Business to Business Marketing - Term Paper Example

Business to Business Marketing Table of Contents 0 Introduction 3 2.0 Sales Force System 3 2 Organizing the sales force system 3 2.2 Suitable Sales force management system-Incremental Method 4 2.3 Suitability/benefits of Sales force management system 5 3.0 Relationship variables and business networks 7 3.1 Relationship variable in B2B 7 3.2 Effectiveness 7 3.3 Sustainability of relationship 8 3.4 Integration with customer loyalty 8 4.0 Difference between B2B and B2C 9 4.3 Advantages and Disadvantages of B2B and B2C to SPSL 11 4.3.1 Advantages of B2B 11 4.3.2 Disadvantages of B2B 12 4.3.3 Advantages of B2C 13 4.3.4 Disadvantages of B2B 13 References 15 To: Peter and Harvey Blair, SPSL Ltd From: John Smith, XYZ Consulting Ltd Re: Business-to-Business Marketing Report 1.0 Introduction As requested, please find herewith our Business-to-Business Marketing report that addresses your marketing concerns 2.0 Sales Force System A sales force system is such a system which combines the marketing and management systems in a company in such a way that it would eventually assist a company, in the mechanization of sales and sales force management operations. Moreover, the marketing and management systems are usually combined with a marketing information system, and due to the fact, they are frequently known as customer relationship management (CRM) systems (Temponi, 2010). 2.1 Organizing the sales force system SPSL can take the following steps for organizing its sales force system: Call and Lead management. SPSL needs to plan for each and every customer interaction and make a record of every successful lead. A sales force system will help the company in complying with the company’s process and will certainly result in successful interactions. Opportunity management. If the process of sales force system is implemented correctly, than this will result in a profitable opportunity for the company and will result in an opportunity for sales. Account management. SPSL has to effectively organize all the successful leads and integrate with customer accounts by implementing the sales force system. It could then be measured by relevant tools, process, and objectives of the sales force system. Territory management— for monitoring the account, the territory is measured by the number of account reps and prospective versus active customers. Effective time management. SPSL needs to accurately measure the tasks which are related with implementing the sales force system and evaluate the time needed for performing each task. Sales force management. This crucial process includes training and developing the company’s sales staff regarding the sales force management system. Apart from that the management of SPSL should implement relevant IT systems and control process and spread it across relevant people and departments of the company. 2.2 Suitable Sales force management system-Incremental Method For Saxon plumbing services, the incremental method could be the best approach for determining and evaluating the size and ability of the sales force size. The incremental method is primarily based on the proposition that net profit may increase for the company when additional sales staff is added for an increase in potential sales revenues and as a result that results in incremental costs for the company (Brennan, Canning, & McDowell, 2010). This method could be appropriate for Saxon Plumbing services. However this method could be one of the most difficult to implement. SPSL will be required to put in intensive efforts for organizing and developing a sales response team which can function in analyzing market behavior and can also evaluate alternative levels of selling efforts. Due to this reason, SPSL’s management needs to have an efficient research and information team within the company before implementing this system. An efficient implementation of the incremental method will result in reducing company’s workload, increasing the company’s sales potential and improving the company’s performance on a large scale. 2.3 Suitability/benefits of Sales force management system The Sales force system starts from identifying and analyzing a company’s specific sales targets and sales options. For SPSL, the company’s command center will analyze the inputs and outputs which have been established from a specific control process of a sales force system. The sales force system will allow the company to have an effective control process system which enables the company to have optimum performance standards, evaluation of company’s performance, comparison of actual performance with budgeted performance and as a result taking corrective action for any shortfall (Dwyer & Tanner, 2002). The company can have the following benefits by implementing a sales force management system: One of the key benefits of implementing the sales force management system to Saxon Plumbing services will be the increase in productivity. The sales staff will be able to utilize their in a more efficient and effective manner. The implementation of a sales force system will thus result in increased productivity and will also create a competitive advantage for Saxon Plumbing services by reducing costs, increasing sales revenue and also increasing the company’s market share. Sales staff will be able to analyze and evaluate their performance on a consistent basis. Information will be sent to the company’s management after each lead or call. This also provides a company’s management with an information summary, where the company will be able to utilize the information which is more valuable. As a compliment, the response time of the Saxon’s management will be reduced. Saxon will be highly alert and agile regarding its performance. According to Rao & Rao (2013), sales force systems will increase service quality as well as customer satisfaction if it is implemented shrewdly. But it also depends on whether the company information has been obtained and analyzed in creating a product which can correlate and coincide with customer expectations. Due to this reason the team has to use this system for customer service in a diligent manner. Customers will certainly be more satisfied with the company’s performance. As a result, this provides a competitive advantage to the company because customer satisfaction will also result in customer loyalty and as a result will result in increased revenue generation. 3.0 Relationship variables and business networks 3.1 Relationship variable in B2B Filiatrault & Lapierre (1997) state that in the B2B relationships, the continuous development of a company and constant accomplishments of its both short term and long term goals as well, depends on some key factors, such as, professionalism, hard work, well-oriented goals, precise and attainable correlative tasks. As the modern market offers to its customers alike products, which are manufactured by different companies, hence, in order to survive and subsequently sustain its market share in a particular market, it is imperative for companies to recognize the fact that they key to success in such cutthroat modern markets is that companies are required to amend the level of awareness of both types of people, that is, those who are part of the organization, such as its employees, and those who are not a part of the organization, that is its stakeholders, its customers and the public as well. 3.2 Effectiveness For effective and successful business relationship management, good and positive attitude is the most crucial factor. Since, at times it happens that some companies, which are not well-liked by the general public, suddenly starts to get well-liked by the same people, because one good presentation regarding the company’s business, for the purpose of more clearly depicting the company’s business plans and prospects to the public, by an individual with a good and positive attitude can change the overall image in the eyes of the same people, in such a way that they begin to like that particular company. According to Anderson & Narus (1998), if a company is well liked by some people, then it is possible that one bad presentation regarding the company’s business, may change the same people’s point of view regarding that company, in such a way that they begin to dislike that particular company. Basically, a positive attitude plays a key role in changing the view points of the people in favor of the other company. Thus, it is imperative for companies to ensure that they maintain positive attitude with other businesses, which is the key to earn other company’s trust and confidence, in order to sustain a strong business-to-business relationship with the other company (Sharma, 2002). 3.3 Sustainability of relationship Whenever two individuals sign an agreement, on behalf of their respective companies, for which they work for, in virtual, the two companies signed an agreement, but in reality, the two persons have signed the agreement and thus agreeing with each other on a particular point. So, as the business relationship is actually formed between two different people, as compared to two different companies, which agree with each other, virtually, so it is imperative for the two particular persons so to build and maintain a strong business relationship with each other. And this can only be happen if such persons make some efforts to enhance their individual image in the business market, other than their company’s image, in order to lure the other person to trust him for the purpose of maintaining a long term business relationship with him and with his company (Brassington, 2006). Therefore, it is vital to maintain a strong business relationship with not only the other companies, but with the other people, representing the other companies and this helps the companies to sustain their market share in a particular cutthroat market (Nissanoff, 2006). 3.4 Integration with customer loyalty Quite often it happens that companies usually give comparatively more attention to decision making and revenue generation and almost completely ignore the significance of customer and the importance of their loyalty to the brand. The core reason is that customer are merely the means to contact with the market, and they are rarely given the attention by the company, which they actually deserve to receive, as they play a crucial role in assisting the concerned people to contact with the targeted person. With an appealing personality, and with the help of some vital factors, such as, the use of appropriate tone for answering the questions asked, and trying to establish a strong business relationship with customer can induce the other company to trust the company. According to Koh, Fichman & Kraut (2012), the key is to earn the trust and confidence of the concerned people by using one’s personality in such a way that the other person gets enticed with the personality of such a person, with a charming personality, and consequently, it will earn such a person and his company an opportunity to form a strong and long term business association with the concerned people. 4.0 Difference between B2B and B2C There are two basic differences between B2B buyers, that is, business to business marketing buyers, and B2C buyers, that is, business to consumers marketing buyers. And they are as follows: 4.1 Complexity B2C buyers have comparatively simple and uncomplicated purchasing needs and requirements and they also don’t need extensive support from that particular brand, nor need they to maintain long term business relationships with a brand. In addition, even if a customer is a regular buyer of a particular brand’s product, still the level of interaction between such brand and the customer is swift and low (Solis, 2011). While, the b2b buyers have more complex buying needs and requirements, in comparison with the b2c buyers. Subsequently, it becomes imperative for the sellers that they initially provide their buyers with detailed and important information regarding their products and services and then the sellers must also keep themselves available for contact, for their buyers, to answer any of their queries and concerns regarding the product or service which they purchased from the seller (Vitale, 2011). Furthermore, in b2b relationships it is also imperative for the sellers to maintain strong and long term business relationships with the buyers, for the purposes of providing assistance to the buyers regarding, how to use a particular product or service, to offer training regarding the product or service, and also to offer customer support as well. Because of the complex buying needs and requirements of the b2b buyers, it is imperative for the b2b buyers to remain in contact with the seller from whom they bought a particular product or service and they also need to trust and rely on such sellers for that. And for that, the sellers must ensure that they keep themselves available for contact, for their customers, keep sharing some important information with their customers, and be sincere with them and also to remain humble with them, during their interaction with them (Anderson & Narus, 1998). 4.2 Psychological B2C buyer’s purchases are significantly influenced by their personal sentiments and their basic and essential wants and demands, that is, food, to control their hunger, an accommodation, where they can live and clothing, to prevent their body from extreme heat or cold. This indicates the fact that we are comparatively attracted more by such brands and can identify our sentiments and basic needs and can also ensure us that they understand our sentiments and can also fulfill our needs and requirements (Krumbholz, 2001). However, the b2b buyer’s purchases are extensively influenced by some crucial factors, such as, their corporate objectives, their financial plans and also by the nature of the relationship with the sellers, from whom they buy a particular product or a service (Wernerfelt, 2006). It is imperative for the sellers to ensure that their products or services should be such that the buyers feel satisfied that such particular product or service would definitely facilitate them to accomplish their business objectives and also such product or service is as per the budget, which was planned by them. Moreover, the sellers also have to ensure that they establish and maintain a strong and long term business relationships with their buyers, so that they can ensure their buyers that their products or services and they themselves are best suited for them, to assist them to accomplish their business goals and objectives (Zott, and Amit, 2004). Hence, the aim of the b2c companies is to make sure that after creating a brand it must support its marketing activities, in such a way that it attracts the people on a personal and emotional level. Whereas, the aim of the B2B companies is to ensure that after crating a brand, it must support its marketing activities in a way that it persuade the people that the brand is competent enough to assist them to accomplish their goals and objectives, that the brand possesses the required level of expertise, and also that the brand have the required level of analytical skills as well (Shimizu, 2009). 4.3 Advantages and Disadvantages of B2B and B2C to SPSL Though SPSL can benefit by implementing B2B as well as B2C system of marketing but there are a few things which SPSL has to consider before implementing this system. They are: 4.3.1 Advantages of B2B Client Relationship Although SPSL has few clients, but this gives an opportunity to SPSL to take care of each of its client’s needs and demands, comparatively more satisfactorily than the B2C companies. As SPSL can emphasize more, in comparison with the B2C companies, on its few but large client’s wants and requirements, thus it can allocate individual sales representatives on each client, which would assist SPSL to identify and accordingly meet its each client’s wants and requirements. Marketing Costs A B2B firm like SPSL can save money on advertising and marketing expenses. A B2C firm has to spend money in many advertising channels, such as television, radio, Internet and newspapers, because it needs to attract a large number of clients. The B2B firm only needs to reach a few decision-makers at the client firm, and its representatives can contact these people directly. 4.3.2 Disadvantages of B2B Bargaining Position SPSL has basically lower influence on their clients, in comparison with the B2C companies. And due to the fact, the other businesses realizes the fact that as SPSL depends on other businesses, for its own business operations, thus the other businesses are always in a strong bargaining position to demand for a significant reduction in price or may even demand for other related services, such as free delivery of a particular product which they are bought from SPSL. Low Leverage According to Filiatrault & Lapierre, (1997), B2B firms have less leverage over their customers than B2C firms do. The other business knows the B2B firm depends on its business, and it may ask for an aggressive price reduction or demand other services, such as free delivery. An individual retail customer usually has to pay the sticker price on an item and has to accept the financing terms that the retailer offers to all customers. 4.3.3 Advantages of B2C Easier Business Administration For a company like SPSL, B2C could be highly advantageous because by implementing the right software, inventory levels, shipping and delivery of products and various other company tasks could be easily stored, categorized and even updated within the specified time, and can even be accessed whenever demanded by the company’s customers. Eliminates the Competition Gap B2C marketing allows companies like SPSL to compete with equal footing and allows them to sustain the pressure caused by bigger and much stronger companies. B2C marketing allows companies like SPSL to compete on quantity, quality, price, and also availability of the products. 4.3.4 Disadvantages of B2B High Marketing / Advertising Expenses One of the biggest consequences of B2B is high marketing and advertising costs and this could then dilute the company’s revenue and could increase the company’s overhead expenses. 5.0 Conclusion The report does give a vivid portrayal of how effective and beneficial B2B as well as B2C marketing can be for SPSL. It is evident that the commercial plumbing market is a fiercely competitive market and is also experiencing significant growth with the passage of time. However, it is also a very saturated market and is comprised of various big and small enterprises, with various traits and characteristics. By implementing either B2B or B2C in such a market could certainly benefit a company like SPSL because this will help the company to solidify their goodwill in the market. SPSL must consider the fact that the company is competing with firms which possess various local as well as international networks and to break this strong chain, SPSL has to adapt a strategy which can help the company to solidify itself within the market. Implementation of this mode of marketing will allow SPSL to constantly target multiple markets and will mitigate the potential of stringent business competition and various other economic and financial concerns. Though SPSL has done well in maintaining a stronghold in the business sector in it operates but the company directors have to keep themselves indulged in the company matters to improve the performance of the company in crucial matters. References Anderson, J. C., & Narus, J. A. 1998, Business marketing: understand what Customers value. Harvard Business Review, 76, pp. 53-67. Brennan, R., Canning, L., & McDowell, R. 2010. Business-to-business Marketing. Sage. Brassington, 2006. Principles of Marketing. England: Pearson Education Limited. Dwyer, F. R., & Tanner, J. F. 2002, Business Marketing: Connecting strategy, relationships, and learning. New York, NY: McGraw-Hill. Filiatrault, P., & Lapierre, J. 1997. “Managing business-to-business marketing relationships in consulting engineering firms” Industrial Marketing Management, 26(2), pp. 213-222. Krumbholz, M., 2001. The implementation of enterprise resource planning packages in different organisational and national cultures. Information Systems, 26(3), pp. 185-204. Koh, T.K., Fichman, M. & Kraut, R.E., 2012. Trust Across Borders: Buyer-Supplier Trust in Global Business to Business E-Commerce. Journal of the Association for Information Systems, 13(11), pp. 886-992. Nissanoff, D. 2006. FutureShop: How the new auction culture will revolutionalize the way we buy and sell things. Springer. Rao, A.S. & Rao, V.G., 2013. Service Quality in e-Commerce and Strategic Advantage: An Empirical Assessment. The IUP Journal of Business Strategy, 10(2), pp. 50-66. Sharma, A. 2002, “Trends in Internet-based business-to-business marketing” Industrial Marketing Management, 31(2), pp. 77-84. Shimizu, K., 2009. Advertising Theory and Strategies. 16th ed. Tokyo: Souseisha Book Company. Solis, B., 2011. Engage!: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web. John Wiley & Sons, Inc. Scott, L. 2002. Deconstructing the Formula for Business Model Innovation. Deloitte Research. Temponi, M. 2010. Critical decisions for ERP integration: Small business issues’. International Journal of Information Management, 30(1), pp. 28-37. Vitale, R. P. 2011. Business to Business Marketing. Pearson Education India. Wernerfelt, B. 2006, ‘A resource‐based view of the firm’, Strategic Management Journal, Volume 5, No.2, pp. 171-18. Zott, C. and Amit, R. 2004. Business strategy and business model: Extending the strategy-structure-performance paradigm. Strategic Management Journal, 22, pp. 493-520. Read More