Business Markets: 1. Business Segments 2. Institutes 3.

Government
Buying Process: 1.Problem Recognition ! 2. General Description of Needs ! 3. Product or service
specifications !4. Supplier Search ! 5. Acquisition & Analysis of proposals !6. Evaluate & select supplier !7.
Selection of Order Routine!8. Performance Review
Buying Centre/ Decision Making Unit (DMU): 1. Initiators 2. Influencers (Professional Experts)3. Users (People
that uses system) 4. Buyers/Purchasers (Works with suppliers) 5. Decision Makers (CEO/Financial Controllers)
6. Gatekeepers (controls & has access to company)
Buying Situations/Classification: 1. New Task 2. Modified Rebuy 3. Straight Rebuy
Influences on Organisational Purchasing Decisions: 1. External (Socio-Economic, Globalisation, Increase cust
knowledge & power, emerging market, process & r/s orientations. 2. Internal (Nature of business, structure of
purchasing, purchasing policy, ethics, purchasing systems, purchasing technology) 3. Individual (Perception of
consequences, personal influences, social r/s 4. Relational (Relational approaches to inter-firm r/s, transactional
approaches to inter-firm r/s.
Multiple sourcing advantages: Avoid supplier dependence, bargain leverage, insurance against disrupted
supply, not limited to capacity of single supplier, access to more supplier data, stimulus to competition, greater
prompt to innovation. Single sourcing advantage: 1 r/s to manage, greater commitment, clearer responsibilities,
more leverage over suppliers, simplified monitoring, easier supplier training, cheaper tooling cost, simplified
scheduling.
Analytical Approach: 1. cust type? 2. What do they need, buying classification?(End 1)

R/s Competency: core

competencies are a set of
skills, systems & tech that
creates a unique value for
custs. Able to build strong,
lasting r/s that deliver
values
to
custs/stakeholders.
4 Core R/s Model !
Horizontal&Vertical R/s
Model:

Types of r/s: 1. Transactional Marketing 2. Value Added R/s 3. High end collaborative r/s

Types of r/s: 1. Prospect 2. Cust 3. Client 4. Supporter (Passive)5: Advocate (Active) 6. Member (loyal) 7. Partner
(Mutual)
Understanding R/s
Mix: 1. Transactional r/s
(customers) - Short
term or discrete, based
on information & specific
price, delivery product
details - Routine
products / services; high
price competition 2.
Selective competition Contact based, some
integration. custs have a
panel of suppliers Competitive products/
services for specialised
applications 3. Selective
partnership information &
resource
exchange, cocreation of value Products &
services
customised,
quality
requirements 4.
Strategic
partnership Network r/s, cross
functional
integration,
collaboration on
joint benefits Specialist
products & services; point of differentiation

Channel: group of independent org involved in process of producing & delivering products & services
& making them available for use/consumption. Supply Chain: runs from producers of raw materials
through to final cust. Channel management: includes those orgs who cooperate with each other to
achieve channel goals & add value.
Distribution Channel Task: 1.Reducing Complexity (Streamline no. of
Upstream)Suppliers)
exchange points, improve communications & r/s to improve efficiency)
2.Increase Value (Downstream channel members add value.) 3.Transaction
Direct)Suppliers)
Efficiency (Standardise transaction processes to improve efficiency and reduce
Manufacturers)
cost) 3.Quality of service (Training, customized orders, delivery frequency).
Channel Structure: 1. Length 2. Breath (More intense, more intermediaries,
Wholesale/Retail)
more exclusive, less distributions) 2. Multiple Channels (Only when reach
Distributor)
MNCs) Supply Chain Members & IORs: 1. Vertical integration 2. JV 3.
Extended integration (each party has an extension of other) 4. Integrated
End)Consumers)
integration (Coordinate activities & planning. Shorter term) 6. Arms length,
transactional r/s. SCM Goals: 1. Waste reduction 2. Flexible Response 3. Unit Cost Reduction 4. Time
Compression. Time in SCM: 1.Time to market (time taken by org to recognize & respond to market needs) 2. Time
to service (Capture order & deliver to meet cust satisfaction) 3. Time to react (adjust/solve cust demands)
Postponement: Time/place of final product configuration. Importance of D/SCM: 1.Creates longterm value for
cust 2. Right product, place, time 3. Recognise & contributes to long-term r/s 4.Recognise all points of contact &
interaction between cust & supplier. (End 3)
Networks can be formed based on: buying processes, supply chain benefits, knowledge benefits, problem
solving capability, r/s, product development.
" interaction Model 1.Firm to firm r/s: short
term-transaction/info exchange. 2.Interacting
firms operate in a power-dependence
atmosphere:
conflict/closeness
(Samsung&apple), closeness/distance, mutual
expectations. 3. Macro environment sets tone
of atmosphere.
Classifying networks: 1. Supplier Network 2.
Distribution Network 3.Product development
network.

Building a
Marketing Plan

B2B from a network perspective: 1.

Network Embeddedness ( Org & actors
connected to others in network by r/s &
by influencing other r/s. 2. Social Capital
(contribution by individuals through
knowledge, expertise, r/s building,
reputation, capability) 3. Defining
network boundaries (imaginary boundary
between stakeholders with high influence
& network members & low influence. 4.
Complexity of networks (all network
members have some type of r/s with all
other members) 5. ARA Model (actors:
individuals, departments, orgs who
participate in a network. Actor Bonds:
connect actors & influence how actors form identities. Resources ties: connect tech, materials & knowledge
resources. Activity Link: tech, admin, commercial activities linked to network connections.)
Reasons for Industrial Network: -apply knowledge to develop specific marketing campaigns &communications
to leverage r/s benefits & build networks. build good WOM core competency that are difficult to copy. (End 4)
Market Orientation: Organizations with a good market orientation, research, anticipate & respond to custs needs.
They have: Market sensing capability: A companys ability to sense change & to anticipate cust responses. cust
linking:The ability to develop & manage close cust r/ss.
Role of Marketing within S/DCM:
S/DCM Managers
Process
To achieve an integrated
D/SCM process.
Configuration
D/SCM process must
cater to different cust
segments.
Social Interaction
Managing working r/s
between marketing &
SCM all levels).

Role of Marketing
1. Share cust & market information with SCM departments.
2. Understand synergy between marketing & SCM.
3. Encourage a demand based information needs market orientation approach.
1. Convert marketing initiatives such as market research, strategic marketing planning,
market segmentation, product development into supply chain drivers (e.g. production,
logistics & purchasing);
2. (Gain knowledge of cust needs to) Configure structure of D/SCM to focus on efficiency
& effectiveness (customer value creation).
1. Exchanging timely information with SCM on: defined cust segment; new cust & product
opportunities; planned promotions; feedback on service delivery; and, seeking information
on lead times, capacity & costs so as to achieve a quick response to cust needs.
2. Working towards collaboration with SCM via a mutual understanding of information
exchanged & collective goals.

Building a Marketing Plan :

1.Analysis! Internal Audit: Performance, Resources, Marketing Management.
1.Competitive Strategy ! Cost Leadership, Differentiation, Focus.
3&4. Market Penetration Aim to gainer higher sales or market share in existing markets with current product
or services range. Encourage higher usage rates, or gain new custs. Tactics: Marketing communications &
personal selling will be important. Market Development Enter new markets with your current product or service
range. Tactics: IORS & building good distribution networks. Product Development Focus on existing markets
but deliver new products / improved products better product & service bundles. Tactics: product development
networks, Products & Services. Diversification Develop new products & services & try to reach new markets.
High risk decision but ROI can also be high. Tactics: networks, new product development, personal selling, IORS
to develop strategic alliances
5&6. Implementation to develop competitive advantages 1.Time compression (1st to market; quickest reaction
times; guaranteed delivery) eg S/DCM, 2.R/s, 3.Continuous improvement (quality). 4.Resources People
(knowledge, expertise) Intellectual property & patents /licenses, 5.R&D
Why segmentation? Select & respond to profitable cust, develop distinct value prop, acquire, develop &
maintain existing custs.
Business Marketing Segmentation ! Market characteristics Location: geographic or regional location. Size:
useful for allocating sales force or grouping cust with similar purchasing power or specific needs custs markets:
how will products or services be used Usage rates: how often & how much they buy. Purchase situation: Straight,
modified rebuy, new task. Buyer characteristics Purchasing strategies: optimizer or satisfier? Policies:
centralized/decentralised, green purchasing? Importance of purchase: how important is product or service to
core business of customer? Attitude to risk: innovative & willing to take risks for long term gain or risk adverse,
buy tested products. Personal characteristics: what are people like, what is business culture?(End 5)
(Lecture 6 implementing B2B marketing strategy and tatics)
Step 1: What is Strategy?(Cost leadership) Step 2: Value Prop? (All benefit approach)Step 3: Link tactics
to Strategy. (Marketing Mix..)

Positioning by value
proposition: 1. All benefits
Approach 2. Favorable points of
difference 3. Resonating focus
proposition.
B2B Benchmarking involve
selecting specific value
components that have high
relevance for industry/market.

B2B Branding:
Investing in B2B branding:
effectiveness depends on custs
perception. Consistent @ all touch
points. B2B custs perception of
brands: - Brand Receptive Segment
Highly tangible segment Low interest
segment.
Considerations when making B2B
marketing Strategy:
1.Managerial challenges of a network environment: a)
Network visioning perspective(View entire industry network &
formulate a plan on how to increase competitive adv) b) Focal net
mngmt perspective (Formulate strategy for supplier network &
strategy for cust network with obj of leveraging strengths to
enter new market or launch a new product line) c) Portfolio mngmt
perspective (View IORs as a resource pool to realize company
marketing obj. Formulate plan to invest in IORs) d) R/s mngmt
perspective.(Focus in building individual IOR) 2. Manage Risk:
use R/s management. 3. Track custs satisfaction & supplier

costs & satisfaction. (End 6)

Business Products Classification: 1. Input
Products 2. Foundation Products 3.
Facilitating Supplies. Quality is part of
tangible product, its embedded value offered
to cust. It is demonstrated in performance,
durability, reliability of a product.
TWO Dimensions of Quality: 1. Ability to
meet requirements in use to meet cust needs.
2. Cust perception of standard of p/s

compared to competitors. Meaning of quality: 1. Conform to

industry standards & meet cust specifications & possess what
cust want. 2. Company must apply quality specs to internal
procedures. 3. Buyers focus on market-perceived quality &
value vs competitors offerings with no product & cust defects.
Commodity Products happens when products mature & cust
gain knowledge & exp w/ product, increasing number of
competitive/substitute, products meet industry standards.
Marketing Actions: 1. Communicate differences in core
product attributes, demo longterm/ added value, bundle w/ svcs (customization). Product Portfolios: 1. Product
Items Each product offering eg Symmetrix, CLARiiON, Iomega. 2.Product lines Combination of indi products for a
target market segment eg Storage, Protection, Data Mngmt. 3.Product Mix No. of product lines. 4.Depth of product
lines no. of products per product lines.
Four types of Industrial Product Lines: 1. Proprietary catalog products 2. Custom-built products 3. Customdesigned products 4. Industrial Services.
Steps in Product Positioning Process 1. Identify relevant competitive products. 2. Identify determinant attributes
that customers use to differentiate among options & determine their preferred choices. 3. From sample of existing
& potential customers, collect their ratings of each product on determinant attributes. 4. Determine own products
current position versus competing offerings for each
market segment. 5. Examine fit between preferences
of market segments & current product position. 6.
Select positioning or repositioning strategy. Product
positioning strategy: 1. Increase product attribute
importance & competitive ad 2. Communicate attribute
3. Improve attribute cust deem impt. NPD Impoves: 1.
competitive position 2. cust competitive position. 3.
Performance for custs, 4. Convenience for custs.
Traditional NPD: 1. Idea Generating 2. Screening 3.
Business Planning 4. Product Developing 5. Test
Marketing 6. Product launching

New approach to NPD:

1. Preliminary
Investigation 2. Detailed
Analysis 3. Product
Development 4. Testing
& Validation 5. Full
market launch. Why
B2B NPD fail: 1. Going
through motions. 2.
Insufficient Speed 3.
Lack of market
orientation 4. Insufficient
checks. (End 7)
Different levels of
service: 1. Possess the
capability to
manufacture/distribute goods. 2. Offering services that complement product portfolio. 3. Marketing different
product/service combinations. P/S combi: 1. Timescale 2. Importance 3. Potential Value.
Classifying Services:
Product related
Delivery, installation & maintenance, after-sales training, warranty.
Marketing Services
Market research, advertising agencies, export advice
Professional Services
Consulting, accountancy, legal
Information Services
Inventory mnmgt, Supply chain mnmgt, data aggregation.
Financial Services
Financing for product purchase, manage billing process, credit
evaluation, banking & insurance
Characteristics of services: 1. Intangibility (Svcs cannot be evaluated prior to purchase). 2.
Inseparability (Svcs are produced & consumed simultaneously). 3. Perishability (Svcs cannot be stored)
4. Heterogeneity (Svcs involve interaction of many individuals in production & consumption. Need
to ensure consistency.) Pricing Tactics: -offpeak pricing placing orders in advance price incentives
premium pricing at peak service bundling eg EMC puppy dog selling.
Issues in the marketing of professional services:
Management
approaches
to
implementing B2B Service Delivery:
1) Service Concept Development
Communicate the service. 2) Service
Outcome Management How the
service solution solves the problem. 3)
Customer Expectation Management
Know orgs capacity, educate cust. 4)
Physical Resources & Environment
Management Tech, support. 5)
Customer Interaction Management
Covers: order sys, delivery sys,
feedback, r/s building.
Dimensions of service quality:
1)Tangibles: Use of IBM as
replacement product (1989) 2)Responsiveness: (Willingness to help customers) EMC took responsibility of the
problem occurred at Sears even though they did not directly cause it. 3)Assurance: (Ability of service staff to convey
trust and confidence via their knowledge and courtesy) If EMC finds that another suppliers product is at fault, EMC
employees work with the supplier to fix it, without the customer getting involved. 4)Empathy: EMCs service
philosophy We service the worlds largest global companies, who run 7 days a week, 24hrs a day, 365 days a
year .. So we deliver the best service, because thats what theyve asked for. Recognizing how critical their
products were, EMC build in product features and service procedures to ensure that any product problems were
identified and fixed quickly. 5)Reliability:(Able to perform service dependably) EMCs products contained a
Phone Home feature that allow EMC to see problems as soon as they occurred. Delivering Service-internal
stakeholders: Frontline staff, Managers, Support Staff. B2B markets must explain concepts underpinning the
firms offer and train staff about their key role in delivering the offer. Critical success factors that drive the
outcome of new service offers: 1)Leverage suppliers capabilities and strengths. 2)Ensure excellent fit to
customer needs. 3)Expert front-line managers source of ideas to create new services & help cust appreciate
benefits. 4)Implement a formal development process using expert knowledge (eg EMC customer panel that
encourages joint innovation) 5)Planned launch program for new service offering.
Eg of new services: Customised Expert Svc,
Planned Pioneering Svc, Improved Svc Expectations
(eg EMCs AVAMARs Solution). (End 8)
Benefits Costs = Value
Benefits: Functional Benefits functions & features
Operational & Service Benefits Ease of use, reliability,
Duration, aft sales service. Financial Benefits
Convenient payback period, high ROI Personal
Benefits Recognition from choosing the right p/s.
Longterm buyer-seller r/s.
FIVE Factors affecting price setting: Company
(inside out) Costs, corporate objectives, marketing
plans, product range. Customers (Outside in) Value perceptions, Perceptions of product / firm, ability to pay.
Context/Environment (Outside in) Economy, Regulations, Currency.
Channels (Outside in) Distribution Costs, Capabilities, Locus of power. Competitor (Outside in) Offerings,
Pricing/costs, competitive structure. Inter-org price setting: Price structure eg free delivery/no increase in price.
Price reduction in strong r/s, transparent info sharing,mutual org benefit.
Discounts: launch campaign, add value for longterm custs, bulk buy. Pricing & Ethics: Systematic pricing
approach (dont take unjustified advantage), purchase from reliable sources, use environmentally friendly
manufacturing processes, reduce supply chain waste. Pricing Strategies: Outside In Price skimming (set
premium price when there is high perceived value & limited competition) Price Penetration Set low price for
introduction to discourage competition & build EOS. Target Pricing Based on demand chain, where cust indicate
the price point. (Powerful buyers), Suppliers are asked to submit competitive bids. Suppliers may adopt an open
book approach to share cost structure with buyers and accept agreed margin to arrive at a price. Inside Out:Mark

up/ break even Add %

margin to production and
sales costs. Peak Load Set
price range to cover
variable demand with
higher prices for peak
demand periods. Marginal
Cost Offer excess stock or
capacity at a price to
recover costs plus a small
margin. Resale Price
Manufacturers work with
intermediaries to maintain
price levels & position and
maintain
intermediary
margins. (End 9)

Integrated B2B Marketing

Communications:
Communication Strategies: 1. Trust/commitment-based sales communications, 2. Planned & Unplanned
communications, 3. Unidirectional & Bi-directional communications. Communication Strategies (Mohr and
Nevin 1990): 1. Communication Frequency 2. Communication Direction 3. Communication Modality
(formal/informal) 4. Communication Content. Channel Climate: 1. Channel Structure (Relational/Transactional)
2. Channel Climate (trust & support level) 3. Power Balance (Symmetrical vs Asymmetrical).
Purpose of Personal Selling in B2B Markets: Offers are
complex, sophisticated & knowledgeable cust requires high

level of personal service, value creation,

reinforce suppliers reputation for reliability and support services. Sales force for complex orders, E-commerce for
routine orders and enquires.
Factors in B2B Sales functions
Characteristics of good sales stuff: 1. Customer orientation (empathy) 2.Service Orientation (increase customer
Selling
Prospecting
Inbound Info handling
Pre-sales service
CRM
Outbound Info handling
Post sales service
Market Research
Sales team cooperation

Sales Tasks

Closing sales to prospective & existing customers.

Locate new customers and follow up on leads from referrals & marketing campaigns.
Analyse and feed info about market & customers & netowkrs to internal department.
Ensure customers are confident enough about the value offer.
Develop and maintain r/s.
Deliver info about the org to customers. (Reputation building; value creation)
Provide info, handle questions and problems and encourage long term IORs.
Analyse and forecast market trends.
Team integration. (Note that most sales managers have online project collaboration with
sales teams e.g. Regional sales collaborating with HQ product sales )

satisfaction, thus retention) 3.Adaptality during selling

process. (Stay attuned to custs needs)
Three trends that impact B2B sales enrivonment: 1.
Customers wants it all, 2. Companies exploring cheaper
ways to satisfy custs yet grow sales, 3. Org studying
custs buying pattern.
Allocationg Sales approaches to IORs:

Sales Force Structure: 1. Geographically based

(reduces travel time but sales person must be
equipped or support with knowledge) 2. Product Based
(specialize in narrow parts of product line, more for
complex products, sales force develops deeper
knowledge) 3. Market Based (SF learn specific
requirements of industry/cust, SF more prepared to
respond to buying needs of cust)