ARTICLE

SUMMARY OF

BUSINESS-TO-BUSINESS MARKETING ON

Business-to-business marketing and globalization: two of a kind

BY: P. Matthyssens, A.H. Kirca & S. Pace

SOURCE: International Marketing Review (vol 25, 2008)

SUBMITTED BY: Manoj Kumar Singh 10327 - Sec B

Article summary: Now Business-to-business marketing is facing several challenges which force their companies to change market strategies which deviated due to the globlization of markets. In this article authors is saying about the various challenges which business-to-business marketing is facing. The first challenge is delocalization of their customers. Means due to the lower cost, multinationals have been moving their assembly and production units from high labor cost countries to low labor cost countries. So, industrial suppliers and subcontractors see that their home market is shrinking. Global customers require and want the same level of service and quality as in the home market. So, industrial marketers have to make some investments to guarantee for high customer service in abroad too. But in other side demand or market potential of the pulling global customers might be limited. The pulling global customers do not give the guarantee to order for a long period. This challenge is more for small and medium size enterprises which have limited resources. So, SMEs decide to focus on a niche markets or go with alliance partners to invest abroad. So, business market is becoming global market. The second challenge is the globalization of the purchasing function. Most MNCs coordinate and centralize their purchasing functions such a manner that local companies loose their purchasing mandates. MNCs purpose of these efforts to save the costs through economic of scale and enhance bargaining power. Due to this sales manager at the country level faces loss. Supplier has lack of scale and skill to respond a call at central level. A global customer is more knowledgeable about the cost efficient suppliers. Global companies mainly focus on their logistic and infrastructure. The third challenge is growing importance of global networks. In this add the value of their basic offering and suppliers taken the role of system supplier. Suppliers are more focus towards the customers service that is also a more profitable source. This service dominant logic comes due to the high integration of the suppliers and business customers. This trend poses additional challenge for the B2B marketers. Those are first, Supplier has less information about the customers insight. Second, supplier has global reputation of reliability; this image gives more focus on product rater than integration. The last or fourth challenge faced by B2B companies is the transition to electronic forms of exchange. Now, the internet is key factor or driver of supply chain management, marketing and all

things for a business. So, entry in the global market is easier with this current technology which is available to B2B companies. But it is challenging also because companies may loose their intellectual property on the web and B2B relationships are more difficult to manage in the electronic highway. Despite these challenges more and more B2B companies expand their operation internationally or globally. This article also tells us that how these challenges affect B2B relationship and international marketing. On the one hand, international business literature has been enriched by the business marketings network paradigm that is now generally accepted as one of the theoretical foundations of internationalization processes along with the theories of country specific factor advantages. And On the other hand, we believe that B2B marketing literature can also benefit from the developments in the international business literature since B2B marketing decisions in todays global business environment depend largely on the structure and configuration of MNCs. In this article is taken 6 papers which are also saying same challenges or giving strength on these challenges. So finaly B2B and IB go hand in hand and the actual challenges that business marketers encounter require critical revisions of core concepts and foundations of internationalization theories.