final b2b report[1]

8/3/2019 FInal B2B Report[1]

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Business to Business Marketing Report

1. Introduction

As requested, please find herewith our Business-to-Business Marketing report which

addresses your marketing concerns.


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2. Marketing communication tools

In order to for CCS to continue growing effectively and resisting the economic

downturn, it needs to focus on a specific combination of communication tools. These

tools must allow it to retain current clients and service providers (for their outsourced

operations) as well as attract new clientele. Also, the tools must promote a

competitive advantage for CSS. Identifying these tools and justifying their

effectiveness is the topic of this section.

2.1. Communication mix

B2B communication tools can be differentiated into several types, which

together compose the communication mix. Please see figure 1 below.

Figure 1: A schematic depiction of the communication mix. Adapted from: (Fill, Ch. &

Fill, K. 2005; Brennan, R. Canning,L. and McDowell, R. 2011;)

With the exception of personal selling (which is covered in the following

question/answer), the other four tools will now be discussed in further detail.

2.2. Advertising

CCS relies predominantly on word-of-mouth promotion of their business and

this has served it well so far. However, in order to expand on clientele, CCS may

need to utilise a more structured marketing campaign. This should not be difficult to

accomplish as this is one of the services which CCS provides for its customers. A


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major factor of marketing is advertising choosing the form of media most suitable,

not only for CCSs budget but also for its target audience. The diagram below

summarises the major forms of advertising: broadcast, print, internet, outdoor, in-

store and tradeshows. Please see figure 2.2.1 below for a more in-depth breakdown

of these media types. (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. and

McDowell, R. 2011)

Figure 2.2.1: The media matrix. The inner ring contains the 6 primary media forms,

the middle ring breaks the form of media down to individual types and the outer ring

lists the effectiveness of the media, their relative/absolute cost and whether they are

being exploited by CCS.

As can be seen in the above media matrix, not all media forms are fully

exploited and not all are effective for reaching potential business clients.


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Recommendations will be given at the end of this section. (Fill, Ch. & Fill, K. 2005;

Brennan, R. Canning,L. and McDowell, R. 2011)

2.3. Sales promotion

Sales promotion works by offering the buyer perceived additional value, while in

fact reducing hesitation and increasing spending. This form of communication is

often used to increase rate of sales or alter potential buyer attitude. This may

generally be accomplished by rewarding current customers or encouraging potential

customers with special offers. For this, a pull strategy is employed, using various

tools, a selection of which is presented in table 1 below.

Recommendedtools

Advantage Disadvantage Recommendation

Price promotions/ price discounting

Offering advertisingpackages for longer terms (6or 12 months) at lower price engages client for longer,building trust and bond

Break-even point has tobe calculated very carefulto avoid generating loss

May negatively affect

brand reputation

Useful since it attracts newclients

Encouraging existing clientsto prolong the businessrelationship

However, has to be carefullyplanned

Coupons- couponbooks sent outin magazine or brochure,redeemable by customer- A cut-out coupon as partof an advert- On the back of theinvoice forexistingcustomers

If cleverly designed, willencourage further sale

May simply encouragecustomers to buy what theywould have bought anyway

The key objective is tomaximise the redemption rate(percentage of customersactually using the coupon)

Perhaps not the best tool forpotential business clients

The gift withpurchase

Good way of rewardingexisting customers Builds social bond and

trust

Difficult to give awaydesirableproducts/services withoutincurring loss

Useful if there is waste

product to be rid off, as longas its not viewed as tacky

More suitable for currentclients

Table 1: A discussion of sales promotion tools and their effectiveness for CCS

adopted from (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. and McDowell, R.

2011)

2.4. Public relations


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With respect to B2B communication, public relations have several roles:

Identify relevant publics/clients

Influence the opinion/perspective of the public by

o Highlighting and emphasising positive opinions

o Eliminating or decreasing negative opinions

o Creating positive opinion from otherwise neutral/oblivious public

CCS clearly has a decent public image since its had significant growth mainly

by word-of-mouth, even during the financial downturn. This is certainly an essential

aspect when attracting new clients most will seek reputable partners/service

providers. CCS could attempt to further improve public image, mainly by turning

neutral opinion to positive but this is more long-term. CCS has concerns for the

coming year attempting to improve on already good public relations would likely

just put it under unnecessary financial and time strain. (Fill, Ch. & Fill, K. 2005;


2.5. Direct marketing

The direct approach to marketing is an approach which essentially cuts out the

middle-man. Direct marketing is often employed as a strategic tool to reduce the

cost of marketing, improve its quality and design specific packages for respective

clients. Furthermore, in B2B, it is often used to assist personal selling and thus

lowering spending and increasing performance. Table 2 below discussed 3 forms of

direct marketing.

Type of direct marketing Explanation

Direct mail

Supports personal selling by building awareness,emplacing image and taking orders

May provide level of customer management

TelemarketingFacilitates customer enquiries, establishes leads, makes

appointments, collects low value orders and provides direct

sales channels

DatabaseThe collection of records from transaction undertaken with


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customers. May be used for subsequent analysis to improve

future marketing and generate sales forecasts.

Table 2: Various forms of telemarketing and the possibilities which they provide

adopted from (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. and McDowell, R.

2011)

CCS has a reputation for reliability and establishing long-term, secure

relationships with clients - telemarketing and direct mail may spoil this image.

Telemarketing is considered a severe annoyance by many and is not suitable for

attracting high profile customers. Direct mail is more feasible although it should be

performed in a subtle, personal manner. Hard working potential clients seldom have

time to read important mail so spamming their inbox with countless advertisements

would likely only cause irritation.

As for setting up a database, this is always a sensible idea but is more useful in

the long term.

2.6. Recommendations

CCS is concerned for its finances in the coming year but wants to attract new clients.

It also want to expand out of the immediate environment. Therefore, the most

relevant B2B communication tools for CCS are advertising and sales promotion:

Website should be expanded to allow small service sales, engaging clients

globally

Use of websites such as Facebook to gain much more word-of-mouth type

exposure is advised

Advertising in business magazines more actively may attract more high-profile

customers

Sales promotions should be offered to potential clients since everyone is

looking to save in the downturn and to current clients to maintain business

ties.


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Media services operation should increase to include on-line marketing

campaigns. This could also be outsourced to web-design companies. This will

attract a wide variety of customers.

A database should be installed and the service offered as a direct marketingservice.


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3. Personal selling

The following section of the report deals with the CCSs decision to implement

a dedicated sales team. There are several different formats which a sales team can

adopt and these are discussed herein. Subsequently, the most appropriate option for

CCS is identified. (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. and McDowell, R.

2011)

3.1. Personal selling structure

The decision to introduce a dedicated sales team in CCS is reasonable at the

moment, the Accounts team deals with client interaction and client packages but

they do not partake in more direct forms of selling. CCS wants this to change it

needs to attract new clients and stay competitive. Therefore, the structure of the

sales team must be decided and there are several ways this can be approached:

geographically, according to product or market/customer. (Fill, Ch. & Fill, K. 2005;


3.1.1. Geographically-based sales force

Perhaps the most common and straight forward method of organising a sales force

is to divide it according to geographical territories. Thereby, the sales person is

responsible for all activates necessary to sell all products to all potential customers in

their region. Please see figure 3.1 below for a schematic structure of a generic

geographical sales team. Subsequently, the strengths and weaknesses of such a

team are given in table 3. (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. andMcDowell, R. 2011 )


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Figure 3.1: A generic example of a geographical sales team structure

Strengths Weaknesses

Low cost

Highly responsive

Customer deal with only one persontherefore less risk of multiple and conflict

messages

Lack of specialised knowledge

Many products promoted by eachperson

Number of new customers is low

Salespeople under this structure tend tobe allowed greater freedom in designand execution of their working day

Table 3: The strengths and weaknesses of a geographical sales team

Although a geographically structured sales team is easy to organise and

relatively low cost, it lacks product expertise. Also, if client interest grows rapidly,

either more teams will need to be set-up - increasing cost - or the teams reach willneed to be increased weakening their capabilities. (Fill, Ch. & Fill, K. 2005;


3.2. Product based sales force

This type of structure has different sales teams for a particular line of

products. This structure is generally preferred by organisations providing

Sales Director

Greater LondonArea Sales Team

Internal sales

person

External sales

person

East and MidlandsArea Team

Internal sales

person

External sales

person


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products/services which require specialist knowledge and particular selling

techniques. Again, please see figure 3.2 and table 4 below.

Figure 3.2: The product-specific sales team structure


High level of product knowledge andtechnical experience

Helps improve source credibility andtrust

Control of allocation

More salespeople can be allocatedappropriately

Risk of duplicated efforts

Increased expenses due to necessarycoordination of teams

Table 4: The strengths and weaknesses of a product-specific sales team

A product-specific sales team has the greatest product expertise and this can be

used to reinforce reliability and good client relations. Such a team has the capacity to

tailor product packages to the clients needs. A high level of coordination is required

but this is not difficult in a relatively small company with a few, clearly defined

products such as CCS. (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. and

McDowell, R. 2011)

3.3. Market/customerbased sales force

Sales

Director

Advertising

Sales Team

Internal

sales personExternal

sales person

Marketing

Sales Team

Internal

sales personExternal

sales person

MediaServices Sales

Team

Inernal sales

person

External

sales person


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Structuring the sales team according to market or customer type tends to

complement the marketing concept. This structure has an increased popularity since

it allows the sale of varying products to different markets, reaching more customers.

Figure 3.3: An example of a market/customer-based sales team


Single type of customers

Greater understanding of customersneeds

Opportunity to force specialist sellingapproaches in different markets

The size of specialist sales team can bevaried by management according tointernal and external requirements

Product to client duplication

Highest coordination level required,incurring high cost

Table 5: The strengths and weaknesses associated with a market/client-based sales

team

A market/client-based sales team has the capability of reaching new clients

with relative ease. Also, it is has a great understanding of clients or the market in

which they deal. However, this structure compromises product expertise.

Furthermore, CCS deals with a vast variety of clients which deal in many different

markets respectively. There is a limit to how many markets or client types a small

Sales Director

Travel and

Sport Sales

Team

Internal sales

person

External sales

person

Furniture and

Garden Sales

Team

Internal sales

person

External sales

person

Entertainment

and Media

Sales Team

Internal sales

person

External salesperson


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sales team can successfully handle without jeopardising the quality of service

provided. (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. and McDowell, R. 2011)


There are strong advantages to each structure as well as apparent disadvantages

but the recommended structure is the product-specific because:

CCS has three main, well defined product lines

It is still small enough to easily co-ordinate

This structure forces product expertise, ensuring customer satisfaction.

The primary reason for choosing this structure is the expertise CCS competes by

providing a high level of customer satisfaction and the product-specific sales team

structure will reinforce this. It is essential that CCS maintains a reliable image with

existing clients in the current economic downturn. Also, by dividing the sales team

into the three product divisions, this allows 2 sales people to work in each. Thereby,

one can focus on internal sales while the other on external, thus still maintaining

opportunity to entice new clientele. Overall, the team only requires 7 membersincluding a sales director.

It is also recommended the separate sales departments meet regularly to

coordinate efforts and avoid treading on same ground unnecessarily. They should

also closely work with the Accounts team and their marketing operations.


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4. Relationships

The following section of the report deals with the subject of B2B relationships. This

covers the topics of relationship variables and networks. These topics are initially

defined and discussed from an academic perspective and then related to CCS.

4.1. Relationship variables

In most B2B exchanges, building and sustaining long-term relationships

serves as a key target for successful business activities. The importance of

relationships between B2B firms and their customers was stressed by Turnbull et al.

(1996). Ford et al. (2003) highlight that management of organisation relationships

among all business partners and its position in the business network have become

such a vital task that it may make or break a companys very existence.

There is a range of variables that can characterize a relationship and these are

discussed in more detail below. (Fill, Ch. & Fill, K. 2005; Brennan, R. Canning,L. and

McDowell, R. 2011)

4.1.1. Commitment

An implicit or explicit pledge of relational continuity between exchange partners

(Dwyer et al, 1987). This means both want to make short-term sacrifices to realize

long-term benefits in the relationship (Dwyer et al, 1987) as well as to invest

resources (assets, time and effort). Gundlach et al (1995) defined commitment as an

essential element of successful long-term relationships.

4.1.2. Trust

A central function in the management of risk - without trust, risk is unmanageable

and thus business relationship development would not be possible (Morrison and

Firmstone 2000). Trust develops progressively as a result of a gradual deepening ofrelationship through mutual adaptation to needs of the other party (Hogberg, 2002).


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Hogberg indicates that difficulties are also easier to solve if trust has developed.

4.1.3. Co-operation -

B2B partners/clients working together to achieve mutual and individual goals jointly.

Both parties behave in a manner that suggests they understand they must work

together to be successful (Anderson and Narus 1990). A high degree of co-operation

suggests behavior consistent with the bilateral power system in which the exchange

parties act to maintain the union as well as fulfill individual hedonic plan (Bonoma,

1976).

4.1.4. Mutual goals -

goals which collaborators share and desire to achieve simultaneously. Fontenot and

Wilson (1997) maintain that the more committed partners are to achieving mutual

goals, the better their relationship.

4.1.5. Adaptationinvestments in relation to process, product, or procedures specific to the needs or

capabilities of exchange partners. Adoptive behavior is defined so that it focuses on

the individual behavior specific to other party in relationship (American). This

includes investment that may be necessarily to close a particular transaction and

gradual adaptation that might occur over time (Hakansson, 1982).

4.1.6. Social Bonds -

a component of close, collaborative relationships with selected suppliers,

customers, and value-added retailers.(Baxter and Woodside, date) Theory

postulates that buyers and sellers with strong social bonds are more committed to

maintaining them than less bonded partners (Wilson, 1995). Research by Wilson and

Mummalaneni (1986) and Mummalaneni and Wilson (1991) supports this theory.

However, Han and Wilson (1993) found that social bonding did not contribute to

buyer-seller commitment in a relatively complex buying context.


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4.1.7. Performance satisfaction

4.1.8. Shared technology

(Bagdonien and ilion, 2009)

4.2. Relating relationship variables

All the above defined theories indicate that relationship variables are the backbone

of any successful organization. In the current economical climate where the

competition remains high, it is essential that CCS invests resources into building

relationships with clients and partners upon fundamental relationship variables as

illustrated on the below in figure 4.2.

Figure 4.2: The relationship matrix.

As can be seen in the above figure, customisation (Tong et al, 2008; Gill et al, 2006),

communication and shared values (Kang et al., 2005; MacMillan et al., 2005) are the

variables which support trust. These are the H1, H2 and H3 relationshipsrespectively. Commitment is supported by communication, shared values, and

H3

H5 H10

H9

H8

H7

H6

H4

H2

H1

Attractivenessof Alternatives

Commitment

Intent to staySatisfaction

Trust

Shared Values

Communication

Customisation


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attractiveness of alternatives as well as by trust. These are H5, H6, H7 and H4

respectively.

Satisfaction,an emotional state in response to an evaluation of their

consumption experiences by service customers (Chen et al, 2008), is a direct result

of favourable trust (Razzaque and Boon, 2003; Terawatanavong et al., 2007; Bejou

et al, 1998) and commitment (Johnson et al, 2008; Leung et al, 2005). These are

depicted by H8 and H9. Ultimately, client and partner satisfaction result in their intent

to stay in business with CCS.

4.3. Business Networks

There are four major B2B exchange relationships between buyer and seller: social,

financial, product/service and informational and they are all dyadic relationships. All

relationships are connected to the wider network within which they are embedded

(Granovetter, 1985). The network is the social environment in which CCS must work.

Networked relationships may enable the company to grow and develop or restrict

activities and constrain development (Ford, 2002; 29). As a modern

media/advertising agency, CCS works within a complex network involving internal

relationships, between agency staff, and external relationships with a variety of

agency partners including media, research and other marketing agencies, public

bodies etc. Collaboration through complex networks of social relationships has

become an important dynamic of client-agency relationships (Malefyt et al2003) and

dyadic client-agency relationships (c.f.: Mitchell, 1986; West and Paliwoda 1996).

CCSs network is depicted in figure 4.3b below.

A network brings together three important components, called by Hakansson

and Snehota (1995) the substance of relationship: the actors, resources and

activities. The way in which these interact is depicted in figure 4.3b below.


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Figure 4.3a: The ARA model, taken from Susiva (2006).

These three components are now discussed in further detail below.

4.3.1. Actors

The actors may be divided into internal and external, the former being the

people within the company and the latter the clients, partners and community (see

figure 4.3b above). The actors double up as decision makers, users of resources and

activity initiators, although they may be considered resources too. For example,

clients which market CCS by word-of-mouth are in essence marketing/promotional

resources.

4.3.2. Resources

Access to resources is a critical driver for CCSs networking activities. The

importance of business network as means of obtaining and mobilising resources is

the focus of the ARA model (Hakansson and Snehota, 1995). Intangible resources

are critical to CSS, both in terms of individual actors intangible resources and howthey add up to resources of the organisation as whole. This is a key component of


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the social network theory which focuses on accessing intangible resources from the

embedded social network (Adler and Kwon, 2002). For CCS, network is perceived to

be a more credible and cost efficient form of marketing, through word of mouth. This

is essential for their sustainability as it provides access to resources contained within

small firm networks (Dodd et al, 2002; Shaw, 2006).

4.3.3. Activities

In the B2B relationship context, activities are the actions which are performed

to support promotion, marketing and the prosperity of the network. They are carried

out by the actors and in turn they alter or transport resources (figure 4.3a).


In order to secure good position in the current economic downturn, CCS has to

continue to strive for customer satisfaction by actively engaging in perfecting B2B

relationship variables. Primarily, CCS should focus on further developing

commitment and trust with clients as well as outsourcing partners. CCS needs to

know it can rely on the custom from major clients in order to avoid losing them like

Robson Brown (Mintel, 2010). By improving on trust and commitment, CCS will

ensure satisfaction and client retention.

CCS currently has a strong position, even in spite of the economic downturn.

This has mainly been achieved by the word-of-mouth promotion. It has strong

relationships with clients and partners, such as Magenta Media Production Ltd.

These are exactly the type of relationships which CCS will need to develop and

maintain to expand operations, stay competitive and still have commitment and trust.

As was discussed earlier in the report, CCS will need to focus on other B2B

communication tools in order to expand its network. Those tools will enable CCS to

attract more actors who will introduce new activities and transfer further resources

into the network.


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As it expands, CCS will need to expand the PR and Accounts departments in

order to keep maintaining strong relationships with more and more clients/partners

and thus maintaining the expanding network.

Conclusion

To conclude, CCS is in a good position to tackle the economic downturn it has

strong B2B relationships within a trust-worthy and committed network. The

introduction of a product-based sales team and new communication tools such as

internet will help it expand on clientele, the network and maintain a reputation of

quality service and reliability. This will in turn enable it to successfully compete with

larger companies. As long as CCS continues to develop strong relationships with

new clients and maintain current ones, its position will likely remain solid in the near

future.

Total word count: 2938


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