2019 B2B Merged

    180/276

    Intangible

    Make tangiblethrough

    concrete cues

    Perishable

    Plan capacityaround peak

    demand

    Pricing andpromotion to

    even outdemand

    Variable

    Develop systemsto minimise

    deviation andhuman error

    Automate

    Prepackage theservice

    Inseparable

    Effective

    screening andrecruitment

    Training ofpersonnel to get

    it right

    Trainingcustomers

    PGDMII2013

    -15

    STAGESOFSERVICISATION

  • 8/11/2019 B2B Merged

    181/276

    1

    Manufacturing and/or distributioncapabilities

    2Services complementing products

    3Marketing product-service combinations

    PGDMII2013

    -15

    Responsiveness

  • 8/11/2019 B2B Merged

    182/276

    PGDMII2013

    -15

    SERVICEQUALITY

    Reliability

    Assurance

    Empathy

    Tangibles

    CUSTOMERSATISFACTION& LOYALTY

  • 8/11/2019 B2B Merged

    183/276

    Basic product/service attributesall competitorswould provide

    Basic support services that render the offering

    more effective or easier to use

    Recovery process for quickly fixing problems Extraordinary servicessolving unique problems

    / meeting unique needs sense of customisation

    PGDMII2013

    -15

    THEGAPSPG

  • 8/11/2019 B2B Merged

    184/276

    1: Customer expectationCompany understanding

    2: Company understandingSetting standards

    3: Standards setServicedelivery

    4: DeliveryExternalcommunication

    GDM

    II2013-15

    SERVICEFAILURE

  • 8/11/2019 B2B Merged

    185/276

    When any individual gap or the sum totalof all gaps become substantially high

    Desired Service

    Zone of Tolerance

    Adequate Service

    PGDMII2013

    -15

    SERVICERECOVERY

  • 8/11/2019 B2B Merged

    186/276

    Procedures, policies & processes used to resolveservice failure promptly and effectively

    Satisfactory resolution often leads to rise in

    customer perception of service qualityhigher

    supplier loyaltyzero defections

    PGDMII2013

    -15

    ROQ

  • 8/11/2019 B2B Merged

    187/276

    Basic assumptions (Rust, Zahorik & Keiningham, 1995) Quality is an investment

    Quality efforts must be financially accountable

    It is possible to spend too much on quality

    Not all expenditures are equally valid

    Expenditure on service qualitydiminishing

    returns

    Managers - Where? How much? When to

    reduce/stop?

    PGDMII2013

    -15

    PGDMII2013-15

    Improvement

    Effort

  • 8/11/2019 B2B Merged

    188/276

    5

    Customer

    Retention

    Cost Reduction

    WOM

    Revenues &

    Market Share

    Service Quality

    Improvement

    Profitability

    Attraction of New

    Customers

    Perceived Service

    Quality & Customer

    Satisfaction

  • 8/11/2019 B2B Merged

    189/276

    MARKETINGBUSINESSSERVICES

  • 8/11/2019 B2B Merged

    190/276

    Segmentation Narrowerservices are expected to be more

    customised

    Focus on what customers expect rather than need

    Adjusting service capacity effectively

    Total demand is made up of numerous smaller, yet

    predictable, demand patterns

    PGDMII2013-15

    SERVICEPACKAGES

  • 8/11/2019 B2B Merged

    191/276

    Product equivalent of service Concept of the service

    Range of services provided

    Quality and level of service

    Personnel

    Physical product accompanying the service, if any

    Service delivery process

    Conceptualising the packagebased on benefits

    PGDMII2013-15

    CONCEPTUALISINGTHESERVICEPRODUCTPGDMII2013Level 1

    What benefits

    t k

    Customer-benefit

    C t

  • 8/11/2019 B2B Merged

    192/276

    3-15

    Level 1

    Level 2

    Level 3

    Level 4

    Based on guidelines built

    in service offerpeople,

    processes, facilities, etc.

    Service-delivery

    System

    More detailed shaping of service concept.

    Decisions on & clarification of:

    service elements (tangible and intangible)

    service forms (in what way, how)

    service levels (quantity & quality)

    Service Offer

    Service

    Concept

    What general benefits the

    service firm will offer

    customers seekConcept

  • 8/11/2019 B2B Merged

    193/276

    PGDMII2013-15

    PRICING

    Can be used to manage the timing of demand and

  • 8/11/2019 B2B Merged

    194/276

    Can be used to manage the timing of demand and

    align with capacity Power utilities (off-peak hours), resorts & hotels

    (conferences)

    Isolate service profitability

    Low marginal cost Cost-to-serve?

    Bundling

    Pure or mixed

    PGDMII2013-15

    PROMOTION

  • 8/11/2019 B2B Merged

    195/276

    Tangible cues Physical evidences

    Service guarantees

    Performance documentation

    Training and certification of personnel

    Corporate brand

    Trade journals

    PGDMII2013-15

    PGDMII20

  • 8/11/2019 B2B Merged

    196/276

    013

    -15

  • 8/11/2019 B2B Merged

    197/276

    PGDMII2013-15

    DISTRIBUTION

  • 8/11/2019 B2B Merged

    198/276

    Direct Channel members

    Internet

    PGDMII2013-15

    NEWSERVICEDEVELOPMENT

  • 8/11/2019 B2B Merged

    199/276

    New offerings that make best use of suppliercapabilities are matched with customers needs

    Possibilities

    Improved service experiencesthrough the use of

    new resources

    Customised expert servicesfitting firm capabilities

    to specific customer needs

    Planned pioneering servicesdeveloping a new

    service around firm capabilities in a new context

    PGDMII2013-15

  • 8/11/2019 B2B Merged

    200/276

    THANKYOU!!

    PGDMII20

    13-15

  • 8/11/2019 B2B Merged

    201/276

    B2B Marketing

    Module 8

    Channel Management

    E-commerce

    Channel Management

    Set of interdependent organisations involved in the processf ki d t i il bl f

  • 8/11/2019 B2B Merged

    202/276

    PGDM II 2013-15

    of making a product or service available for use orconsumption (Coughlin et al., 2006)

    The central question

    Which channel task will be performed by the firm, and which, if

    any, will be performed by channel members?

    Tasks

    Reducing complexity

    Increasing value Transaction efficiency

    Quality of service

    Marketing Channels

    Manufacturer

  • 8/11/2019 B2B Merged

    203/276

    PGDM II 2013-15

    Direct

    Channels

    Indirect

    Channels

    Agents

    Distributors

    TelemarketingOnlineMarketing

    Direct Sales

    Customer Segments

    Direct Channels

    Feasible when

  • 8/11/2019 B2B Merged

    204/276

    PGDM II 2013-15

    Customers are large, well-defined Customers insist on direct sales

    Sales involve extensive negotiations with customer senior

    management

    Control on sales to ensure complete package is properlyimplemented

    Requirements

    Highly customized solutions - complex

    Selling skill, professional account management, in-depth productknowledge

    Indirect Channels

    Found when

  • 8/11/2019 B2B Merged

    205/276

    PGDM II 2013-15

    Markets fragmented and dispersed Transaction amounts low

    Buyers typically purchase number of items in one

    transaction, often of various brands

    Distributors

    Key organisational customers of manufacturers

  • 8/11/2019 B2B Merged

    206/276

    PGDM II 2013-15

    purchase and hold stock Absorb financial, credit, selling and logistic risks

    Source of market information and demand knowledge

    Suitable for firms having multi-locational manufacturing

    Service focus

    Automatic replenishment

    Product assembly

    In-plant stores

    Help in designing and operating supply networks

    Classification

    General line

  • 8/11/2019 B2B Merged

    207/276

    PGDM II 2013-15

    Broad array of industrial products Specialists

    One product category or industry

    Combination house

    Operates in business and consumer markets

    Agents

    Do not take title and/or inventory of goods

  • 8/11/2019 B2B Merged

    208/276

    PGDM II 2013-15

    Work independently, represent several non-competingcompanies

    On commission basis

    Augment / replace the field sales force

    Expert product knowledge coupled with understanding of

    market and customer needs

    When to use:

    Small firms, and large

    Limited market potential

    Servicing distributors

    Offerings-based Channels

    Bespoke/complex

  • 8/11/2019 B2B Merged

    209/276

    PGDM II 2013-15

    Direct channel Agentsfor entering new unfamiliar geographies

    Uniform

    Lower inclination to control all exchanges with end-customer

    More fragmented and geographically dispersed customer base Distributorsfor products

    Franchiseesfor services

    Channel Design

    Driven by customers

  • 8/11/2019 B2B Merged

    210/276

    PGDM II 2013-15

    Dynamic processdepending on customer and competitorbehaviour changes

    Customer

    Service Financing

    Guarantee

    Size

    Customisation

    Information

    AssortmentInstallation

    Channel PartnerChannel Partner

    Manufacturer

    Structure Issues

    Length

  • 8/11/2019 B2B Merged

    211/276

    PGDM II 2013-15

    Optimum number of levels to serve the customer Established vs. new

    Breadth

    Intensityintensive / selective / exclusive

    Multiple channels Inter-firm conflict

    Inter-channel conflict

    Cannibalisation

    Channel Administration

    Recruitment

  • 8/11/2019 B2B Merged

    212/276

    PGDM II 2013-15

    Motivation Support to the channel

    Conflict management

    Recruitment Criteria

    Financial & Company strengths

    Ability to fund

    Product

    Familiarity

  • 8/11/2019 B2B Merged

    213/276

    PGDM II 2013-15

    sales start-up

    communications activities Maintain inventory

    Standing amongst customers

    Management team quality

    y

    Product lines

    Complimentarity

    Sophistication

    Physical facilities

    Marketing skills

    Market share

    Geographic coverage

    Experience with target customers

    Salesforce

    Delivery performance

    Customer service

    Trade-show participation

    Trade association membership

    Commitment

    Product mix volatility

    % business with single supplier Commitment to targets

    Willingness to

    maintain stock

    invest in communication

    invest in sales training

    drop competing product lines

    Facilitators

    Contacts with key industry players

    Experience and performance with other suppliers

    Channel Performance

    Delayed differentiation

  • 8/11/2019 B2B Merged

    214/276

    PGDM II 2013-15

    VARs Outsourcing of non-value adding activities

    MRO

    3PL

    Evaluation of Performance

    Criterion Factors to consider

  • 8/11/2019 B2B Merged

    215/276

    PGDM II 2013-15

    Contribution Supplier profitabilitySales growth

    Competence Experience

    Product knowledge

    Administrative and supervisory skills

    Strategic thinking of senior managementLoyalty Commitment & motivation towards supplier

    Compliance Acceptance of channel policies & programmes

    Adaptability Innovation in handling supplier products

    Customer satisfaction Level of servicesService quality

    Support to Channel

    Incentives

    Financial commission discounts

  • 8/11/2019 B2B Merged

    216/276

    PGDM II 2013-15

    Financialcommission, discounts

    Bonuses

    Territorial exclusivity

    Providing resources

    Involvement of sales team in dealing with clients

    Sharing of MR information

    Marketing communications

    Training of staff

    Working relationship approach in dealing

    Joint strategic planning

    Signalling of long-term commitment

    Channel Conflicts

    Conflict one channel member perceives anothers

    http://ads.forbes.com/RealMedia/ads/click_lx.ads/forbes.com/specialslot/innovative-companies-11/forbes.com/technology/339148193/StoryLogo/OasDefault_v5/default/empty.gif/64644e63576c4365472f494143473162
  • 8/11/2019 B2B Merged

    217/276

    PGDM II 2013-15

    Conflictone channel member perceives another s

    actions to be impeding the achievement of its goals (Gaski,1984)

    Types

    Goal

    Means

    Fear of being bypassed

    Conflicting perceptions

    Conflict Management

    Informal mechanisms

  • 8/11/2019 B2B Merged

    218/276

    PGDM II 2013-15

    Exit Voice

    Loyalty

    Aggression

    Neglect Formal mechanisms

    Distributor council

    Third-party referee

    Trade association interaction Personnel exchange

  • 8/11/2019 B2B Merged

    219/276

    E-commerce

    PGDM II 2013-15

    Types

    Inter-organisational: management of

    Suppliers

  • 8/11/2019 B2B Merged

    220/276

    PGDM II 2013-15

    Suppliers

    Inventory

    Distribution

    Channel

    Payment

    Intra-organisational Workgroup communications

    Electronic publishing

    Sales force productivity

    B2M: Companies linking to machines via Internet

    B2C

    Channel Considerations

    Channel efficiencies

  • 8/11/2019 B2B Merged

    221/276

    PGDM II 2013-15

    Automation of back-office sales functions Personnel and accuracy enhancements

    Current marketing intermediaries

    Disintermediation

    Re-intermediation Channel advantages for potential buyers

    Customise contact as per buyers needs

    Wide range of referral sources

    Always open

  • 8/11/2019 B2B Merged

    222/276

    PGDM II 2013-15

    Effect of Internet on Marketing Variables

    Pricing

  • 8/11/2019 B2B Merged

    223/276

    PGDM II 2013-15

    Buyers bargaining power

    Geographical advantages

    Commodificationservice-enrichment / branding

    Sales force

    Complimentarityfocus on problem-solving & relationship-building

    Customise product presentations

    Incentivise online initiatives

    Promotion Search-engine marketing

  • 8/11/2019 B2B Merged

    224/276

    Thank You!!

    PGDM II 2013-15

  • 8/11/2019 B2B Merged

    225/276

  • 8/11/2019 B2B Merged

    226/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    227/276

    PGDM II 2014-15

    Rank Brand Value ($ billion) Sales ($ billion)

  • 8/11/2019 B2B Merged

    228/276

    PGDM II 2014-15

    1 Coca-Cola 77.8 48.022 Apple 76.6 164.7

    3 IBM 75.5 104.5

    4 Google 69.7 50.2

    5 Microsoft 57.9 72.96 GE 43.7 147.4

    7 McDonald's 40.1 27.6

    8 Intel 39.4 53.3

    9 Samsung 32.9 187.810 Toyota 30.3 224.5

  • 8/11/2019 B2B Merged

    229/276

    (Kapferer, 2008)

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    230/276

    Salience

    Resonance

    FeelingsJudgments

    ImageryPerformance

    PGDM II 2014-15

    4. Relationships :

  • 8/11/2019 B2B Merged

    231/276

    Partnership

    solutions

    Sales force

    relationshipsJudgments

    ReputationPerformance

    1. Identity: Who

    are you?

    2. Meaning:

    What are you?

    3. Response: What

    about you?

    4. Relationships :

    What about you and

    me?

    PGDM II 2014-15

    Salience

    Construct Description Concern

  • 8/11/2019 B2B Merged

    232/276

    PGDM II 2014-15

    Corporate Identity The central, enduring,and distinctivecharacteristics

    Who we are?

    Corporate Brand The promise made What we do? Whatmakes us important

    and/or different?Corporate Image The beliefs and

    impressions heldWhat people thinkabout us?

    Corporate Reputation The esteem in whichthe firm is held

    Are we good/bad,admired and respected,better/worse than ourcompetitors?

  • 8/11/2019 B2B Merged

    233/276

    BrandRelationship

    Branded House

    House ofBrands

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    234/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    235/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    236/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    237/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    238/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    239/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    240/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    241/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    242/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    243/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    244/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    245/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    246/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    247/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    248/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    249/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    250/276

    PGDM II 2014-15

    Buy phase Objective Task

    Need recognition Generate Prospecting

    Low High

  • 8/11/2019 B2B Merged

    251/276

    Need recognition Generateawareness

    Prospecting

    Developing

    product spec

    Feature

    comprehension

    Opening

    relationship

    Search & qualify

    suppliers

    Lead generation Qualifying

    prospect

    Evaluation Performance

    comprehension

    Presenting sales

    message

    Selection Negotiation Closing sale

    Purchase

    feedback

    Reassurance Account servicing

    PGDM II 2014-15

    Advertising Trade

    shows

    Personal

    selling

  • 8/11/2019 B2B Merged

    252/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    253/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    254/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    255/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    256/276

    PGDM II 2014-15

    Information on

  • 8/11/2019 B2B Merged

    257/276

    PGDM II 2014-15

    Customers &Prospects

    Name / Contactdetails

    Company size /Activities /

    Purchase process

    Key decisionmakers &

    influencers

    Transactions

    Frequency /Timescale

    Amount

    Productcategories

    Promotions

    Campaignsexposed

    Resultsleads /sales

    ProductsIndustry / Market /

    Geography

  • 8/11/2019 B2B Merged

    258/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    259/276

    Product

    Logistics

    AdaptationAdvice

    Service

    PGDM II 2014-15

    Intrinsic value

    buyers

    Extrinsic value

    buyers

    Strategic value buyers

  • 8/11/2019 B2B Merged

    260/276

    buyers buyers

    Straight rebuy Product Product /

    services

    Modifiedrebuy Product Product /services /

    logistics

    Logistics / adaptation /advice

    New task Logistics Logistics / adaptation /

    advice

    Selling mode Transactional Consultative Enterprise

    PGDM II 2014-15

    Mi i

  • 8/11/2019 B2B Merged

    261/276

    PGDM II 2014-15

    Missionary

    Frontline

    Internal

  • 8/11/2019 B2B Merged

    262/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    263/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    264/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    265/276

    PGDM II 2014-15

    Experience

    Commitment

    High

  • 8/11/2019 B2B Merged

    266/276

    PGDM II 2014-15

    Commitment

    Adaptation

    Distance

    Uncertainty

    Time

    Low

    Pre-relationship

    Early

    Development

    Long-term

    Final

  • 8/11/2019 B2B Merged

    267/276

    PGDM II 2014-15

    (Millman & Wilson 1995)

  • 8/11/2019 B2B Merged

    268/276

    PGDM II 2014-15

    (Millman & Wilson, 1995)

  • 8/11/2019 B2B Merged

    269/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    270/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    271/276

    PGDM II 2014-15

    92Volume of potential business

  • 8/11/2019 B2B Merged

    272/276

    PGDM II 2014-15

    29

    48

    55

    61

    78

    Management discretion

    Industry of customers

    Size of customer

    Comeptitor's actions

    Volume of past sales

    0 20 40 60 80 100

  • 8/11/2019 B2B Merged

    273/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    274/276

  • 8/11/2019 B2B Merged

    275/276

    PGDM II 2014-15

  • 8/11/2019 B2B Merged

    276/276