Chapter One A Business Marketing Perspective

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Challenges of business marketers

1. Understanding deep customer needs in new ways. 2. Identifying new opportunities for organic business growth. 3. Improving value management techniques and tools. 4. Calculating better marketing performance and accountability metrics. 5. Competing and growing in global markets, particularly China. 6. Countering the threat of product and service commoditization by bringing innovative offerings to market faster, and moving to more competitive business models. 7. Convincing c-level executives to embrace the marketing concept and support robust marketing programs.

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Business problems
I would like to share a problem I am facing nowadays I have recently joined a company manufacturing Plastic Products. From Last two years they have been working on a plastic bobbin. The Bobbin is basically designed for dyeing yarn, and this bobbin has to bear a temperature of 150 degree c and have to bear a weight and sudden fatigue of other bobbin weighing 6 to 7 kgs. The process is that thread is first wounded over at this bobbin. Then this bobbin is dipped in a dye having a temperature of more than 150 degree centigrade. Then this bobbin is placed on a shaft at this stage bobbin has at least 7 kilos of weight. Similar bobbin is when stacked on this bobbin the bobbin starts cracking from its base. I have tried polyacetal, nylon ABS and Nylon but all vent in vain
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Business Markets
Markets for products and services
Local to international Bought by Businesses Government bodies Institutions For consumption (process material, office supplies, consulting services) For use ( installations or equipments) For resale What differentiates business marketing from consumer marketing? Intended use of products and intended consumer.

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B2B versus B2C Marketing

Characteristic Sales volume Purchase volume Number of buyers Size of individual buyers Location of buyers Buyer-seller relationship Nature of channel Buying influences Type of negotiations Use of reciprocity Use of leasing Key promotion method Developed by Cool Pictures and MultiMedia Presentations B2B Market Greater Greater Fewer Larger Concentrated Closer More direct Multiple More complex Yes Greater Personal Selling B2C Market Smaller Smaller Many Smaller Diffuse More Impersonal Less direct Single/Multiple Simpler No Less
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Advertising

Figure 1.2

The Consumer Market (B2C) and the Business Market (B2B) at Dell, Inc.
Dell, Inc.

B2C

B2B

Customers

Individuals & Households

Businesses Global Large corporations Small & Medium sized businesses

Institutions Healthcare Education

Government Federal State Local

Selected Products

PCs Printers Consumer Electronics Simple Service Agreements

PCs Enterprise Storage Servers Complex Service Offerings

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A Market Driven Firm

Has: Market sensing capabilitycompanys ability to sense change and to anticipate customer responses Customer linkingthe ability to develop and manage close customer relationships

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Marketings Cross Functional Relationship

Business marketing planning must be coordinated and synchronized with corresponding planning efforts.
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Business Market Characteristics

Derived demand Fluctuating demand Stimulating demand Price sensitivity/demand elasticity Global Market perspective

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Relationship Marketing
All marketing activities directed toward establishing, developing, and maintaining successful exchanges with customers

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The Supply Chain

Michael Porter and Victor Millar observed that to gain competitive advantage over its rivals, a company must either perform these activities at a lower cost or perform them in a way that leads to differentiation and a premium (more value).
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Business Market Customer Commercial Enterprises

Three categories: Users OEMs Dealers and distributors

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OEMs

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Market size and estimation

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Impact

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Impact

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Classifying Goods for the Business Market

Classifying industrial goods by the following questions: How does the good or service enter the production process? How does it enter the cost structure of the firm?
Source: Adapted from Philip Kotler, Marketing Management: Analysis, Planning, and Control, 4th ed. (Englewood Cliffs, N.J.: Prentice-Hall, 1980), p. 172, with permission of PrenticeHall, Inc.

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A Framework for Business Marketing Management

Business marketing strategy is formulated within the boundaries established by the corporate mission and objectives.

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Financial return on marketing investment

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Innovation vs. commoditization

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Discussion
Dell Computer has excelled with a fast-paced build-to-order approach that involves taking customer orders online, orchestrating production tailored to each customer, and forging a one-to-one relationship with the customer after the sale. Some auto industry executives have turned to Michael Dell, the company founder, for advice concerning how to make their businesses look like his. Senior executives at Ford, for example, envision a future where customers will order online and factories will build to order, eliminating billions of dollars of inventory costs (for example, large stocks of vehicles on hand). All of those mass produced cars sitting for weeks on dealer lots represent a massive investment that yields no return until a buyer comes along. a. Evaluate the feasibility of a build-to-order system for an automaker like Ford and outline the key requirements that Ford must meet to make the strategy work for a potential customer like you. b.How would a build-to-order system alter the way in which suppliers (business marketers) would serve Ford as a customer?
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Discussion
Consider some leading-edge consumer product manufacturers like Procter & Gamble, Gillette, or Coca Cola. What major differences would you expect to find in comparing the marketing strategy patterns employed by these consumer-products companies to those of leading business marketing firms such as Intel, 3M, or Dow Chemical? Next, describe the similarities and differences that emerge when comparing the distinctive attributes of a leading-edge consumer products marketer to a firm that demonstrates superb skills serving customers in the business market.

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Copyright 2007 by South-Western, a division of Thomson Learning, Inc. All rights reserved.