Business-to-Business Marketing Report - Essay Example

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Business-to-Business Marketing Report Word count 2973 – – without list of references and Table of contents (3300-320 words) Table of Contents S.No Heading Page No 1 Introduction 3 2 The Need for a Sales Force 3 2.1 Sales Force Structure 4 2.2 Various Sales Promotional Tools 5 2.3 Sales Force Structure Recommendations for SPSL 5 3 Relationship Variables and Business Networks 7 3.01 How can SPSL Maintain these Relationships in order to develop customer loyalty? 8 4.00 Difference between B2B and B2C Marketing? 10 4.1 Why B2C Marketing is Important? 11 5 Conclusion 14 6 List of References 15 To: Peter and Harvey Blair, SPSL Ltd From:, Ibrahim Rushdie, XYZ Consulting Ltd (fictitious name) 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 “ The Need for a Sales Force” The secret of success of any business depends wholly upon its ability to attract customers and retain them, and sales team helps a company to accomplish this goal. Salespeople markets intricate products and offer solutions to major key accounts with a high magnitude of control over the sales practice. A good deal of social interaction and two-way communication is provided by the sales force with the customers. Sales force listens, evaluate the customer’s requirements, offer solutions, minimise the difficulty, handle complaints, usher value and offer long-run continuing service. For instance, there were over 15 million full-time sales personnel in 2003 in USA. The aggregate of the retail and field sales personnel comprised of 11% of the total full-time workforce with their salary and benefits costing the US economy over a trillion dollars per annum. (Zoltners & Sinha 2004:3). Since the Sales force of a company are assigned with developing of customer relationships, the sales force of a company is being regarded as a powerful driver of revenues of a company. The organisational success is closely associated with the successful functioning of the sales force of a company. On the aggregate, about 10% of the corporate’s annual revenues is being spent on sales forces. Due to close association between sales and profitability, majority of the companies are paying keen interest in maximising sales force effectiveness. (Zoltners, Sinha & Lorimer 2009: 3). A motivated sales force will usher higher sales as compared to an unmotivated sales force. A well-coached, well-trained sales force ushers more sales than an untrained sales force. 2.1 “ Sales Force Structure “ If a company markets a single product to one industry with customers spreading over many locations and in such an event, it is ideal to employ a territorial sales force structure. On the other hand, if a company sells different products to many varieties of customers, it may either engage a product sales force structure or a customer sale force structure or a mixture of both. Under the territorial sales force setup, an exclusive geographic province is assigned to each sales person to market the company’s whole range of products to all customers in that geographical area. Under this structure, each sales person role and accountability are clearly defined. Company with diversified products engages different kinds of products sales forces. For instance, Lear Corporation’s employ outstanding 145-sales force that brings many feats to the company. Lear sales force is good at relationship building and to satisfy customer’s needs. (Kotler 2008:423). American Express ,PepsiCo, and the Hartford Financial Services Group. sales personnel comprise one of the company’s most expensive and productive assets and increasing their figures may increase both revenue and costs to the company. (Kotler 2008:423). 2.2 “ Various Sales Promotional Tools” A company’s sales promotion mix includes a mixture of various types of sales promotional tools employed by it to market its products or services. The chief six sales promotional tools are – advertising, personal selling, sales promotion, public-relations interactive marketing, direct marketing Internet marketing and publicity. Due to the existence of cut-throat competition, now-a-days, business cannot rely on a single sales promotional mix and there is a need to use different kinds of sales promotional tools in various magnitudes. (“Trehan & Trehan 2010: 45”). 2.3 Sales Force Structure Recommendations for SPSL SPSL prides itself on its ability to compete with other firms through its excellent customer service, and fast emergency response time of within three hours to attend a customer’s call. The following sales force structure is recommended for SPSL for its operation in Manchester. SPSL may have the adequate number of sales personnel to promote the sales in Manchester. Further, it has to make periodical advertisement in local newspapers and in the local yellow pages. SPSL should try to offer a unique plumbing service which should be different from its customers like getting accreditation for company’s service from an industry authority and to offer a money-back guarantee to customers if service is not satisfactory. One of the Tesco’s winning marketing strategy is that its customer loyalty reward cards. SPSL should also offer such a customer loyalty program thereby offering future discounts upon works got by referral. As a substitute for engaging sales force, it is highly recommended that SPSL should launch its own website. SPSL should publish some success stories, offer the visitors some plumbing tips on how to keep their plumbing system hassle-free, and there should be a review section where its customers can post their views and recommendations about the SPSL services. SPSL can also publish the photos of its satisfied customers and their feedback on their website. SPSL can organise webinars thereby facilitating its customers and sales forces to interact with each other about any enhancement in services offered. SPSL can use the tracking and analytics tools its website. Tracking means data about SPSLs on-line customers, and this helps to evaluate and measure its marketing performance and to measure the customer satisfaction level and ways and means to enhance its sales. With the help of tracking , SPSL can now know which link in its website are clicked more times, and it can plan its marketing strategy in and around that data. With the help of analytics tool, SPSL can evaluate how many visitors are looking for more information. SPSL can also introduce e-mail campaigns, pay-per-click campaign, local SEO programs and other online marketing strategies to attract new customers. SPSL should also publish in their websites positive reviews’, blog entries, and forum discussions section, about its past deals and upcoming ones. (“Miller 2012:95”). 3.0 Relationship variables and business networks (question 2) Relationship variables and business networks are likely to be important for SPSL when establishing their new office in Manchester. Now, majority of the businesses are concentrating on developing long-term relationships with their customers. Relationship management is a significant development and majority of the B2B brands are being considered as being relationship creators. According to Coviello, Brodie, Danaher & Johnson (2002), B2B marketers are more relational in their approach as contrasted to consumer marketers who have a transactional approach. B2B brand researchers are giving more priority to relationship quality and customer loyalty when assessing the business relationship outcomes. According to Cretu and Brodie (2007), a company’s reputation on customer value and customer loyalty is being given more significance than that of company’s corporate reputation and its brand image contrasting the separate impacts of its customer relationship quality and customer loyalty. As per “Michell et al. (2001)”, sales force relationship and advertising were given secondary preference whereas the marketing variable that created brand loyalty will be given primary significance. (Glynn & Voodside 2012: 253). Companies with successful relationship track records have posted higher revenues. Wright (2004) considered the following variables as a significant factor for successful B2B relationships like complete commitment from all senior managers of the company, strategic fitness, cultural fitness among employees, sharing of risks, proper allocation of risks, and exchange of knowledge. If a company is able to maintain a successful B2B relationship, such company can enhance their efficiency, can simplify the company’s processes and enhance their competitiveness. (Barschel 2007:8). 3.01 How can SPSL maintain these relationships in order to develop customer loyalty? So as to maintain successful relationship, both the acting parties in the organisation should be aware what variable make an impact on its accomplishment. As per Archer & Yuan (2000), successful B2B relationships may result in ad-hoc market relationship, but if they prolong, they may eventually end in more collaborative affiliation. According to Powers & Reagan (2007) , variables that influence relationships are trust , reputation , social bonds, comparison of alternatives , mutual aims , non-retrievable investments , technology , interdependence , structural affiliations , adaptations , commitment and cooperation. According to Rauyruen & Miller (2007), commitment, trust, service quality and satisfaction are the variable that influences relationships. According to Cheng (2006), variables that impact relationship are frequency of contact, longevity, effective and extensive communication, satisfactory and efficient service and personalities and skills of company sales representatives. Thus, many past empirical studies have found communication, commitment, trust, social contracts and co-operation are the variables that influence B2B relationships. According to Hennig-Thurau et al (2002), three rational variables namely trust satisfaction and commitment that mirror the overall relationship between consumers and service providers. (Bagdoniene & Zilione 2013). B2B relationships are intricate and more multidimensional in nature. The business activities are footed upon their relationship with their clients, suppliers, employees, investors, market analysts, trade associations, and government regulators. Business relationships in the long run will result in extensive and strong economic, social, technical and service ties. The success of B2B relationships relies on mutual advantages for the both parties like increasing the value or lower the total costs, posting higher revenue and enhanced competitiveness and is influenced by various variables. The analysis of various previous empirical studies on the subject reveals that success variables associate with B2B relationship dimensions. It is to be noted that all these variables are interdependent and cannot function in isolation and hence, they are not independent variables. (Bagdoniene & Zilione 2013). Hence, SPSL should give due weightage to above mentioned all variables while building its customer relationship. 4.0 “Difference between B2B and B2C Marketing”(Question 3) The crucial aim of the B2C marketing is to translate the shoppers into buyers as consistently and assertively as possible. B2C marketing crusades are more concerned with the business transactions that will be of shorter duration in nature and will try to capture the customer’s need instantly. B2B marketing is relationship driven, it tries to maximise the value of the relationship, it is targeted towards a focussed and small market, it has a longer sales-cycle, it involves a multi-step buying process, on personal relationship, a brand identity is created, it includes awareness and educational oriented activities, and it involves rational buying decisions footed upon business value. Whereas B2C is product driven, it tries to maximise the value of the transaction, it concentrates on a large target market, it involves a shorter sales cycle, it involves a single step buying process, through imagery and repetition, brand image is created, it involves a point of purchasing and merchandising activities, and it involves emotional buying choices footed upon price, desire and status. (Zinkhan 2002:88). By applying 7Ps viz. product, place, promotion, price, people, process and physical evidence, we can differentiate B2C from that of B2B marketing. Since SPSL is a plumbing service provider, under product, it has to offer warranty, quality control and maintain its brand image. Under place, it has to select its outlet location, the mode of transportation and its channel type. Under promotion, it has to maintain an adequate sales force, to advertise regularly, to launch its own website, and to engage in publicity. Under price, it has to offer differentiation, flexibility, and offer discounts for large orders. Under people, it has to maintain the relationship with its customers and employees. Under process, it has to maintain the flow of activities and to make sure that there is customer involvement. Under physical evidence, it has to offer updated equipment and technology, uniform for its employees, to offer guarantees and to use business cards. (Lovelock 2008:24) 4.1 Why B2C Marketing is Important? For those who carry out best marketing efforts focusing on their buyers of products, and services can have a large market share thereby earning of the majority of consumer dollars. It also educates the buyer on how to cater their need and fulfilment of their desire. Amazon.com is the best illustration of B2C marketing. Amazon’s main aim is to offer selection, convenience, price, matching, and achievement to their customers. eFax is another B2C marketer, which functions as an application service provider to its users in the same style by offering software capacity to receive faxes in the customer’s email inbox directly. Emailing campaign and pay-per-click strategies are being used by eFax for its B2C marketing strategies. One another example is eBay which offers C2C business services where it has become a used products’ market place and also offers a big venue for retail businesses and this site also facilitates the manufacturers to offer their products directly to buyers. (Hawk 2004:181). As of today , all retail business starting from hotel ,clothing , food , grocery , sports goods and vacation business are vying for their share of consumers by employing any or mixture of the following B2C marketing tools like Pay-per-Click , SEO strategies , consumer generated media and affiliate marketing. Further, mobile phones are widely used as the B2C marketing platform by using SMS (short message service) and MMS (Multi Message Service) for targeting consumers. (Kim, Park, & Oh 2008 :769). IBM employs about 1200 phone representatives who create about 30% of the aggregate revenue of IBM. These representatives accord spotlight to particular industries and every day, each rep calls as many as 300 customers or accounts. The Climax Portable Machine Tools Company has changed to telemarketing structure instead of using the direct sales force for their marketing. Previously, sales engineers of the company had spent about 33% of their time with the customers, spending time on training the distributor’s sale personnel and attending the customer’s call along with them and hardly make about 4 calls in a day. However, today, Climax telemarketing team deals with 30 calls per day, mainly by following up with business deals created by direct mail and advertising. Climax management is now able to sell high ended machine tools in higher numbers through telemarketing than compared to earlier sales through the distributor network. Online selling has become the order of the day now. (Manning & Reece 2007:43). As per the Office for National Statistics, Internet retail sales account for 10.5% of all retail sales in UK. Weekly retail sales through Internet account for ? 660 million as contrasted with the average weekly retail sales of ? 6,300 m. Further, Internet retail sale is growing fast by 37.5% on a yearly basis while the all retailing sales value remains static. As per Forrester, on-line sales of footwear and clothing accounts only for 8% whereas 41% of sales of computers happen through on-line. As per eMarketer, about 88% of the shoppers prefer to do shopping online instead of traditional shopping as they can shop through online 24 hours a day and 365 days during a year. About 66% of interviewees told that they prefer online shopping as they can shop a variety of products and 54% of them informed that they find the products they want to buy is available only through online, 53% of the told that they prefer online trading as there is no need to deal with sales personnel, about 44% of them informed that they can access better product information through online and 40% of theme replied that they could find low priced products through online. (Armstrong & Gary 2013:470). Email marketing companies like Fishbowl which has established a customized marketing strategy for each of its franchisees to forward their email data base list of their clients. According to DoubleClick research study, about 73% of interviewees answered that they purchased a product through online due to email marketing. For instance, “eBay, Amazon.com, Expedia and Circuit. Cities” are the best examples of affiliate marketing. One another best example of B2C marketing is the Pay-per-Click (PPC) style of marketing. This falls under search marketing where a company will pay an agreed amount for each and every time their ad is clicked by a buyer. These organisations will buy key search engine words in anticipation that they will be used by probable consumers who will visualise them when using their search engines. Some of the illustrations of PPC marketing are Zappos, REI, Altrec and Backcountry. (“Washington 2006: 45”). Nowadays, Social Network has become the prime media for B2C. Social network like Facebook, LinkedIn, and Twitter have attracted many number of users in recent days. One of the main advantages of advertising on Social Network as it offers specialisation of sales promotion oriented on the basis of demographic details offered by the net users. 5.0 “Conclusion” For success of a business, sales force is essential and this is evidence from the fact that American Express, PepsiCo, the Hartford Financial Services Group, Oracle, Microsoft, Cisco and IBM companies spent more than $ 20 billion each year for their sales forces. About $ 800 billion is being spent by all American companies each year on sales force, which is about 3 times the quantum of dollars spent on advertising. Many past empirical studies have found communication; commitment, trust, social contracts and co-operation are the variables that influence B2B relationships. As per eMarketer, about 88% of the shoppers prefer to do shopping online instead of traditional shopping as they can shop through online 24 hours a day and 365 days during a year. According to DoubleClick research study, about 73% of interviewees answered that they purchased a product through online due to email marketing. This demonstrates that B2C marketing is gaining momentum nowadays. SPSL should maintain adequate sales force and should launch its own website. SPSL should publish some success stories, offer the visitors some plumbing tips on how to keep their plumbing system hassle-free, and there should be a review section where its customers can post their views and recommendations about the SPSL services. SPSL can also introduce e-mail campaigns, pay-per-click campaign, local SEO programs and other online marketing strategies to attract new customers. SPSL should also publish in their websites positive reviews’, blog entries, and forum discussions section, about its past deals and upcoming ones. List of References Armstrong & Gary, A. (2013). Marketing: An Introduction. 7/e. New Delhi: Pearson Education India. Bagdoniene, L I & Zilione, R. (2013). Success Variables in Business –to- Business Relationship. [online] available from [accessed 8 May 2013]. Barschel. (2007). B2B versus B2C Marketing. London: GRIN Glynn, MS & Voodside, AG. (2012). Marketing Management: Strategies, Cases and Solutions. New York: Emerald Group Publishing. Hawk, S. (2004). A comparison of B2C e-commerce in developing countries. Electronic Commerce Research, 4(3), 181-199. Kim, G. S., Park, S. B., & Oh, J. (2008). An examination of factors influencing consumer adoption of short message service (SMS). Psychology & Marketing, 25, (8) 769-786. Kotler, P. (2008). Principles of Marketing, 12/e. New Delhi: Pearson Education India. Lovelock, C. (2008). 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