Business to Business Marketing - Research Paper Example

Business to business marketing Table of content ………………………………………………………………………………3 Introduction…………………………………………………………………………….3 Nature of the business to business marketing………………………………………….4 Importance of marketing in business organization…………………………………….4 Segmentation of the Business market………………………………………………….5 Business marketing mix………………………………………………………………..6 Product………………………………………………………………………….6 Price…………………………………………………………………………….7 Place…………………………………………………………………………….7 Promotion……………………………………………………………………….8 People…………………………………………………………………………...8 Physical evidence……………………………………………………………….8 Process………………………………………………………………………….9 B2B marketing strategies………………………………………………………………9 Relationship marketing in B2B organizations………………………………….10 Commitment…………………………………………………………….10 Trust……………………………………………………………………..11 Co-operation…………………………………………………………….11 Social Bonds…………………………………………………………….11 Performance satisfaction……………………………………………….. 12 Strategic planning Gap………………………………………………………………….12 Product Life cycle and strategies………………………………………………………..13 Product planning and strategies…………………………………………………14 Conclusion………………………………………………………………………………15 References………………………………………………………………………………16 Abstract: Business to Business marketing is practically modern term of the industrial marketing. Business to business marketing can be treated as the marketing activities between two organizations. In this particular case the buyer seller relation is pretty important but it is basically between the organizations instead of individual customers. In most of the cases the B2B marketing are short term activity which is done carefully with less glittery affairs. The relationships play the vital role in this module of marketing. The marketing mix is more or less same as of the consumer products but pricing, consumer relationships and product quality play the vital role in this scenario. The branding is limited and the awareness is in the low scale among the individual customers. However, some marketing and branding strategies like online advertising in B2B portals, participating in Trade fair, corporate interviews, selective advertising in business channels and industrial magazines etc. The basic concept of marketing is same here but with little modification. Introduction: Business to business marketing all about creating relationships and maintain it properly within the business partners. In this field that is; in industrial marketing or business to business marketing the government organizations, manufacturing, companies, service providers are involved. There is no direct relation between the individual end users. Consumer behavior, product quality, pricing and transportation play the important role. The creating of corporate relations is the key factor in this marketing module. More relations mean more options of having more clients. This paper will discuss about the basics of business to business marketing, marketing mix, positioning, marketing strategies etc. Nature of the business to business marketing: In business to business marketing the customer is an organization instead of an individual end user, and that is the main distinguishing character of the business to business organizations from the business to customer organizations (Brennan, Canning and McDowell, 2010). There are many differences between the consumer market and the business market. In this case the business market. There are some products which are always bought by the organizations but not the individual customers. For an example the management consultancy services, this is a service based products which can be sold only to the organizations and in this case the B2B marketing is very much important. The nature of demand in the business market is basically indirect in nature. It is been derived from the direct demand of the end products in the consumer market (Brennan, Canning and McDowell, 2010). In the business market the amount of the demand is much more than that of the consumer market. However, the degree of demand can be increased with the help of proper marketing activities. Importance of marketing in business organization: Marketing is concept that, boost up the sales. It is basically a presale activity. Marketing is something which needs innovation and creativity as the act of marketing depends on the need and preferences of the consumers. The marketing is the blood of the company without the proper act of marketing it is very hard to sell a product. Marketing consist of many factors and, it is always changing with the changes in the mind of the customer. There are many theories in marketing management but, most of the times these theories are better to be read in the books for the academic excellences but, in real life the marketing have ever changing dimensions. It should be remembered that the proper marketing strategy would give a long term effect on the product itself to modify into a brand. Most of the time marketing and sales is taken as the cause and effect, but marketer forget about another asset associated with the marketing and that is brand. Proper marketing strategy is a long term effect towards the product. The strategic planning gap is one of the vital factors to be analyzed before making any plan about the marketing plans and expenditures. Segmentation of the Business market: There are basically four ways the marketers segment the business market. And this segmentation is very important to analyze the marketing activities done by the business organizations. However, the four major ways are 1. Demographic, 2. Customer type, 3. End user application and 4. Purchasing situation (Kurtz, MacKenzie and Snow, 2009). If the proper segment is identified than the suitable marketing activities can be strategized accordingly. Business marketing mix: Business to business organizations are mostly into manufacturing raw materials for the end products. However, in B2B marketing long term services are also very important and that is the reason the 7 P of the marketing mix is very important to be analyzed. The traditional four Ps of marketing are very important for the industrial product marketing. However, according to Crane (1993) the additional three Ps are also very important for the service oriented business (Crane: 1993). And they are people, physical evidence and the process. The traditional 4 Ps of marketing mix, that is product, price, place and promotions are basically for the tangible products. However, with the advancement of the marketing concepts and with the advancement of the service based market the three more Ps, that is; people, physical evidence and the process have become very important (Lancaster & Reynolds: 2005) Product: The product is very important for any business. However, in this case the products are basically raw materials, services etc. the product quality must be acceptable within the market. For an example, the quality of the food must be maintained properly by the mass food producers who supply food materials to the hotels and restaurant. The food safety is pretty important in this case as far as the customer satisfaction and the reputation of the supplier are concern (Schröder: 2003). However, for the other products like industrial raw materials, the quality speaks the ultimate results. Price: The most important competitive advantage is the pricing strategy of the Target. Price is the main factor which drives the sales (Holden and Burton. 2008).The price is a variable entity. It differs according to the quality and the quantity in the industrial marketing. The importance of the penetration pricing and the skimming pricing is very important for the introduction of any products. However, there are three other pricing strategies which are very must effective to put value towards the customer satisfactions and they are. Perceived value pricing, relationship pricing and behavior modification pricing strategy (Pezzullo & American Bankers Association, 1998). In Business to business the relationship pricing plays the vital role. Place: The place is one of the most important factors for any business. However, in business to business marketing the geographical positing plays important role but not the major role. In most of the cases the manufacturing unit and the corporate units are separated by the geographic boundaries. The geographic segmentation is a strategic decision for the organizations. There are many organizations who want to be close to the customers. For an example, a corporate service provider company would like to stay near to the corporate hub to be connected with the potential clients. For example the Ottawa region is the favorite geographical segment for the organizations who sell their products to the federal government (Kurtz, MacKenzie and Snow, 2009). Promotions: Most of the promotions and marketing activities are regulated by voluntary controls in the nations. Online promotion through an interactive website might be a very good option for the industrial business, according to Kung, Picard and Towse (2008) the European countries have the higher accessibilities in the interment. Effective promotions can make wonders in the industrial market. Price discount is a traditional strategy but, it always works efficiently. However, promotional activities are always in the lower side in the business to business marketing (Blythe & Zimmerman, 2005). People: The people are the primary part of the service delivery process and these are the main people who can influence the customer’s mind towards the product. The person who performs the service delivery is the most important personnel in the service industry towards the customer’s mind. These service providers are the face of the brand or the company, so, the better service mean better reputation. It has to be remembered that the services are basically delivered by the people so, they are the most important factor for the customer satisfaction (Lancaster & Reynolds: 2005). In business to business organizations the companies look for long term relationships and for that the great people are required who can demonstrate the services in an effective manner. Physical evidence: For any industrial businesses which are mostly service oriented are much tougher to sell as the customers do not get the actual feelings of the product while they are buying the product. However, they feel the product while they are availing the service and that is basically after they buy the product. For this particular reason the physical evidence of the product is very much important. The physical evidences are the actual environmental situation where the services are provided. The actual feeling of the products must be created by the sales person at the point of sales towards the customer so the customers would be feeling confident to buy the products. For an example, while a software company selling security software to the government or to any bank then they has to send a trainer along with the product to train the employees of the government to operate in proper manner. This is a value added service to create the physical evidence of the product and services of the software company. Process: This particular functional activity is actually the procedure or mechanism and flow of work towards the service. The proper process can be a great positive point towards the delivery of the best service. In the business to business organizations the inventory and dispatch process is very much important after the manufacturing and engineering processes. However, each process has its own importance in the industrial market as all the different processes are inter-connected. B2B marketing strategies: The strategic planning is one of the main functions in the marketing department before taking any decision about the budget and planning. First of all it should be analyzed that why do some firms get the success and some don’t even after having the same marketing strategy with same expending budget? Business to business market is majorly driven by the buyer’s behaviors. The buying behaviors of the organizations must be studied properly to formulate the best marketing strategy. The buying behavior of the government plays a vital role in the business market. The federal government purchases approximately $20 dollars of goods and services from the business market every year (Kurtz, MacKenzie and Snow, 2009). And this $ 20 billion can be taken as the business market potential from the B2B organizations. The penetrating strategies like corporate meetings, corporate marketing and corporate gifting plays a major role in this case. On top of these factors one of the major marketing tools is the trade fairs, where the buyers meet the seller. Global sourcing is also a very good option that helps in sourcing the database of the global buyers of many industrial products. Relationship marketing in B2B organizations: As per Brink & Berndt (2009) the customer database should be maintained to get a proper customer relation for a longer time. There are some important variables in relationship marketing and they are stated below. Commitment: Commitment is a behavioral approach of the organizations which creates healthy relationship. The proper commitment can be very helpful to build a long term relations within the buyers and sellers. Therefore it can be said that a strong relations grow with the commitments (Fill &Hughes, 2006). The interdependence of the corporate partners and the channel members are highly dependent on the commitment shown by the partners. Trust: Commitments and the trusts are the two separate sides of the same coin. In the industrial business relations the trust matters a lot. In most of the cases the manufacturing organizations are doing business globally with different nations. And in this case the trust creates the suitable business environment among the partners in different nations. It is been said that once the trust is formed the opportunity arises for the sellers to get more references and the major positive output comes from the satisfied end-users (Fill &Hughes, 2006). Co-operation: The relationship marketing which is the other mode of the industrial marketing has a great importance of the co-operation. The co-operation creates an atmosphere which is advantageous for both the buyers and the sellers. Mutual co-operation is the key to the success in the industrial marketing (Frew, 2005). Social Bonds: The development of the social bonding is a great strategy in the business to business marketing. The social bonding creates the identity of the organizations within the corporate society which helps the organizations to get more potential customers for the long time. Development of the social bonding is the major feature of the business to business marketing and it is very important within the B2B financial industry (Ennew, and Waite, 2006). The proper social bonding helps in getting sponsorships for some industrial activities like trade fairs and trade advertising etc. Performance satisfaction: Performance can be treated as the 5th P of the marketing mix in the industrial marketing. The great performance can shadow all the other drawbacks of the company. In most of the cases the great performance attracts more new clients to these industrial organizations. The marketing performance helps the internal managers to measure the effectiveness of the organization to meet the demand in the external environment (Wolper, 2005) The B2B organizations majorly seek for the relation between the partners which has high inter-personal trust and inter-organizational reliance. This combination makes the relation a stable relation which leads to a great reliance between two business organizations (Mouzas, Henneberg & Naude, 2007). Strategic planning Gap: First of all the strategy refer to the determination of the long term goal and objective of the company to achieve the success. (Stolt, 2010). Most of the time common people come across the companies who have long term goals towards the future with the prospective products and Brands. This long term planning or strategy is for the higher revenue for the future prospects. However, most of the companies think achieving of the long term goal needs the long term strategies to support the revenue and the profit (Coveney, 2003). It has been seen that deliberate strategies are not good for the organization in other hand the emergent strategies are not deliberately bad. The effective strategies have a combination of emergent and deliberate qualities. It has been observed that all strategies combine some degree of flexible learning with some degree of controlling power. One of the most common failures of the strategies is the inability to understand the importance of the organizational learning. The proper strategy planning should effectively help the organizational member to understand the organization and the environment on which the organization is working on. The potential GAP and the resource GAP can be analyzed by SPS design, BCG (Boston Consultancy Group) Matrix and SWOT (Strength, weakness, opportunity, threat) analysis. All of these strategic approaches are basically about bridging the gap between the organizational structure and the profit potentiality of the organization in the existing business environments. It is very vital to understand that a proper strategy means utilizing the optimal resources in the proper time under the proper environment. It is very hard to find all of them falling in the place at the same time, but, that is the challenge for each and every organization. Product Life cycle and strategies: The traditional PLC model is based on some simple assumption. They are (i) all products have limited life cycle, (ii) the sales of a product goes through different and distinct stages and (iii) each of the stages in PLC presents different challenges which signifies the importance of the appropriate marketing mix (Steinhardt, 2010). Product planning and strategies: Products are the main concern in the industrial organizations. The products get maximum attention in the maturity stage in the product life cycle as the future existence of the product is questionable at this stage so, so the marketer tries their level best to expand the lifecycle of the product. Few of the main strategies at this stage regarding the products are 1. Product diversification: That is creating different product variants. For example, Microsoft’s Window 9x operating system kept on extending its product life cycle by introducing Window 95, Window 98, Window 98SE and Window ME. These are the product variants of Window 9x (Steinhardt, 2010). In most of the cases the business organizations like Microsoft tries to sell its major products in a bulk format to the other business organizations. For an example Microsoft sells its operating systems with higher securities to the financial organizations like banks or government etc. 2. New product uses: This is basically a strategy where core product gets applied in different uses. There are many companies are there who are manufacturing raw materials for the end products, and in most of the cases these organizations seek for more usage of the core products as the core product is the factor which generates the revenue for the organization. 3. Changing product layers: This is a strategy where the product features get altered and which leads to a creation of a different product families. This is a change to keep up with the pace in the market and keep updating the name of the company within the business partners. This particular strategy helps the organizations to build the awareness within the potential business partners. Conclusion: From this particular study it is very clear that Business to business organizations are far more different than the Business to customer organizations. The marketing strategies are very limited in this case and relationship marketing plays the vital role. The commitment, trust and performance are the benchmarks for the B2B organizations. In this environment the demand is not created by the flashy advertising rather it is build with the help of suitable social bonding. However, the trade fairs and price promotions are very important strategies to create a win-win situation among the buyers and the sellers. Marketing and branding activities are in lower side in this segment but it is the silent feature of the great success in the industrial marketing. References Blythe J & Zimmerman A, 2005. Business-to-business marketing management: a global perspective. 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