Business to Business Marketing - Assignment Example

Running head BUSINESS TO BUSINESS MARKETING 13th July Word count 2923 Question1. Changes that TCL should make to their Marketing Mix in order to remain competitive within the marketing and advertising sector Price Due to the current economic climate, the purchasing power of the key clients of TCL has reduced. In this regard, there is need for TCL to review its pricing strategies to cater for small firms that are loyal to the company. One of the essential aspects that the company should emulate is to lower the percentage that is imposed on the clients advertising budget for example from the current 10-15% to 5-12% (Simon and Marx, 1982). Even though David and Angela prefer rigid pricing system, it is imperative for them to consider negotiating with their customers especially those who may have a constrained advertising budget. Through negotiating on the prices, TCL will maintain the loyalty of the existing customers while still attracting new clients who emulates the services of the firms that are competing with TCL in the advertising sector. Place Being based in Cambridge, TCL effectively meets the needs of the small and large enterprises around the town. However, as a result of the decreased revenue due to the economic downturn, some of the clients who are outside Cambridge may opt to cut on their travelling expenses. In this regard, it is essential for David and Angela to open more braches in cities such as Birmingham, Manchester, Newcastle and Liverpool. In this way, TCL will reduce the costs incurred by its clients while travelling to Cambridge. It is also essential for the company to centralize its operations by ensuring that the Designers and Account Executives work in an established office. In this way, the company management will effectively monitor the performance of its employees. In addition, the TCL Company will emulate the culture of team work that is vital for a sustainable growth of any organization. Promotion Currently, TCL adopts word-of –mouth as its primary promotion strategy. Even though this strategy has resulted to an increased number of customers, the current economic climate may negatively affect this strategy. This is based on the fact that some of the clients may lack financial ability to emulate the services offered by TCL thus making it difficult to communicate the significance of the services to other potential clients. This means that even though TCL has significantly relied on word-of-mouth in its promotion, the company should adopt social media to promote its products. In this way, it will effectively attract new customers especially those who regularly use social media during their buying process. In addition, the company should improve its website by allocating at least 15% of its revenue to ensure that it can easily communicate with its clients regardless of where they are located. It is also vital for TCL to collaborate with its clients in sponsoring social and cultural events in cities such as Bristol, Portsmouth among others. During such occasions, the company should fix banners that depict all the services it offers and their prices. In addition, to promoting its services in the Advertising Age and PR Week magazines, TCL should also embark on sponsoring local and international trade fairs. In this way, it will easily intermingle with other multinational companies thus allowing the company to undertake a comparison of its strategies with those of its competitors. In the light of the current economic climate, firms in the advertising sector have adopted various strategies with an aim of putting at bay their competitors. For example, as some companies have embarked on expanding their budgetary allocation to participate in the promotion of their products in the global market, others are focused at improving products awareness at the local level. This means that even though TCL is promoting its products at the international market, it is vital to ensure that local consumers are aware of its products and services. In this way, it will have adequate financial resources that are vital to undertake global promotions. One of the ample opportunities that TCL should utilize is the upcoming 2012 London Athletics. During this event, the company should emulate competition and come up with brochures that it will give to the potential clients who will visit London. Products The major services offered by TCL are Media Services, Advertising and Marketing Services. To ensure that adequate information reaches maximum number of consumers, it is fundamental for TCL to undertake an extensive research on the publicity of the various media. This also includes taking into consideration the budgetary allocation that the clients have maintained for advertising purposes. Another significant strategy to manage its product and reduce operation costs is that TCL should establish its own department that will be responsible for production of the marketing and advertisement material. In this way, it will have an upper hand in monitoring the materials as well as reduce the transport, supervision costs among other expenditure experienced when dealing with the PJW Media Production. It is also vital to ensure that the company chooses a media channel that offers low prices but has a wide coverage. As a result, the clients will be loyal towards TCL products resulting to reduced cash outflow for the company thus increasing on its profitability. Question2. Extent to which B2B relationship variables and business networks are likely to be important to TCL B2B relationships entail the process of formation of extensive as well as strong economic, social, technical and service ties in a long term. The major aim of creating business relationships is to lower costs in addition to increasing value for the firms thus attaining a mutual benefit. Key aspects of business-to-business relationships include lifecycle of relationships, confidentiality, trust, relationship quality and clients involvement. It is worth to note that in their efforts to instigate strong relationship with their clients, David and Angela have recognised the importance of B2B relationships. To manage the complexities associated with B2B transactions, companies adopt customer relationship management. This entails creating an effective communication between the company and its clients (Gotschall, 2000). A major variable in B2B relationship is quality services and products that are easily affordable by other firms. This implies that even though some companies emulates other aspects to maintain a strong B2B relationship, majority of local and international firms have embarked on quality products and affordable prices to survive in the current economic environment. B2B relationship is enhanced through various variables that include trust in the relationship, relationship commitment, relationship practices and policies, satisfaction and mutual cooperation. In order to ensure that firms relate with each other in a positive way, the aspect of loyalty cannot not be overlooked. For example, TCL has continued to engage PJW Media Production in its activities an aspect that resulted to a strong sense of loyalty between the two firms. Creating customer engagement In the current economic environment, firms have been engaged in price wars as they focus at putting at bay their competitors. In addition, B2B companies are focused at improving the performance of their consumers in addition to delivering quality products and services to other firms. It is vital to note that two competitive advantages that companies engaging in B2B relationships experience are customer engagement and customer impact. Benson-Rae (2007) stipulates that customer engagement entails the creating an emotional connection between firms and customers that is based on passion, integrity, pride and confidence. As a result of customer engagement, customer impact is established based on the genuine connection between the customers and the organizations (Benson-Rae, 2007). Time dimensions of relationships One of the major variables that affect B2B relationships is time. Relationships are dynamic and through potential interactions and limit for interaction, time plays a vital role of managing business relationships. According to Dwyer et al (1987), there are five stages of B2B relationships. These include full mutual awareness, exploration, expansion commitment and dissolution. In its effort to create strong B2B relationships, key factors that a firm such as TCL faces includes experience, uncertainty, distance as well as commitment. Structure dimension and B2B relationships Relationship continuity refers to the duration within which a firm maintains a relationship with other organizations. For a continuity to exist, the aspect of satisfaction should prevail between the firms. In addition, negotiation that entails reaching a remarkable decision in case of disputes among the parties is critical for B2B relationship. The importance of relationship variables Firms that value B2B relationships are basically focused at improving their profitability. As stipulated by Tuten & Urban (2001) objective measures such as sales volume and affective measures for instance satisfaction are main variables that are used to measure the success of any B2B relationship. On the other hand, Baraldi (2007) argues that a successful business to business relationship is based on total commitment among the managers, cultural fit among the employees, strategic fit, risk sharing, exchange of knowledge and sufficient allocation of resources among firms. This implies that since TCL already established relationships with other local business organizations, the company will benefit from high level of efficiency and effective organizational processes. Recouping of investment Through the business networks and participation in the business community organizations, TCL will benefits from other major aspects that will have implications on its revenue, employees experience and company reputation among others. For example, the company will have an opportunity to intermingle with job prospects. This implies that employees with wide range of skills and making significant contribution to TCL will have the chance of being employed on a full time bases by TCL (Levy, 2000). In this way, the company will have productive and motivated human resources thus enhancing the productivity and the profitability of the company. The company participation in community based initiatives is also an imperative way through which the company will help other institutions for being their suppliers. Being an advertisement company, TCL will have an ample opportunity of highlighting its products and services to the potential clients. It is worth to note that since Cambridge business community is composed of firms with a diversified product portfolio, it will be possible for the company to negotiate with other firms thus expanding its customer base. Likewise, business communities are made up of skilled personnel in the field of marketing, project management, human resources management, logistics management as well as experienced engineers and designers (Hiam and Charles, 1992). In this way, TCL will benefit from free assistance from other firms. As a result, the company costs of training or hiring experienced personnel will be reduced. Social interaction is also a positive implication that TCL will experience. Since it is an advertising company, TCL has an obligation of creating a positive impact on the lives of the consumers. This implies that the company should be engaged with various activities with other firms with an aim of not being socially excluded an aspect that may demotivate its clients as well as individual consumers. Strategic value Another major benefit that TCL will enjoy through B2B relationship is strategic value that is caused by reduced uncertainty and improved stability. As a result, the company will have a better planning of its operations, improved utilizations of its assets, reduce risks and provide a strong foundation on which the company will be built. Ballantyne (2004) argues that strategic value occurs if firms enhance their competitiveness as a result of the B2B relationships in which they are involved in. Anderson et al (1994) identified the benefits of being engaged in a business networks as speculated constructive effects on network identity. In the same way, Moller and Torronen (2003) stipulate that firms can access the resources of supplier’s diversified network through the supplier net-work function. Improved knowledge B2B relationship will benefit TCL by knowledge based value that is characterized by generation of new ideas, market intelligence, transference as well as attaining effective methods of responding to consumer demands. Additionally, parties within a B2B relationship have the ability to invent new ways through which they can improve the performance of their businesses. Ballantyne (2004) asserts that knowledge value enhances innovative solution to wide range of problems facing organizations. To acquire more benefits from the B2B relationship, I recommend David and Angela to undertake a comparative analysis and analogy to come with strategies that would ensure they provide quality services to other firms (Day, 2000). This will not only create a sense of trust and commitment but also it will nurture the ongoing relationships thus improving the profitability of the company. Additionally, TCL managers should engage their marketing professionals in order to understand the dynamics and nature of their relationships with other firms (Brennan et al, 2008). In this way, any threat that may hinder the continuity of the relationships will be addressed while at the same time maintaining the strengths of the existing B2B relationships. Question3. Various ways that David and Angela might organise the sales force, and the approach I believe to be the most appropriate Based on the large number of clients that TCL will attain especially after undertaking an extensive advertising and promotion, David and Angela are considering employing more sales executives. As a result, Accounts Executives are likely to experience additional duties implying that the directors have to emulate effective strategies to ensure that its employees including the sales team and the Accounts Executives are motivated. One of the major approaches that the directors should use is the sales strategy to organize the activities of the new sales team. First, the directors should hold meetings with the new sales team with an aim of communicating the objectives of the company. In this way, individual members of the sales team will have the necessary information that will help them to establish their own objectives that are in line with the objectives of the company. Additionally, the directors should allocate the sales team to the various Accounts Executives. This will also involve training them on how to deal with the different accounts within the TCL Company. Based on the high number of promotional strategies that the company is focused at in order to improve its product awareness, it is vital to come up with a budget that caters for all the sales team expenses. In this regard, it is essential for the directors to guide the sales team with the help of the Accounts Director on how to make a proper budget that caters for all the promotional and advertising materials that the sales team needs to undertake their activities. David and Angela can also organize the sales team by geographical divisions. This implies that since the company is aiming at expanding its customer base by establishing more branches within the UK market, it is fundamental to ensure that each of the sales executive is allocated a particular region that he or she will serve. It is essential to note that even though customers value quality products and services, their buying behavior is also significantly influenced by other factors such as culture, their economic situation among other aspects. Through allocation of the new sales staff to various regions, it is easier for the sales team to identify the needs of the various customers. As a result, the company will effectively provide services that meet the needs of its customers. In the same way, it is fundamental to create a strong linkage between the sales team and the Accounts Executives. As a result, the Accounts Executives will have extensive knowledge about the challenges facing the new members of sales team while they are in the field. David and Angela are focused at improving the performance of the sales team. This means that the company can manage the sales team by product specialists. Being an occupation that combines marketing, sales and technical skills to sell a product or a service, product specialists will significantly improve the performance of TCL. This means that at least three of the sales team members should be engaged in the inside marketing of the company. As a result, they will acquire imperative knowledge that is related to the product lifecycle. Through their involvement from the conception to the completion stage, the internal sales executives will also be influential in designing the company product to cater for the needs of their consumers (Kotler et al, 2008). This will not only lead to increased sales and profits but also clients will be more loyal towards the company an aspect that leads to an expansive market segment for TCL Company. In its effort to improve productivity of the sales team, it is essential for the company directors to streamline the communication between the sales team and the directors. This means that David and Angela can select two team leaders. One of the leaders will be responsible for organizing the internal sales team while the other one will oversee the activities of the external sales representatives. Being answerable to the directors, the two team leaders will regularly update the company directors on the performance of the TCL Company products in the market. Due to the various approaches that TCL can adopt to organize its sales team, I believe that the geographical division of the sales team is the most appropriate. With an aim of expanding in the UK market, geographical division will benefit the company in identifying the reaction of the new markets on the company products. Additionally, it is vital for the directors to select two team leaders who will oversee the integration of the sales executives thus achieving the objectives of the organization. Through geographical division, the company will also have an ample opportunity to compare the performance of its products in the various markets. References Anderson, James C and James A. 1984. A Model of the Distributor’s Perspective in Business Markets: A state of practice3 Study, Journal of Business to Business Marketing, 1, 3-29. Baraldi, E., Brennan, R., Harrison, D., Tunisini, A., & Zolkiewski, J. 2007. Strategic thinking and the IMP approach: a comparative analysis. Industrial Marketing Management, 36(7), 879−894. Ballantyne, D. 2004. Dialogue and its role in the development of relationship specific knowledge. Journal of business & industrial Marketing, 19 (2), 114-23. Benson-Rae, M. 2007. Integrating Strategy and Relationship Concepts: How Business Relationships Shape Strategy. 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