Business-to-business (B2B) marketing - Coursework Example

?Questions Table of Contents Table of Contents 2 Question 3 Question 2 6 Question 3 10 Question 4 12 Question 5 14 References 16 Question Business-to-business (B2B) marketing describes dealings between businesses which take place in between a manufacturer and a wholesaler or amid a wholesaler and a dealer whereas in business-to-consumer (B2C) marketing transaction takes places between a company and a consumer (Business Talk, n.d.; Raisinghani, 2004). There are various characteristics that differentiate B2B marketing from B2C marketing. Among the number of characteristics, four characteristics have been identified below: Market Size In case of B2B firms, there are small and focused customer base whereas in case of B2C firms, they include huge number of customer base. But if compared in terms of monetary values, then investment from each of the customers of B2B firms are much higher than the customers of B2C firms. Along with this, high customer loyalty can be developed in case of B2C process but it is quite low in the case of B2B (Raisinghani, 2004). Buying Process The buying process of B2B firms is much longer and includes many people whereas the buying process of B2C is much smaller and at times can be a single step process. In case of B2B marketing, customer loyalty is acquired by the word-of-mouth but in case of B2C marketing, it grows by mass adoption process (Raisinghani, 2004). Selling Process The selling processes within B2B and B2C are vastly different. The B2B marketing process includes many efficient and highly trained individuals, distributors and business partners, in order to accomplish the tasks as well as to maintain a good relation with the customers, which can be beneficial in the long run. In B2C marketing process, the selling procedure is very small and highly skilled persons are not essential (Raisinghani, 2004). Reduced Capital Commitment and Less Overproduction As production is usually based on the actual demand, so overproduction does not take place in case of B2C marketing processes but in case of the B2B process, overproduction is necessary to meet the sudden arising requirements of the customers. The production in case of B2B process is based on inventory of accumulated warehouse rather than actual customer demand. As in B2C process production takes place according to the demand of the customer, so less capital is invested as well as less cost is associated with stock keeping operations. In case of B2B process, high amount of capital is indulged in the stock keeping process which brings in the requirement of high investment. B2C marketing process requires less staffs whereas B2B marketing requires large number of efficient staffs (Raisinghani, 2004). From the point of view of a marketing manager of an office supply based company, the promotional media which can be highly beneficial for promoting their products in relation to the above stated characteristics is online media via internet and by newspaper advertisements. If internet is used in the promotion process, then it would be highly beneficial as it would help to attract more customers and increase the market share by endorsing innovative products to the customers according to their needs and wants. This can enhance the brand image as well as the market size of the company. Moreover, it can also be advantageous for increasing the profitability of the firm. In order to increase the customer loyalty and satisfaction, new innovative office supply products with varied benefits according to the needs and wants of the customers should be launched and promoted through both online media and newspaper advertisements. This is required in order to make the customers aware about the benefits of the products and to attract them towards the brand. It can also enhance the market share by increasing the number of purchasing made, thereby improving the profitability of the organisation (Oracle Corporation, 2010). The online media as well as newspaper advertisements can also play a part in the selling process as they can highlight all the benefits and the facilities of the products along with available costs. The selected promotional media can be used to highlight the underlying discounts of the varied products thereby increasing the sales of the products. Moreover, the customers are free to make decisions regarding the purchases. It increases the sales as well as improves the customer loyalty and corporate image of the organisation. Thus, having highly skilled staffs is not required for the organisation as online media can help to create awareness about the organisation’s offerings, which will reduce the operations related cost of the organisation as well (Oracle Corporation, 2010). The online promotional media are highly beneficial for reducing the capital investment as well as overproduction of the organisation. As all the promotional offers can be made available on the internet, so the process of acquiring highly skilled staffs is not necessary. Thus, it reduces the investment of the organisation. Moreover, overproduction is unnecessary as customers place the orders after viewing all the details from websites. Hence, it diminishes the capital invested in the inventory process (Oracle Corporation, 2010). Thus, it can be stated that both online media as well as newspaper advertisements are necessary for an office supply company to share information about their products and to create awareness. Question 2 Supermarkets are the type of large stores that sells a range of food, household, beauty care products, and furniture, sports items and toys among others of varied prices to the customers. The five main factors that can be identified to contribute for the success of a national chain of supermarkets are described below: The supermarkets should always try to utilise innovative approaches according to buyers’ tastes and preferences. The supermarket stores should provide varied ranges of products along with diverse alternatives. Apart from this, the supermarkets should always try to offer competitive value based products to the customers. This is done in order to sustain in this era of aggressive competition. It would help to increase revenue and number of consumers to the supermarkets. Moreover, the supermarkets should always try to remain equipped with updated technology in order to cope up with the changing environment and to sustain in the market for the long run (Mercer, 1996). The supermarkets should include in their assortments both quality and quantity of products in order to provide customer satisfaction and retain customers. It can also enhance the brand awareness and loyalty of the customer. The supermarkets should always attempt to offer excellent customer service as it is very essential to retain customers for the long run. As customer service can only facilitate the supermarkets to sustain and to increase its market share. Moreover, the supermarkets should try to maintain a hygienic and tidy environment in the retail stores so as to attract customers (Deloitte Development LLC, 2010) Thus, it can be stated that the above described factors might facilitate a national chain of supermarkets to sustain in the market among others. It may also prove valuable in enhancing the market share of the supermarket chain in this competitive scenario. The retailer of a national chain of supermarkets can use variety of methods in order to capitalise on the motivation of the customers to enhance its profitability. The methods are stated below: Advertising Advertising is one of the key methods used to increase the profitability and market share. The retailer can execute promotional activities through online media and newspaper advertisements. This would increase the product awareness among the customers and would help to inform about the provided offerings of the retail shop. Enhancement in the number of customer would increase the production thereby boosting the profitability. Branding The retail shop should include both local as well as national brands of the products according to customer choice and preference. Moreover, it should maintain a competitive price in order to sustain among others. Customer Insights and Customer Values The retailers should include products according to the spending patterns of the customers. Moreover, the products should be at par with the tastes and preferences of the customers. This would enhance customer values and beliefs ((Mercer, 1996). Design and Customisation The design of the retail store should always be trendy and attractive in order to attract the customers. Along with this, the retailer should try to satisfy the needs of the customers according to their demands. For example, the retailer can offer need based products or services to the customers (Mercer, 1996). Marketing The retailer should always try to create visibility of its products in a suitable manner by providing special offers which can attract different target customer groups. For instance, special offers on the new launch of anti-virus packs for teenagers and youths (Mercer, 1996). Marketing Research The retailer should always be aware about the changing trends of the markets in order to sustain in the long run among other competitors ((Mercer, 1996). Innovative Technology The retailer can offer the opportunity of placing the orders of the products through internet along with payments by internet banking. It can assist the customers and the retailer in terms of reduction in the service cost. For example, the retailer can offer special scratch cards including attractive discounts on specific point’s accumulation, which can provide extra benefits to the customer. Thus, the retailers should implement new business strategies, shared with the radical reformation and varying demographics, in order to sustain in the market and increase the profitability. (Mercer, 1996) Question 3 Market segmentation is defined as a concept of marketing which is used for distinguishing the consumers with identical needs of products or services and are separated into groups with different categories. The main objective of market segmentation is to target the exact customers with the accurate products or services and to acquire the maximum rate of return for a product. Along with this, it also facilitates in reducing the operating expenses of an organisation thus improving the productivity by understanding the customer needs. Moreover, it enhances the market share as well as target customers’ loyalty towards the specific brand (Kotler, 1994). Market segmentation is very essential for an internet service provider company as it helps to analyse the target customers and the specific needs as well. Moreover, in order to achieve customer satisfaction, customer loyalty and customer retention, market segmentation is important for the internet service providing company. Furthermore, segmentation acts as a tool for sustaining in this competitive market scenario. The various tools utilised while segmenting the market of the company are described below: Price The internet service provider can target the customers with certain attractive price packs in downloading capacities such as downloading quantity in a month (Croft, 1994). Facilities Combo packs facility including films, songs and games with high intensity of downloading speeds can be the other important aspect. It can also provide extra facility by offering free antivirus along with a year subscription (Croft, 1994). Needs and Concerns of the Customers The company should develop and promote the products according to the needs and the preferences of the customers of the prevailing region, for instance, in a region with high craze for online games among the teenagers, the service provider can intend to provide high speed internet service to cater the need of the customer segment (Croft, 1994). Identifying the Target Customers The prime responsibility of the company is to attract the target audiences so that their needs and interests can be fulfilled by the company in an efficient manner (Croft, 1994). Customer Grading Among the Segment The strategy of “grading” and “segmentation” are often used by the marketers as inter-changing aspects. It is done to estimate the availability of revenue in a particular segment and also facilitates to find the responsive customers towards the offered products (Scholar Link Research Institute Journals, 2011). Comparing the Customer Needs with the Company Strength In this era of globalisation, the prime needs of the customers if segmented on the basis of demographic variables such as age, gender, lifestyle, family size is the facility of 3G, high speed internet, wide range of IT services and extensive facility of download among others. Thus, the company’s strengths should tally with the needs of the customers in order to improve its market share and growth. For example, the company should try to offer movie download facilities for the users with download speed of around 3MBPS (UPC Broadband N.V., 2010; Accenture, 2003). Proportion of Potential Return The products or services should be launched in order to optimise the operational distinction of the company by offering quick, reliable and quality service to the customers, which can augment the return of the invested capital (Oxford University Press, 2011). Question 4 Based on the Ansoff Matrix, a garden furniture manufacturing company should intend to penetrate the existing market with products, for example, garden umbrellas, and ‘patio’, a set of tables and chairs, plastic tables and chairs among others at a cheaper price in order to sustain its position in the competitive environment. The company should try to develop new products such as aluminium furniture and wrought iron innovative designs including long tables, set of outdoor tables and chairs through extensive promotions on internet and newspapers in order to attract new customers which would increase its brand image and position in the market among other competitors. It should also offer special discounts on distinct categories of furniture to increase customer loyalty. If the new launched products can attract the customers of the domestic market in which the company is working, then it would try to penetrate the international markets following the same strategy of extensive promotion and discounts for future growth and sustainability. Moreover, the company should try to differentiate from its common product lines of garden furniture category towards the trendy household furniture. This would increase the product lines as well as provide greater prospect of success for the organisation. Product diversification would help to enhance its target customers and the future market image as well (Dobbies, 2011). Ansoff Matrix Market Penetration: Through existing products such as garden umbrellas, ‘patio’ at a cheaper price in the existing market Product Development: By providing aluminium furniture and wrought iron furniture like set of outdoor tables, chairs in the existing market Market Development: Through online media and newspaper advertisements and discounts offering descriptions of the new products Diversification: Normal household furniture Question 5 In B2B business scenario, the purchase decision is not a solo effort but it is rather a group decision. In B2B business, every situation is different from the other. The influences that the corporate buyers have in a B2B situation are stated below: Corporate Information It is one of the fundamental factors which are considered by the corporate buyers while making the decision for purchasing. Moreover, the buyers would analyse the quality and the competitiveness among others in order to judge the underlying benefits. Rules and Regulations The corporate buyers would also examine the rules and regulations of the international market. Along with this, there may be certain specific legal activities as well which can also influence the corporate buyers. Hence, it can be well adopted by the business which can facilitate it in the long run. Integration Integration factor is also very important. It helps in appropriate framing of the products or services in the B2B market scenario so that it facilitates in sustaining among others. Economic Pattern Since the economic patterns of the countries vary from one to the other, so it is one of the significant reasons which can influence the corporate buyers. Values The values of the customers also affect the corporate buyer’s decisions in a B2B situation as customers are the fundamental elements of any business organisation. Therefore, the buyers need to provide highest preference to the values and the beliefs of the customers. As a result it leads to both customer loyalty and sustainability of the business (Brown & et. al., 2010). Cultural Practices The diverse culture of different countries might also affect the corporate buyers in B2B situation. Adoption of the varied cultural patterns is a challenging factor for the corporate buyers in the competitive scenario (Brown & et. al., 2010). In relation to the provided scenario, a specific government department is selected, which is as Financial Services Authority in the UK government. If the head of the Financial Services Authority of the UK government analyzes the need to purchase computer equipments then the factors which should be considered while selecting the supplier are stated below: Corporate Image of the Supplier and the Company While selecting the supplier for the purchase of computer equipment, initially the corporate image of the supplier of the product should be scrutinised and evaluated from the available options in the market (Institute National De Recherche En Informatique ET En Automatique, 2003). Quality The next decision making factor which should be examined is the quality of the products including the offered product quality of RAM, processor, hard disk and operating system among others so that the installed computer might include the recent updated technology in it (Institute National De Recherche En Informatique Et En Automatique, 2003). Price Price is the other fundamental factor which needs to be analysed while finalising the deal of purchase. In order to get the best deal, the cost should be evaluated with other competitors in the market (Institute National De Recherche En Informatique Et En Automatique, 2003). References Accenture, 2003. Telenor. Client Profile. [Online] Available at: http://www.accenture.com/SiteCollectionDocuments/PDF/hp_telenor.pdf [Accessed January 09, 2012]. Business Talk, No Date. 7 Key Differences between B2B and B2C. Database Direct Marketing. Brown, B. P. & et. al., 2010. When Do B2B Brands Influence the Decision Making of Organizational Buyers? Conceptual Background and Theory Development. Croft, J. M., 1994. Market Segmentation: A Step-By-Step Guide to Profitable New Business. Routledge. Deloitte Development LLC, 2010. Deloitte. Enhance Customer Value through the Store’s Employees. [Online] Availability at: http://Www.Deloitte.Com/Assets/Dcom-Ireland/Local%20Assets/Documents/Consumer%20business/Ie_CB_Retail_Store%20Associate_060410.Pdf [Accessed January 09, 2012]. Dobbies, 2011. Garden Furniture. Explore Dobbies Garden Centres. [Online] Available at: Http://Www.Dobbies.Com/Mercer/150-To-199,99/S/C/P [Accessed January 09, 2012]. Institute National De Recherche En Informatique Et En Automatique, 2003. Supplier Selection Problem: Selection Criteria and Methods. Decision Criteria. Kotler, P., 1994. Marketing Management Analysis Planning, Implementation and Control. Prentice-Hall. Mercer, D., 1996. Marketing. Blackwell. Oxford University Press, 2011. Market Segmentation and Positioning. Positioning Is Not What You Do To A Product; It Is What You Do To The Mind Of A Prospect. [Online] Available at: http://www.oup.com/uk/orc/bin/9780199290437/baines_ch06.pdf [Accessed January 09, 2012]. Oracle Corporation, 2010. Oracle Retail. How to Win Customers and Increase Profitability. [Online] Availability at: http://www.oracle.com/oms/retail/win-customers-profit-072011-433023.pdf [Accessed January 09, 2012]. Raisinghani, S. M., 2004. Business Intelligence in the Digital Economy: Opportunities, Limitations and Risks. Idea Group Inc. Scholar Link Research Institute Journals, 2011. Market Segmentation: A Tool for Improving Customer Satisfaction and Retention in Insurance Service Delivery. Journal of Emerging Trends in Economics and Management Sciences. UPC Broadband N. V., 2010. UPC live broadband. Services. [Online] Available at: http://www.upclive.com/ [Accessed January 09, 2012]. Read More