A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available

for use or consumption. B2B Marketing Channels

Sales cycle
Lead Generation

Lead Qualification Bid and Proposal Negotiations and Sales Closure Fulfillment Customer Care and Support

Disributor responsibilities Responsibility Contact Activity Reach all customers in a defined territory through an outside sales force that calls on customers or through an inside group that receives telephone orders Provide a local inventory and include all supporting activities: credit, JIT delivery, order processing, and advice Provide easy access to local repair facilities (unavailable from a distant manufacturer) Purchase material in bulk, then shape, form, or assemble to user requirements

Product availability

Repair

Assembly and light manufacturing

Reps are salespeople who work independently (or for a rep company), represent several companies in the same geographic area, and sell noncompeting but complementary products. Channel design is the dynamic process of developing new channels where none existed and modifying existing channels.

Advertisings Role Integrated Communication Programs Enhancing Sales Effectiveness Increased Sales Efficiency Creating Awareness Interactive Marketing Communications

The Decision Stages: Developing Business-to-Business Advertising Program

To be successful in the B2B space, companies need to be at a different level of cost competitiveness. even if their costs go up, there is only so much scope to pass it on their consumers, the businesses. That is because the businesses ability to pass on the input cost to the actual consumer on the street, too, is restricted. If nothing else, moving to a B2C model can afford a producer some respite from the squeezing margins in the B2B space. In a B2B model, one needs to deliver a tangible economic value to the consumers. In a B2C model, the product game is completely different. You need to give the consumer what he wants, when he wants and where he wants, all at the price he wants it at. You need to continue evolving to changing needs, constantly communicate to the consumer, and above all, establish a brand which embodies your proposition. The B2C business is a ready stock business. Products must be placed in advance in locations where demand is anticipated in the right quantity and for a fragmented demand base. The product complexity, in terms of stock keeping units (SKUs) mix and location mix, present a challenge B2B - The institutional business is usually a bill-to-order business. The process of getting the product in place begins only once the order is placed. There isnt much need for forecasting. Also, the locational mix isnt as widespread as that for the consumer business since industries tend to operate in clusters. Plus, the order quantum makes up for any out-of-regular-reach kind of delivery. In B2C business, one can take the partnering approachretain the core business in-house and possibly outsource some of the processes. In B2B, sub-contracting makes the whole model less efficient. Dual focus Many B2B players have found the space restricted beyond a point. The arena is much larger in pure volumes terms when one considers the consumer B2C end. Take Ingersoll Rands Trane, for instance. There is only so much one can grow in a B2B market. The residential market is much bigger than the commercial one. It makes sense to leverage our knowledge to enter that segment, While prospects are big, challenges are bigger. Same product wont work everywhere, the company spends on researching the market, understanding consumer usage patterns, crafting the product and then launching it. biggest worry now is to get the SKU mix right. Ketchups as a category has various SKUs from big glass bottles to mid-sized squeezies to sachets. Another foods category player, Canadian company McCain Foods, which operates largely in the frozen foods segment, with its marquee product being french fries, supplies to restaurants and QSR chains and is now available for in-home consumption. The key challenge that these brands are contending with, irrespective of the sectors they operate in, is building a consumer base. Ingredient branding can be a good idea, something

that Intel has done successfully. But that only doubles the pressure on the manufacturerto stay consistent and not compromise on the quality. Moving from B2B to B2C Building a consumer brand is the ultimate high for most of the businesses and almost all of them strive to create a consumer brand. The benefits are definitely worth the effort. It is also a reality that not many businesses are able to make the transition. The reason lies in the basic nature of the businesses. The seven major differences are: Direct connect with the customer: Contrary to the belief, a B2B business is far more in direct touch with its customers as compared to a B2C business. Every single business customer is a relationship and is to be built and nurtured extremely carefully. While in case of B2C businesses, the companys relationship with the consumer is through the brand that is distributed through a layered channel and most of the communication with the consumer is through mass media. Size and scale of the transaction: In the case of a B2B businesses, depending on the nature of the product, the size of each transaction is much larger than a consumer product. Also, the lifetime value of a business customer is far bigger than most consumer products. Hence, the way in which a B2B company treats its customers and the investment it makes in each of them are very different from a B2C business. Mutual dependence with customers: B2B businesses enjoy a sort of mutual dependence with the customers wherein customers are as much dependent on them as much they are. For example be it a technology supplier or a raw material supplier, the relationship is more balanced than say in the case of a consumer business wherein the consumer takes an impulsive call every single time of purchase. And this decision can be influenced by many factors that are not in control of the brand managers. Service element: The service element plays a much larger role in a B2B business even if it might be a commodity raw material supplier. The customer business is dependent on the services offered by the supplier while in case of B2C it has far less impact and the role of other channel partners like retailer is far more visible than the brands own. Channel of distribution: In most of the B2B businesses, the channel of distribution is flat, and at most there is a stockiest or an agent that facilitates the business between two companies. In B2C, there is a layered distribution channel and will have at least 2/3 (wholesaler/distributor/retailer) intermediaries between the company and consumer. This close working relationship between demand and supply end of the business is missing in B2C businesses and can be hard to comprehend and deal with by B2B companies transiting to B2C side. Inventory and stockholding: B2B moves inventory fairly efficiently from its warehouse to customer with limited chance of stocking in between, and has full visibility from both ends of the supply chain. In contrast, B2C supply chains are extremely long and opaque with numerous stocking points in between. A B2B business manager can feel overwhelmed with

this ambiguity. On the other hand, a B2C manager will feel too exposed with such transparent chain of B2B.

Product Policy Product policy involves the set of all decisions concerning the products and services that a company offers in an attempt to satisfy customer needs and to build a sustainable competitive advantage by capitalizing on its core competencies. Core productsthe tangible link between core competencies and end productsare the components or subassemblies that significantly contribute to the value of end products. e.g.,

4 Dimensions of a Market Definition

Steps in Product Positioning Process

A brand, is a distinctive identity that represents an enduring and credible promise of value associated with a particular product, service, or organization. "Brand equity is a set of brand assets and liabilities linked to a brand, its name, and symbol that add to or subtract from the value provided by a product or service to a firm and/or to that firm's customers.

The typical RFQ scenario follows 8 basic steps (1) write specifications (2) Identify suppliers (3) qualify suppliers (4) mail RFQs (5) wait for responses (6) Evaluate suppliers (7) Notify selected supplier (8) Negotiate final terms and conditions.