Triangle Creative Ltd - Essay Example

?Topic: Case Study in B2B Marketing - Triangle Creative Ltd Contents 0 Introduction 2.0 Marketing Mix 2 Product 2.2 Price 2.3 Place 2.4 Promotion 3.0 Relationship Variables and Business Networks 3.1 Value 3.2 Trust 3.3 Satisfaction 3.4 Commitment 3.5 Loyalty 3.6 Business Networks 4.0 Structuring the Sales Force 4.1 Strategies on Incorporating New Employees a. Channel Coverage b. Identifying and Organising Roles Around Customer Needs 5.0 Conclusion WORD COUNT = 3,001 words To: David Thorpe and Angela Brown, TCL 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. The report is structured to include three main parts namely the marketing mix, relationship with variables and business networks, and the structure of the sales force. The three parts of the report form the basis of the success of the business during the current economic downturn. The recommendations presented in this report are based on the analysis of the current situation facing the company and are also effective in making sure that the business will manage to create a competitive advantage in the market. 2.0 Marketing Mix According to marketing principles regarding the marketing mix of a given business, there are a number of conditions that ensure the success of the business in its marketing functions (Kalish, Vijay & Eitan, 2005, p. 176). The marketing principles require that a business should at least address the following four conditions: i. The business should have the right product that has the right features such as appearance and functioning. ii. The available products should be sold at the right prices to customers so as to maximize on attracting large numbers of customers that will record huge profits. iii. The product should be sold in the right place and at the right time so as to improve the efficiency of business operations. iv. The business should design and implement the most suitable promotion in marketing the product so that customers will have to be aware about the existence of the product in the market. The company has managed to attract a significant number of customers but the recent market conditions have led to the company losing a number of customers. This requires new strategies in the company’s marketing mix so as to ensure that the company attracts new customers as well as it retains existing customers. The strategy is that the business should consider expanding its marketing mix and making a number of changes on the existing marketing mix (Kemper, 2010, p. 112). 2.1 Product Triangle Creative Ltd should invest more in producing original services to customers as opposed to relying too much on outsourcing. This is because the outsourcing companies may provide services that may not meet all the needs of the clients. The company should improve its production capacity to include the provision of marketing and advertising services. This will ensure that the company has complete control over the quality of its product and makes it easier for the company to redesign its services in the shortest time possible. The best option in this case is that Triangle Creative Ltd should consider merging with PJW Media Production. The advantages of such a merger include sharing of expertise knowledge and access to a wider market (Kiss & Martin, 2008, p. 129). Additionally, IMP literature materials suggest that mergers have the effect of reducing the costs of operations for any business (Kiss & Martin, 2008, p. 132). 2.2 Price The business should consider adopting a different pricing system for its services. Currently, the company is using a rigid pricing system that does not change with the pricing needs of the consumer. The limitation of such a pricing system is that the company is unable to offer price benefits such as discounts and bargains on prices of services. This may be one of the major reasons as to why the company is losing a significant number of customers. Market conditions are changing while the company still maintains a rigid pricing system. This makes it difficult for customers to adapt to the prevailing market conditions because the company’s rigid pricing system does not incorporate the changes in the market in its price structure. Customers are forced to pay the same price despite the reduction in their purchasing power. In such hard economic times, the company should consider using the customer-based pricing strategy. Customers are faced with a tight budget and are willing the least amount possible on services. The company should lower its current prices so as to attract new customers and retain existing customers because the new prices will fall under their budget constraints. Triangle Creative Ltd (TCL) should expect low profit margins when they adopt the customer-based pricing strategy because the prices will be slightly above the costs of operations. This strategy is good for the business because the prevailing hard economic times are present for a short-term period. This strategy should be combined with the introduction of a new service because the company has in recent months recorded lower revenues from mouth to mouth marketing services. One of the conditions that make the strategy to be effective is the fact that customer demand is price elastic (Kalish, Vijay & Eitan, 2005, p. 176). 2.3 Place Currently, Triangle Creative Ltd (TCL) is located in Cambridge with a number of operations in London. Despite the fact that the company considers this to be a central location, there needs to be an expansion in the operations of the company to include new areas that have a large number of potential customers such as Manchester and Birmingham. I would highly recommend that the company establishes another office in Northern Britain because the region has a large population of more than 14 million people. This a potential market for the business hence TCL can grow and remain competitive in the market. Establishing multiple locations for the business will aid in reducing the cost of moving from one client to another because the business will be closer to the customers. The creation of multiple business locations will also ensure that the company brings its services to customers in the shortest time possible. This will improve the level of satisfaction among its customers who will be convinced to continue using the services of the company despite the changes in economic conditions (Lambert, 2002, p. 188). On time delivery also has the ability to attract customers because most of the customers want their needs to be addressed in the shortest time possible. Manchester is a central location in Britain and this implies that the business will be using the shortest channels of distribution when making visits to its customers and potential customers in the market. Triangle Creative Ltd’s staffs have had to commute from Cambridge to London to serve some of its existing customers and target customers. This must have resulted in some delays in delivering the services to the market. It also must have been very expensive for the business to cover for the extensive movement of staff. As noted earlier on, multiple locations have the advantage of reducing costs and bringing the business close to its customers (Leskovec, Lada, & Bernardo, 2007, p. 126). 2.4 Promotion Promotion basically involves communicating with customers in the market. Triangle Creative Ltd has for a long time been relying on a very narrow promotion strategy that involves the word of mouth (Galeotti & Sanjeev, 2009, p. 118). The company should shift its promotion strategies and design an effective electronic marketing plan. The plan will enable the company to go digital in promoting its services because the internet has been consistent in recording large numbers of users. The company should improve on its website and include a customer service that will be responsible for collecting customer requests and making clarifications. The use of internet saves on time and costs of operations because the company is able to reach a wider market in the shortest time possible. The use of internet also eliminates movements from one position to another in terms of addressing customers. One major consideration for the business is placing advertisements on sites with very high traffic such as Google, Yahoo, Facebook and Twitter among others (Lambert, 2002, p. 190). The use of advertisements is one of the best approaches to promoting the product. The effective use of advertising has the benefit of creating loyal customers who recognize the product brand. IMP studies emphasize the use of the hierarchy of effects model in advertising. The IMP literature materials suggest that a business should develop its advertising strategies based on stages such as awareness and knowledge (Festinger, 2007, p. 175). This is to ensure that the business eventually becomes successful in creating a strong brand in the market. 3.0 Relationship Variables and Business Networks The company is currently faced with two major problems that have affected its level of revenues. The major challenges include retaining existing customers and attracting new customers. The two challenges can be addressed effectively by the use of a number of relationship variables and business networks. Customers are the most significant assets of the business and creating a good relationship with customers is the ultimate advantage to succeeding in the market despite changes in the economic environment. Business to business relationship is also important because it is effective in responding to changes in marketing conditions by creating opportunities for individual businesses in the market (Festinger, 2007, p. 180). However, relationships in the world of business are based on a number of variables that include: 3.1 Value According to literature materials on business to business relationships, value has been the fundamental basis for all marketing activities. This is mainly because all parties involved in the relationship expect to gain value (Dodds & Duncan, 2004, p. 200). Additionally, literature materials on customer relationships management also point out that value stands out to the fundamental basis of any relationship existing between a business and a customer. Value can be defined as the overall evaluation by a customer in terms of what he/she receives in comparison to what he/she pays (De, Arnaud & Gary, 2008, p. 122). The above definition of value highlights a number of elements that are very important to TCL. They include trade-offs, quality, sacrifices, prices and judgment. The elements are important to TCL in its efforts to retain existing customers as well as attracting new customers during hard economic times. The relationship variable of value is important to TCL in the sense that it outlines key areas that the business should focus on in order to attract new customers as well as retaining existing ones. The business should focus on creating quality services match its services with the quality of services. This will ensure that customers get complete satisfaction from the price they pay for such services. The company should also consider improving its services so as to improve customer perception about the services hence the business will attract new customers and retain existing ones (Burt, 2007, p. 116). The business should increase interactions with customers so as to get a glimpse of their needs and make appropriate responses. 3.2 Trust Trust is one of the most powerful tools of a marketing company. This is because it enables companies to (1) work hard at maintaining good relationships with customers in the long run (2) lowers costs of transactions and allows flexibility in response to changing conditions in the market. In the case of TCL, the company can enjoy the two benefits mentioned above by making sure that customers trust the ability of the company to address all their needs. Some of the elements of trust include expectations, risks, willingness belief, honesty, dependability and predictability (Coleman, Elihu & Herbert, 2006, p. 100). Just to pick a few of the elements mentioned above, TCL should consider providing services that are consistent with the needs of its customers. The company should also be willing to interact with customers in order to get information on their needs. Another important element for TCL is that there should be very high levels of honesty with regards to the information provided to customers about the services offered by the company. The company should avoid creating non existing information about its services because it only results in the company ruining the relationship it has with customers and other businesses (Lin, 2006, p. 112). 3.3 Satisfaction Satisfaction refers to the extent of a subjective feeling relative to the ownership and usage of a service or product by a customer. It determines how well of a customer is after using a service or a product. Satisfaction is critical in determining future relationships and also indicates areas of improvement in business relationships. Measures of customer satisfaction are important in measuring the level of revenues for a business. They also create foundations for a company’s long term success. In such a case, customer satisfaction is critical in determining the level of revenues for TCL and creating a foundation for its success in the long run. This means that the business has the responsibility of making sure that its customers get the best satisfaction from the use of its services. This will ensure that the company records high levels of revenues and that it becomes successful in the long run despite changing market conditions. 3.4 Commitment Commitment is an important ingredient for organizations that aim at creating successful business relationships in the long run. This is because strong relationships are built on the foundation of mutual commitment (Biyalogorsky, Eitan & Barak, 2001, p. 119). The benefits of commitment include (1) future benefits and cost reductions (2) increase in supplier sales and orders from buyers (3) complying with partner requests (4) signifies the intention to have a quality and influential relationship that develops shared social norms. It is important that TCL creates a relationship based on commitment to customers and other businesses. A committed relationship is important for TCL because it ensures that the company attracts and retains a large number of both new and existing customers. It also ensures that the company receives adequate support in addressing its challenges. 3.5 Loyalty Loyalty is a core variable in a business to business relationship and is based on purposes of creating and maintaining a mutually profitable relationship that will exist over a long period of time. The loyalty of customers is an important aspect of managing marketing functions of a business because it entails a number of elements that are significant to the success of a company. Some of the elements include intention, commitment and action to stay (Libai, Eitan, & Renana, 2005, p. 278). Loyalty refers to consistent and repeated purchase or use of a particular service or product. Loyalty is critical in determining the success of TCL in retaining existing customers to the extent it influences the volume of repeated purchases of the company’s services. Loyal customers have very high volumes of repeated purchases and have an impact of improving revenues for the company 3.6 Business Networks Business networks play a critical role in the ability of a business to improve its business operations. Such relationships can be addressed using four characteristics that include continuity, complexity, symmetry and informality. Most of the business networks have this striking feature of lasting over a long time period say for over ten years. This ensures that partners in the relationship are able to enjoy the assistance of each for a very long time period. TCL can create business networks with other businesses especially suppliers that will last for a very long time hence influencing the company’s competitive position in the market. Business networks also include business partners who have resources and capabilities that in most cases are in balance. This will ensure that TCL gets equal gains like other partners with little chances of exploitation. 4.0 Structuring the Sales Force It is a wise decision for the partners to consider hiring new sales employees who will be working on a full time basis. This will ensure that the meet the growing needs of the company and improve its capacity to handle an increasing number of clients. However, there is the challenge of incorporating the new staff into the existing organizational structure. There are a number of issues that arise with the hiring of a new sales team. First of all, existing staff are likely to lose a number of responsibilities. This is because the company will now have adequate human resources to manage its various tasks. The other challenge is that the organization will have difficulties assigning duties and functions to the new staff given the fact that the organization is hiring a large number of staff. 4.1 Strategies on Incorporating New Employees c. Channel Coverage The company may consider organising its sales and marketing channels based on how customers use the services of the company and the concentration of such customers in the market. The company may assign different channels of promotion to the newly hired sales staff so as to solve the problem of assigning duties. This involves identifying channels such as media, advertising and marketing services and grouping the employees according to the three channels. d. Identifying and Organising Roles Around Customer Needs The market has unique needs such as personalisation of services and direct service offerings. TCL may consider developing a flexible sales organization based on the unique needs of customers. For instance the company may form the direct service department that will be serving customers who require direct services. I highly recommend that the business should consider incorporating the new staff based on the strategy of channel coverage. This is because the business has three channels that have already been identified. This makes it easier for the partners to assign duties because the three channels have been in operation for a long time and are well established. 5.0 Conclusion TCL should adopt a flexible pricing so as to ensure that the company is able to adopt a customer based pricing strategy that can respond customer needs. TCL should also own its services as opposed to outsourcing so as to enable the company address specific customer needs. Multiple locations will be convenient in bringing the business closer to customers hence improving service delivery. The company should also consider adding more channels of promotion such as electronic marketing so as to communicate with a wider customer segment. Relationship variables and business networks are significant to the business because they determine its level of revenues and its long term success in the market. Relationship variables influence how the business should relate with customers and other business hence providing the opportunity for the company to attract new customers as well as retaining existing ones. In the case of incorporating new employees, the business should consider using its channels of coverage in assigning duties. This is because there are already three established channels that will make it easy to assign tasks. References Biyalogorsky, E., Eitan, G. and Barak, L., 2001, “Customer Referral Management: Optimal Reward Programs,” Marketing Science, 20 (1), 82–95. Burt, R., 2007, “Social Contagion and Innovation: Cohesion Versus Structural Equivalence,”American Journal of Sociology, 92 (6), 1287–1335. Coleman, J., Elihu, K. and Herbert, M., 2006, Medical Innovation: A Diffusion Study. Indianapolis, Social Networks, 25 (4), 283–307. De, B., Arnaud. and Gary, L., 2008, “A Multi-Stage Model of Word-of-Mouth Influence Through Viral Marketing,” International Journal of Research in Marketing, 25 (3), 151–63. Dodds, P. and Duncan, W., 2004, “Universal Behavior in a Generalized Model of Contagion,” Physical Review Letters, 92 (21), 1–5. Festinger, L., 2007, A Theory of Cognitive Dissonance. Stanford, CA: Stanford University Press. Galeotti, A. and Sanjeev, G., 2009, “Influencing the Influencers: A Theory of Strategic Diffusion,” RAND Journal of Economics, 40 (3), 509–532. Kalish, S., Vijay, M. and Eitan, M., 2005, “Waterfall and Sprinkler New-Product Strategies in Competitive Global Markets,” International Journal of Research in Marketing, 12 (2), 105–119. Kemper, J., 2010, “On the Identification of Superspreaders for Infectious Disease,” Mathematical Biosciences, 48 (1/2), 111–27. Kiss, C. and Martin, B., 2008, “Identification of Influencers—Measuring Influence in Customer Networks,” Decision Support Systems, 46 (1), 233–53. Lambert, D., 2002, “Zero-Inflated Poisson Regression, with an Application to Defects in Manufacturing,” Technometrics, 34 (1), 1–14. Leskovec, J, Lada, A. and Bernardo, H., 2007, “The Dynamics of Viral Marketing,” ACM Transactions on the Web, 1 (1), 228–37. Libai, B., Eitan, M. and Renana, P., 2005, “The Role of Seeding in Multi-Market Entry,” International Journal of Research in Marketing, 22 (4), 375–93. Lin, N., 2006, Foundations of Social Research. New York: McGraw-Hill. Read More