B2B and Reseller Markets - Coursework Example

B2B and Reseller Markets The report is based on describing business issues that should be faced by Airslash while serving its potential customers. Airslash is an air courier organisation, which aims to deliver valuable or urgent packages to its clients. It follows business to business (b2b) model and since its establishment, the organisation has formed an enlarged client base who uses its varied services on a frequent or occasional basis. However, the business of Airslash is quite small and faces immense business market competition with other global players namely DHL, Federal Express and UPS among others. Thus, the report provides a view about which business relationship the organisation should develop by taking into concern the theories of business relationship and b2b marketing. Table of Contents Introduction 4 Business Issues in B2B Customer Relationship 4 Analysis of Customer Problem and Management of Relationship 6 Conclusion 8 References 10 Introduction Every successful business is established on the basis of solid and progressive relationship with the customers. The origin of business relationship has been traced back to the 19th century and since then the idea of business relationship has changed considerably. Traditionally, b2b market is dependent on encompassing the predominant view of consumer marketing. It was fairly unsophisticated approach, which was subjected towards manipulation of certain marketing variables such as products, price and promotion among others for raising desired rate of returns. The viewpoint of customer relationship was overwhelmingly adversarial and short-term in nature. However, after 1990s, it was appreciated that such aspect does not satisfactorily reflect the intricacies of how b2b market perform. Rather, it was argued that b2b marketing is long-run in nature and involve proper relationship between buyers and sellers to reap mutual advantages (Buttle, 1996). Business Issues in B2B Customer Relationship Unlike b2c model, customers in b2b model are basically organisations or companies, which signify that there are few customers for Airslash to serve in its respective market. However, it is worth mentioning that although there are small number of customers, they make large amount of purchases and the purchasing procedure is quite complex in nature. Besides, in comparison with business to consumer (b2c) customers, relationship in b2b customers are quite close in nature. In general, Airslash can develop two types of relationship with its customers namely transactional or cooperative. In this similar context, transactional relationship comprises timely interchange of basic services for extremely competitive prices and cooperative relationship constitutes strong ties established over times with the aim of accomplishing shared advantages. In b2b model, customer relationship is regarded as a strategic procedure of establishing profitable relationship with them in order to generate greater value. However, before deciding which customers Airslash should serve, the organisation should face the following business issues (Hutt & Speh, 2012). Sales Force Management: Sales force is the exclusive position of upholding close relationship with customers, therefore having the capability to develop long-run relationships. Sales force management is entrusted with the most vital asset named customers. Owing to reduced market effectiveness, it would be highly challenging for Airslash to effectively manage relationship with the customers and satisfy them while maintaining low level of expenses (Kumar & Reinartz, 2012). Customers’ Experience: The experience of customers with respect to air carrier services is the other vital issue, which Airslash should face at large. Due to the emergence of several network channels, the information about the services of organisations are accessible to the customers. Thus, such information would readily influence the brand image of the organisations at large (Ford & et. al., 2006). Determination of Customers’ Actual Value: Evaluating the actual value of customers is vital for deciding which customer segment to serve. It would provide important perception regarding crucial customer segmentation and related profitability and ultimately value of customers to the business of Airslash. There are three key issues with respect to determining the actual value of customers to the business. The first issue is defining the expenses to serve customers. It produces information regarding the actual cost of serving individual customers of Airslash by quantification of specific business activities and overhead consumption. The outcome would provide strong insight about business operations and short-run decision making. The second issue is profitability. Profitability issue signify the value of the services, expectations of customers, service delivery time and other extensive overhead expenses across Airslash’s entire customer set. Profitability would assist in segmenting the customers on newly recognised customer set. Ultimately, it allows making decisions that minimise service delivered to the customers and adjust the pricing of services ensuring enhancement in profitability without compromising the positive relationship. The third issue is supply chain prospect. The supply chain activities often help to understand the organisational coverage with respect to services provided to the clients. Irrespective of the fact that most of the primary expenses of Airslash are related with supply chain, the core valuation would determine customer profitability (Ford & et. al., 2006). Analysis of Customer Problem and Management of Relationship Power: The relationship persisting within b2b environment is mainly characterised by power and dependency. Power in business relationship is a key aspect, which results in the destruction of relationship or enhancement of the same. It is worth mentioning that the factors like market structure, termination expenses and advantages are key aspects that impose extensive impact on power balance in business relationship. Unbalanced power in b2b relationship can lead to positive and negative outcome based on the factors like type of business, services, degree of adaptation and market competition (Johansson & et. al., 2004). Concerning the factor of market structure, it can be stated that customers obtain less power on the business relationship if the market is characterised by few suppliers. Since, there are several suppliers of air cargo services, Airslash would have less power over its customers and thus it would be easy for certain customers to avail the services of Electroparts and The Red Cross. In this similar context, customers obtain less power over business relationship, if the termination expenses are high. In this context, it can be stated that since there lays the existence of several large players in the air cargo segment, the termination expenses are low for the customers. On the other hand, the customers become less powerful in a business relationship if the business benefits are high. Thus, in order to maintain the business relationship with such powerful customers namely Electroparts and The Red Cross, Airslash require offering better as well as quality services with affordable cost in order to address the problem of power (Johansson & et. al., 2004). Commitment: Commitment is regarded as a central aspect in maintaining long-run relationship. A relationship often becomes significant for both the organisations and the customers, if they are able to make more commitment in order to carry out the relationship effectively. By evaluating the customers of Airslash, it can be apparently observed that Strategov, Conway and Mcmichael are highly committed towards using the cargo services. They are viewed to be repeat customers and tend to use the services in future. Thus, Airslash require maintaining better relationship with these customers. One key aspect of maintaining good relationship is to establish and develop better communication. Regular interaction is essential for Airslash in order to establish and maintain high level of commitment and loyalty. Furthermore, Airslash also require ensuring that its services are concentrated on satisfying customers’ requirements. On the other hand, it is also essential for Airslash to measure the satisfaction level of the customers. It would be profitable for Airslash to gather information regarding the customers and monitor the satisfaction level. It would certainly help the company to maintain high standards of services and take better care of the customers. Besides, from time to time, Airslash also require benchmarking its services from that of its other competitors. It would certainly provide valuable insight about what can be done in order to perform better and make the customers more committed. In addition, constant feedback ought to be taken from the committed customers as a part of forming as well as developing a mutual and loyal relationship. It would thus provide opportunities for Airslash to make broader improvement in the services that are offered to the customers (Johansson & et. al., 2004). Trust: Trust is the central factor for any business relationship. In b2b model, both parties attempt to minimise any sort of uncertainty and have the desire to improve collaboration. In this similar context, it can be apparently observed that most trustworthy customers of Airslash are Strategov and Williams, Russell and Williams. These two customers transport urgent documents and files through using the services of Airslash, which signify high level of trust. Thus, in order to maintain trust, there lays the need for having high level information exchange between Airslash and these customers. Furthermore, Airslash also require adopting certain effective strategies for enhancing its reputation in the air cargo market. This would help to put trust on the services of other customers served by Airslash. Moreover, the employees should also be trained in order to maintain better relationship with these types of customers. They are required to understand the level of communication and operational procedures in order to retain these customers for a longer time period. Ultimately, as a part of maintaining better trustable relationship, there also lays the requirement of utilising the pioneering technologies in a better way. This would certainly assist the company in maintaining proper database with every type of customers and the way to serve them in a better manner (Johansson & et. al., 2004). Conclusion Based on the above analysis and discussion, it has been apparent that there are several issues, which can be faced by Airslash while deciding which customers the company would serve. However, these issues can be resolved through pursuing proper business relationship management techniques. Thus, Airslash would require planning the business relationship by considering the individual abilities and resources. In every level of business relationship, there is need to develop proper communication and maintenance of trust through delivering timely and affordable services. In this regard, Airslash also require defining its primary customers based on which the services should be focused on. The decision is subjected to the ability of organisations, customer experiences and value of customers. Thus, it can be concluded that proper identification of the business relationship, which is worthy to develop would certainly assist in providing greater customer focused services, resulting in attaining the predetermined targets of Airslash at large. References Buttle, F., 1996. Relationship Marketing: Theory and Practice. SAGE. Ford, D. & et. al., 2006. The Business Marketing Course: Managing In Complex Networks. John Wiley & Sons. Hutt, M. & Speh, T., 2012. Business Marketing Management: B2B. Cengage Learning. Johansson, M. & et. al., 2004. Factors Influencing Customer Relations in B2B. Kristianstad University College. [Online] Available at: http://www.diva-portal.org/smash/get/diva2:229601/FULLTEXT01.pdf [Accessed May 03, 2014]. Kumar, V. & Reinartz, W., 2012. Customer Relationship Management Issues in the Business-To-Business Context. Business and Economics, pp. 261-277. Read More