The Project Entitled

AN IMPACT OF RELATIONSHIP MARKETING IN B2B MARKETS

is Submitted to

ICFAI National College

For The Subject Marketing Management - I (Sem I)

Submitted By

Rajat Patel Kunj Barot Priyank Patel Pavan Patel

Guided By

Shri Mohit Parekh

Vadodara 390 007 www.incindia.org

CERTIFICATE
This is to certify that the Live Project Report entitled AN IMPACT OF RELATIONSHIP MARKETING IN B2B MARKETS is prepared and submitted by the following students in the partial fulfilment for the subject Marketing Management - I (Sem I) of ICFAI National College Vadodara.

Name 1. Rajat Patel 2. Kunj Barot 3. Priyank Patel 4. Pavan Patel

Enrolment No. 8NBVD004 8NBVD018 8NBVD031 8NBVD128

This is a record of their own work carried out under our supervision and guidance. The matter embodied in the report, to the best of my knowledge, has not been submitted for the award of any degree of any institute or university.

Guide Shri Mohit Parekh Faculty for a subject Marketing Management - I

Center Head Shri U. B. Pandya ICFAI National College

Date: _____________

Acknowledgements

The live project plays an important role to adjust with & to get experience of corporate world, and this project is no different. We would like to acknowledge our guide, Mr. Mohit Parekh, for guiding us in various aspects of the project.

This project has taught us how to prepare questionnaire for the survey of our interest and how to interact with the corporate people for the same. And also the valuable comparison between theoretical knowledge of the subject & the practical aspects of the same.

We are indebted to all those corporate who took time out of their busy schedules to guide us and to help us in our survey.

We would like to thank Mr. Sanjeev Mehta, DGM, INEOS ABS (India) Limited and Mr. Snehal Joshi, Purchase Manager, Alembic Limited to provide us additional data.

Finally, we would like to thank our college, ICFAI National College Vadodara, to give us such a graceful opportunity which helps us to enrich our knowledge of Relationship Marketing and to understand the theoretical concept of the subject in a better manner.

Table of Contents

List of Tables, Figures, Exhibits, or Appendices ----------------- 5 Executive Summary ----------------------------------------------------- 6 Introduction ---------------------------------------------------------------- 7 Objective ------------------------------------------------------------------- 8 Secondary Literature Review ----------------------------------------- 9 Methodology -------------------------------------------------------------- 10 Limitations ---------------------------------------------------------------- 10 Analysis -------------------------------------------------------------------- 11 Recommendations ------------------------------------------------------ 17 Conclusion ---------------------------------------------------------------- 18 References --------------------------------------------------------------- 19 Appendices --------------------------------------------------------------- 20

List Of Charts, Tables and Appendices

Charts

Realization of Payment ( Turn over Basis ) ------------------------------------- 12 Realization of Payment ( Type of Ownership ) --------------------------------- 13

Tables

Ranks of Factors ---------------------------------------------------------------------- 14

Appendices ------------------------------------------------------------------------------ 20

Executive Summary
We have done a live project on An impact of relationship marketing in B2B market as an objective of our live project. We have gone through certain secondary literature review like Marketing Management by Philip Kotler to give proper direction to our live project.

We have done a survey with methodology of stratified random sampling with 25 sample size.

This live project has certain limitations like time constraint and small sample size. It is really difficult to come to a fair conclusion with such kind of limitations. Even though with these kind of limitations we have tried to analyse our data in such a way that we can come close to a concrete conclusion to establish relationship in B2B market.

From all such analysis we have given some recommendations in order to establish relationship in organization in such a manner that can be further useful to the organization for their progress.

We have given references from which we have gone through in order to accomplish our live project successfully.

At last we have enclosed our questionnaire for the kind reference of readers.

Introduction
In a present scenario of such competitive market where to just sustain become harder day by day, Relationship Marketing plays significant role in business functions. Relationship marketing refers to understanding and responding to customer needs and preferences to build more meaningful and long term connections with customers. Attracting new customers are of no use unless you know the art of keeping them and from here the role of relationship marketing starts.

The goal of relationship marketing is to satisfy customer in such a manner that he becomes loyal to the company and is unlikely to switch to the competitors.

Relationship is just like chemistry bonding between the atoms but here atoms are humans (Supplier Consumer).

As relationship marketing is growing rapidly with respect to B2B market, it is necessary to study the impact of the same.

Objective
As the title suggest the principle objective of this live project is to study the Impact of Relationship Marketing in B2B Markets. There are several other secondary objectives as a by-product of the principle objective, they are:

How to do a live project with a team in a systematic manner and how to make that team to work in a same direction to achieve a target of completing the live project in limited period of time.

How to do a survey to achieve better results and compare those findings with the theoretical aspects. By that way we can increase our understanding of the subject.

The last but not the least is how to use knowledge of various subjects to have better results and conclusions.

Secondary Literature Review

To do our live project in a better manner we have reviewed some secondary literature, those are mention below.

A thesis on Relationship Marketing Strategy by Patricia Sorce, Ph.D.,

Professor, College of Business Rochester Institute of Technology.

Putting the Relationship Back in Relationship Marketing by Andy

Hasselwander, Vice President, MarketBridge and by Laird Rawsthorne, PhD, Associate, MarketBridge.

The relationship between buyer and a B2B e-marketplace, Cooperation

determinants in an electronic market context by Andrew Lancastre and Luis Filipe Lages.

Methodology
We have chosen 25 sample size and have made survey on basis of stratified random sampling. We have sub divided strata into further sub division like Sole Proprietorship, Partnership Firm, Private Limited Firm, Public Limited Firm. To do a survey we have prepared a questionnaire which is attached here with the appendices, in order to get better results. We have also used direct interviewing method with the company personnel of our interest, like Purchase Manager.

Limitations
In this given live project there are some obstacles in our path like time limit, sample size, and the initial response of corporate towards us. Less number of samples might not give a reasonable result and the time limit has bound us to visit more number of corporate and our informal approach (without appointment) towards them made our task more difficult.

10

Analysis
We have done our live project with 25 sample size and segmented it on the basis of company demographics like ownership types and turn over.

On The Basis Of Ownership Sole Proprietorship ------------------------ 7 samples. Partnership Firm --------------------------- 3 samples. Private Limited ------------------------------ 6 samples. Public Limited ------------------------------- 9 samples. On The Basis Of Turnover Turn over < 1 Crore ----------------------- 8 samples. 1 < Turn over < 100 Crore --------------- 7 samples. Turn over > 100 Crore -------------------- 8 samples. Other remaining 2 samples are of Taluka Panchayat in which one
cant get the data of turnover. As Realization of payment plays an important role in relationship marketing in B2B market, it is an important factor to study. The data which we got we found that aggregate of figures says that mid term is the best option out of the options given in question 3 (Refer Appendices).

11

From the above chart, it is clear that in all 3 segments, Mid Term (30-90 Days) payment is the option chosen by majority and also holds true with respect to all 25 samples (Aggregate).

12

From the above chart, it is clear that in almost all type of ownership firms Mid Term payment option is chosen by majority and it also holds true with respect to all 25 samples (Aggregate). Here we can say that Mid - Term payment option is in the favor of both supplier and purchaser because 30 90 days payments term is more acceptable because it is not affecting profit margin of the supplier and purchaser gets the time to verify the material and on that basis he can decide whether to make payment or not.
13

Ranks Of Factors
Lower Rate Better Quality Timely Delivery Supplier's Technical Competence 4 5 5 4 5 5 4 4 Supplier's Experience After Sales Service 6 6 6 6 4 6 6 4

Aggregate Sole Proprietorship Partnership Private Limited Public Limited Turnover < 1 1< Turnover < 100 Turnover > 100

3 2 2 3 3 2 2 3

1 1 1 1 1 1 1 1

2 3 3 2 2 3 3 2

5 4 4 5 6 4 5 6

As we can see from the above table that Better Quality is the most important factor for corporate and After Sales Service is the least important factor. On asking to the corporate what do you expect from the supplier after completion of supply ? Majority says information about different products and market condition. E.g., Alembic Ltd., While 2 out of 25 selected very abnormal option i.e., greeting cards, gifts on the occasions and those two are Taluka Panchayat. In order to make bonding of relationship more strengthen, prevailing supplier has to provide some additional services to the purchaser e.g., free delivery. In this survey we get both the answers, and it is obvious that relationship has two aspects in corporate one is under table relationship and other is healthy relationship in the sense of business ethics. (Refer Appendices Que. No.: 6)

14

There are 17 corporate organizations who are purchasing globally to meet their final requirement and they are not that harsh or unfriendly towards terms and conditions for their purchase from global supplier as compare to Indian supplier. We get the aggregate rating of 5.53 and 6.2 for global and Indian supplier respectively. (Refer Appendices Que. No.: 7 & 8) Here from above paragraph we come to know that they are not much strict towards their terms and conditions because when we have asked them, are you strict towards your terms and conditions ? They answered second option i.e., little bit (76%) , (Refer Appendices Que. No.: 9). All the purchasers believe in having more than one supplier. This may be due to reduce dependability on one supplier. But this is the factor which affecting relationship between purchaser and supplier by the way that relationship become weak to the some extent. (Refer Appendices Que. No.: 10) I From this survey we found that by the way of advertisement a virtual image of supplier created in purchasers mind with some expectation like he can be technically sound, good managerial operations. Corporate find their supplier by the way of internet surfing, magazines, through references of others, and other ways like trade fairs, yellow pages, etc we found results 84%, 72%, 40%, 40% respectively. (Refer Appendices Que. No.: 12) In most of the cases (96%), we found that corporate buying from both of the manufacturer and traders. But they mostly prefer manufacturer in order to reduce inconveniency like timely delivery, quality, and better rate. (Refer Appendices Que. No.: 13)

15

In case of supplier not sending material on time or not sending proper quality, 36% of corporate are charging penalty and rest 64% are not charging any kind of penalty. It is the advantage of relationship that makes the 64% of corporate not to charge any sort of penalty. (Refer Appendices Que. No.: 14) We got very straight forward answer that in all the business organizations decider playing most dominating role in purchase system because all the authority of purchase the commodities or services are with the decider. That means if any supplier has to maintain a relationship in an organization he has to maintain with decider. (Refer Appendices Que. No.: 15)

16

Recommendation
Personal relationship is also to be maintained to get the support and good coordination at the time of emergency so personal relation is also an important factor in the company to the extent it should not lead to corruption. In order to maintain healthy relationship between supplier and purchaser their should be some limitation or it should be up to certain extent so that smooth functioning of business take place at the both the end. They can use different combination of payment terms for the defensive relationship e.g., some percent of payment in advance and rest in Mid Term. By the way of advertisement purchaser should not make any virtual image of supplier because it is not practical thing and it is the first step to make bonding of relationship. They should look on the more technical competence of supplier in order to maintain positive relationship. They should charged penalty for better business practices and for better long business to business relationship.

17

Conclusion
In Sole Proprietorship or Partnership Firm personal relationship with the supplier is viable as compared to Private Limited and Public Limited Companies. Because in Sole Proprietorship or Partnership Firm, there are only 1 or 2 people plays the role of decider but in Private Limited and Public Limited Companies, there are members of board of director who plays the role of decider so there are more chances of disputes among them if one maintains any personal relationship with the supplier and gives order to that supplier, that can creates problem. Relationship in B2B market is based on main 6 parameters like quality, timely delivery, Rate, quantity, Suppliers experience, suppliers technical

competence, and after sales services respectively. As supplier meets all such criteria more strengthen the relationship between the supplier and purchaser. Mid term payment option is offered by both supplier and buyer in order to make healthy and positive relationship. Supplier has to keep the healthy relationship with the decider because decider has the final authority to decide from where to buy ? Whom to buy ? And how to buy?

18

References
Here we get good response from big corporate as well as Small Scale Units and Medium Enterprises. We also get some essential data from Dabhoi and Palej Taluka Panchayat. Other references are:

www.google.com www.wikipedia.com Marketing Management, Philip Kotler

19

Appendices
Questionnaire A Study on Impact of Relationship Marketing in B2B Market
1. By which way do you purchase?

Basic enquiry. Tender. From few selected suppliers of your interest.

2. Criteria for selecting a supplier.

Quality oriented. Quantity oriented. On basis of rate. Timely delivery. Suppliers experience. Suppliers technical competence. After sales service.
3. Realization of payment to supplier from your side.

Short term (15-30 Days) Mid term (30-90 Days) Long term (90-180 Days) Advance (Percentage of amount) Cash against delivery. Bank through.

20

4. If any new supplier (who has a good reference) offers you lesser price and you already have a reliable supplier, which one will you choose?

Old supplier.
Not sure.

New supplier (On trial basis).

5. After completion of supply, what do you expect from the supplier?

A regular interval calls for new products. Information about current market condition for different products. Greeting cards, gifts on the occasions.
6. Do you believe in personal relationship with your supplier?

Yes.
7. Do you purchase globally?

No.

Yes.
Unfriendly

No.

If yes then how is your approach towards international supplier? (with respect to terms & condition) (Give your rating) Friendly

10

8. How is your approach towards Indian supplier? (with respect to terms & condition) Unfriendly (Give your rating) Friendly

10

9. Are you strict in your terms & condition for the procurement of products?

Yes.

Little bit.

No.

21

10. Do you believe in one supplier OR to have diversified list of suppliers? (i.e. more no. of suppliers).

One supplier.

More no. of suppliers.

11. Give importance to the parameters listed below to judge the reliability of supplier. Least Important Most Important

10

Lower rate.------------------------------------------------- Better Quality.--------------------------------------------- Timely delivery.------------------------------------------- Suppliers technical competence.----------------------- Suppliers experience.------------------------------------ After sales service.----------------------------------------12. How do you find your supplier?

By internet. By magazine. By newspaper. By road-banners. Through firms (someones) reference. If any other way please mention it below.
13. From whom do you buy?

Manufacturer.
22

Traders.

Both.

14. Are you charging any penalty in case of late delivery or not receiving required quality goods?

Yes. Initiator
Buyer

No.

15. Who plays dominating role in your purchasing system? Influencer User Decider

Companys Demographic Profile

1. Type of Ownership:

Sole Proprietorship. Partnership. Privet Limited Co. Public Limited Co.

2. Type of Business:

Manufacturing. Service. Professionals.

3. Turnover: __________________________.

4. Location: __________________________.

23