Business to Business Marketing - Assignment Example

Business to Business Marketing 1. In business-to-business markets, leading-edge firms, such as Dell or Baxter Healthcare, demonstrate special capabilities in managing the purchasing function in a way that advances corporate performance. At a fundamental level, these firms understand the cost and value of a good or service to the firm. First, describe and illustrate the "total cost of ownership" concept. Next, describe the levels of procurement development that firms demonstrate in the business market. http://en.wikipedia.org/wiki/Total_cost_of_ownership The concept of total cost of ownership (TCO) was developed in 1987 by Bill Kirwin. It was conceived in order to assess the exact cost to own and manage an IT business. This concept is still used for ascertaining the cost information of any business including IT. According to it cost consists of direct and indirect costs. Direct cost is identified as cost of labor and capital whereas indirect cost is intangible and is difficult to measure. TCO aims at the installation cost of a business altogether. It can be termed in short as “total cost of operation.” In other words TCO determines the economic value of the investment. In the business market procurement is made at different levels. It is effectively used for processing business value and business strategies. To get the business value, procurement has to be focused at proactive business capabilities. When we take into consideration the procurement strategies put forward by IBM it could be clearly seen that the first priority was given to category strategies to support business strategies. The IBM identified key global procurement strategies and sought the help of another company to ascertain whether its personnel were skilled enough to implement the strategies. Subsequently IBM went for a partner in the oil and gas industry who was experienced in the development of procurement including training of personnel. They launched This Coursework About Course Called Business to Business Marketing 3 “Capability Accelerator Program” which developed the professional skills of their global work force. As a result of this modus operandi there was an optimum level accuracy in satiating the company objectives. 2.Using an illustration of your choice, describe the factors that might move a purchasing manager to shift from a straight rebuy to a modified rebuy. Next, describe the steps that should be taken by both the "in" supplier and "out" supplier as a modified rebuy situation develops. http://en.wikipedia.org/wiki/Dell http://www.thehindubusinessline.com/businessline/2000/09/28/stories/112802c3.htm http://www.drkayfmu.com/topics/business_to_business.htm In a company the purchase manager is the key person responsible for buying operating items and supplies including installations. Before making a purchase he has to analyze the different aspects of the buying situations such as status and standard of awareness of the decision makers, the alternatives in front, the uncertainties and the quantum of the required intelligence in order to take the buying decision. In this context we have to categorize buying into three classes. The first one is new task purchase, the second is modified rebuy and the third is straight rebuy. In new task purchase the purchase manager may not have prior knowledge or experience with the product or service he is going to purchase. A modified rebuy means the buyer has some awareness of the product that he intends to purchase whereas a straight rebuy means the purchase of different parts, maintenance and repair, operating things and supplies. Sometimes the purchase manager has to shift from straight rebuy to modified rebuy. It happens when he faces challenges due to internal politics and difference in decisions by the individuals engaged in it. Also coercive power between the customer This Coursework About Course Called Business to Business Marketing 4 segments and marketers influence the manager for the shift. Personal relationships in business marketing have a strong say in shifting from straight rebuy to modified rebuy. Products meant for straight rebuy are shifted to modified rebuy when revised thinking generates on the product that it could be replaced by a better product. Anticipation of problems may force the change from straight rebuy to modified rebuy. When alternative offers of suppliers are evaluated a modified rebuy may happen. For firms like Dell a PC is a straight rebuy but if the Company is longing for long years of leasing the situation may change to modified rebuy. 3. Evaluate this statement: "Internet marketing objectives resemble those that are associated with any type of communication strategy in the business marketplace." http://en.wikipedia.org/wiki/Online_marketing In business market place communication strategy has a key-role in the marketing of business effectively whether it is B2 or B2C. Prior to the launch of Internet, marketing was done by advertising through print and electronic media. On the advent of Internet a sudden boom was seen in business marketing. The communication strategy, then, underwent several stages of evolution and transformation and even transgressed to the extreme for getting monopoly over the competitors while marketing business-to-business and business to end-customers. Earlier, marketing was limited to a certain class or target. Now, the facility to communicate to millions at a time through a single message brought radical changes in the concept of marketing strategy. The strategies of Dell and Baxter are worth mentioning here. Marketing business through internet, which is also known as online marketing, got the same impact, and even more, than any other system of communication because internet marketing is viable, personal and covers a large sect of targeted group. It is cost effective and earns instant attention. It is global, reactive or This Coursework About Course Called Business to Business Marketing 5 responsive. The value of Internet marketing can be assessed within a short span of time, which is beneficial to strategy developers. They get feed back then and there. Therefore, Internet business marketing not only resembles any other type of communication but also edges out to a great extent. The interactive nature such as response and no response are the characateristics of Internet marketing. However, it creates problems for the companies and consumers. It does not allow customers feel and try on goods before purchase. To face this problem some companies have formulated return policies. Another inconvenience is inadequate electronic payment methods. 4.You have been asked to give a presentation to a group of food manufacturers that serve the institutional market (for example, universities, health care facilities). The title of your speech will be "Segmentation: The Path to Profit in the Institutional Market." Describe particular bases of segmentation that would fit this presentation and this specific audience. http://www.ephmra.org/main.asp?page=533 http://www.trinity.edu/rjensen/000aaa/thefuture.htm#Introduction Segmentation is the main aspect of marketing strategy. It applies to every form of business whether it is food industry, universities or healthcare. Without segmentation no company could survive and be successful in the present-day economic terms. Everybody knows the society of ours is changing. It undergoes changes each moment. What catapults this change? How this happen? If individualism, racial integration, difference in sex, the present family set up, work and its conditions, social stratification, value based thinking, profit motivation, industrialization etc. cause this change what should we do to cope with the change? The answer is simple. Segmentation. For, segmentation is the only way to make a firm successful. It is the path to profit and betterment. This Coursework About Course Called Business to Business Marketing 6 Quality and reliability are the main goal of industrial concerns. These are instruments for the segmentation of the business activities. According to Wind and Cardozo, segmentation is defined as “a group of present or potential customers with some common characteristics, which is relevant in explaining (and predicting) their response to supplier’s marketing stimuli.” (Hutt & Speh, 2001). Through segmentation the needs of the targeted customers can be concentrated in order to bring in organizational response and more business to the Company. Let’s take the case of food processing. Earlier it was limited to food preservation, packing and transportation. Food processing was meant salting, curing, curdling, drying, pickling etc, then. Now thousands of varieties of food products are available in the market. The segmentation in this field has brought innumerable changes in the attitudes of the companies and became consumer oriented, resulting in more profit to them. Well-known brands like KFC and Coca Cola have profited millions of dollars due to the segmentation strategies. 5.Compare and contrast the different quantitative sales forecasting techniques that are used by business marketing managers. Be sure to note the strengths and limitations of each. http://www.clickz.com/3622909 technique http://va-interactive.com/inbusiness/editorial/sales/ibt/sales_fo.html#1 Forecast techniques used by the business marketing managers give an evaluation of the quantum of past sales, present sales and the growth in sales. This helps them to affirm their marketing policies and monitor prices and operating costs and overcome problems that arise in the marketing. This Coursework About Course Called Business to Business Marketing 7 Forecasting techniques in the business marketing can be classified into two. They are quantitative and qualitative. Here quantitative methods are split into two. One is time series and the other is explanatory. Time-series forecasts are based on data. In this technique data is used as input of forecasting data. This technique was used conventionally for evaluating the effect of marketing activity on brand awareness. It is simple in its practice for accuracy over a short term. In this case if a business marketing manager has to forecast the monthly sales data, he must use 12-month average where the forecast for the coming month is the average of the past one year. Each data point has equal importance in making the forecast. The problem in this forecast technique is that the simple average method will not always work effectively due to seasonal change. In that case exponential smoothing technique is useful. In this technique importance is given on the most recent data than on the historical data. If there is a shift in the data recent observations are used to build the forecast. These two forms of forecasts are usable in software like Excel. This is the main advantage of time-series techniques of forecasts. They are very simple to understand and cheap and are used in consumer goods marketing. Explanatory forecasting techniques reveal changes in the sales. Also it shows the change in brand awareness, new registration etc. 6.For a strategy to succeed, individuals in a company must understand and share a common definition of a firm’s existing business concept. For example, ask any employee at Dell and they will tell you about the "Dell model" that sets them apart from competitors. A critical component of a business model is the core strategy. Describe the key elements that are involved in setting a core strategy. http://www.watsonwyatt.com/asia-pacific/topics/htrender.asp?ID=16508 http://www.1000ventures.com/business_guide/im_leadership.html This Coursework About Course Called Business to Business Marketing 8 Each and every individual working in a company is bound to be a part and parcel of it. They must represent the firm and be aware of its business concept and strategies. Then only the company and its strategy become successful. Analyzing a successful company’s profile it could be seen that the company exhibits a business model of which the critical component is the core strategy. Multi national companies like Microsoft, IBM and Baxter have developed a model of their own and the very model is their core strategy in the business marketing. The main elements in setting a core strategy are identified as up bringing employees’ skills by means of applying human capital strategies and establishing competency models and inventing the technique for leadership development. The organizational structure of the company must be well designed and performance management should be made effective and rewarding the achievements of the employees. A culture should be imbibed in them by setting up core values so that the employees shall be committed to the company. Frequent enquiry regarding the welfare of them will naturally boost the company’s profile. In nutshell the key elements are: 1. Maintaining an internal alignment 2. Evaluating the relationship with the potential partners 3. Building up a high potential workmanship 4. Establishing firm rules for harmonic working conditions 5. Employing efficient and understanding managers who could take the employees in confidence 6. The co-operative corporate having good vision 7. Excellent management of partner relationships 8. Capacity to manage changes in business relationships and to bring new ones This Coursework About Course Called Business to Business Marketing 9 7.Some experts emphasize that since customer needs are becoming increasingly homogeneous worldwide, the opportunity exists to sell the same type of product across countries and to use essentially the same marketing strategy around the globe. If customers respond favorably to a strategy in St. Louis, will the same strategy work in London or Tokyo? While a standardized approach might work for Coke or Levi's, will it work for business marketers like Dow Chemical or Hewlett-Packard? Explain. http://www.indiadaily.com/editorial/4310.asp The customer needs are becoming homogeneous world wide. Due to the most advanced and high-tech communication facilities available now, a purchase culture has evolved among the different sect of people of the world. It has become feasible to sell the same product at the same time across countries. But for a powerful and effective marketing of the product at different places, distinct strategies must be adopted. Otherwise the company will not receive the anticipated response from the end customers. For instance, the favorable response of American customers to a strategy developed and executed by a company may not be accepted in London or Tokyo. It is because of the difference in culture, geographical preference, the purchase culture, and perception of the people of that place. Let’s take the case of Kentucky chicken of KFC Corporation. It’s true that it has great demand all over the American continent and Europe. Such a company, having around 1100 restaurants in 80 countries, when entered the major cities of India, people protested sharply. Consequent upon this, the Company was forced to close their outlets in Bangalore. The government intervened and banned the sale of Kentucky chicken. This happened not because the people were not interested in buying their chicken, but because of the lack of a proper and distinct marketing strategy for this region. The latest example was Coca-cola. The protest against Coca-cola in the small state of Kerala took momentum and even reached the universities of America, which resulted in the closure of Coca-cola here in India. Strategies of these companies favored elsewhere were rejected by the people of India altogether. This proves that the same business strategy will not always be successful everywhere. This Coursework About Course Called Business to Business Marketing 10 8. Along with consumer-goods names like Nike or Coca Cola, the world's most valuable brands include high-tech representatives such as Intel, Hewlett-Packard, IBM, and Microsoft. Describe the attributes of a strong high-tech brand. http://www.marketingplanbuilder.com/product.php#6 The most important attribute of a high-tech brand is positioning. It covers product, pricing, distribution, packing, name, publicity and promotion. Positioning is the element that distinguishes a company from its competitors. It projects the brand to a great level.  The most valued asset of a company is its brand. Companies give premium for the goodwill of a trusted brand. It is a great task to develop a brand name but when developed it becomes invaluable. It could be relied upon. As such priority should be given to build up a good brand name. Successful marketing of a company depends upon the brand name. The brand image, otherwise known as brand personality is the trust one put on a brand name. The attributes to it are reliability, quality and money value. Brand communications such as advertising, promotion, service and packaging can improve the brand image. For branding a good logo is required. Conceiving a brand name and getting its copyright and its registration are time consuming. Packaging protects the product and invites the attention of the customer. As such packaging is an attribute to the brand name. The design, color and display of the logo, usage directions etc. are very important in the case of high-tech brand. A good brand will not change the overall design of the packaging frequently as it creates adverse perception in the minds of the consumers. 9.A universal or global product assumes that the needs of organizational customers are the same across countries. When this assumption does not hold true, what strategy options are available to the international product strategist? http://www.pragmaticmarketing.com/publications/magazine/3/4/0508ec This Coursework About Course Called Business to Business Marketing 11 The assumption that the needs of the organisational customers on international level are same does not hold any roots. The needs tend to change from country to country. Due to this the international product strategists face challenges in developing marketing strategy for an international product. As planning and its execution are the basis of the product strategy if any one of it fails the whole product strategy may fail. The economy and the competition in the international market will reflect on the product strategy. To avoid this catastrophe a realistic product strategy is conceived collaborating the multiple wings of the company without jeopardizing the functions of each wing. The product strategist will acquire a vision to incorporate the findings about the strategies of the competitors and new products that come in the global market and become aware of the market trends and market forecasting. There will be proper funding and excellent utilisation of human resources, technology and access to the international market. The product strategy will be buiild up in order to meet the requirement of his Company. Additonally, the strategist will find out an effective way to collect information about the market situation of the destined country or province prior to the development of the marketing strategy and harmonize the various corporate functions. 10. Successful new product creation is a collective achievement that requires the energy and commitment of multiple functions in the organization. Often, however, managers who represent different functional areas hold sharply different views concerning the course that product development should take. Discuss the source of this conflict. This Coursework About Course Called Business to Business Marketing 12 http://en.wikipedia.org/wiki/New_product_development#The_process http://links.jstor.org/sici?sici=0143-2095(199222)13%3C111%3ACCACRA%3E2.0.CO%3B2-I In an organization a new product is developed by the co-operation and collaboration of various functional wings such as research and development, finance, administration, HR etc. During the process of development of the product, managers of different functional wings may hold different views. One reason for such views is the anxiety whether the customer in the target market get any gain from the product. They doubt about the feasibility of the product and the profit of the company. Prior knowledge of the recent disaster on the marketing side of another company or its products and the failure of their marketing strategy might have influenced him in holding such a view. The finance wing manager may even go beyond a step and would express his concern about the unnecessary large funding for the project. The personnel manager may not be satisfied with the existing resources of the work force. Others may question about the marketing and the engineering details. Lack of faith, trust and confidence in the work force and short of firm belief and positive thinking about the features of the product and want of adequate information about the possible reaction when the product is launched, the concern about the marketing strategy and fear of prototyping the product etc. are the reasons for their different views. These arguments prove baseless when the product development becomes successful. 11. Describe some of the key factors that might prompt a company to use a company-organized sales force for foreign sales rather than relying on intermediaries. http://www.altfeldinc.com/pdfs/salesforce.pdf Marketing of a new product is very tough due to the increased competition in the business market. Earlier, intermediaries were the main elements in the field of marketing. But it gave way new trend due to globalization. The organizations engaged in the production started to This Coursework About Course Called Business to Business Marketing 13 set up their own sales team and trained them with modern high tech modalities in order to make them armed with the necessary information tools for the effective marketing of the products. The company while applying this strategy is earning many gains. The sales team of a well-established company represents the company itself and they are well aware of the company’s strategy, aim and so on. The sales team with skill and result oriented motives convey the zeal of the company for the customers’ benefit. Thus the sale of products increases. Consultative selling rests on the sales team, as they are very close attached to the end customer. They will help the customer to analyze their problems if any concerning the product and its service. The sales team could also provide better solutions to the difficulties of the customers in the matter of customizing the product. At the same time they could also act as a representative of the customer and force the organization to rectify defects if any in the design of the product or the like and even the pricing. Thus the customers have a good and long standing impression about the company and thus the company could win the market.   12- Two competitors with similar products may ask differing prices because their total offerings are perceived as being unique by buyers. In the eyes of the organizational buyer, one firm may provide more value than another. Demonstrate how this might occur and outline the corresponding marketing strategy implications. http://search.bnet.com/search/pricing+decision.html In the present competitive market different companies offer different prices for the same type of product. Some prices are found to be very low than the other. For instance, a Compaq personal computer costs more than LG pc. Why this happen? Is it fair in the current marketplace? The answer is very simple and at the same time complex. A simple cost calculation will not serve the purpose. A product or service is priced for the values it earned through the years and performance. As such pricing of a product depends upon the cost of This Coursework About Course Called Business to Business Marketing 14 production and part of the cost of the goodwill of the company. Here the company’s brand name and its good will and the service rendered along with the cost of production determine the price of the product. Considering these as the base, a company may offer the product at a higher price. At the same time the competing company may offer the same type of product for a lesser price in order to sell their product quantitatively. Qualitative pricing is beyond conception in this case. These trends will create an imbalance in the market. The customer’s trust will become unfavorable. The affected company’s marketing strategy, in such a situation, may be assumed as a failure and is forced to go for a change. However, an effective pricing is very much related to demand. If the demand is on the higher side naturally the price will also be high. 13- Many experts argue that the persuasive power of advertising is grossly overestimated especially in the business market. If advertising doesn't persuade, what does it do, and how can we measure the results? http://hombyz.com/440.htm Who could tell an advertisement has no persuasive power? The so-called expert’s arguments that advertisement in the business market does not persuade have got no material evidence and hence the arguments can be treated as farce. Advertisement of a product is expressive and attracts the buyer to a great extent. It gives him a fair idea of the product, its brand name and the organization’s set up. It projects the merits of the product and enables the consumer to compare the same with the product of the competitors. The company can measure the results of the advertisement through the response of the buyers through the sales proceeds and the reaction of the buyers. No one can underestimate the power of classified advertisements coming in the newspapers and periodicals. How could we ignore the trend making advertisements appearing regularly on the visual media? To be true these advertisements create a new purchase culture and support the business market a lot. This Coursework About Course Called Business to Business Marketing 15 In this high tech-society of ours web marketing has emerged as a high potential marketing strategy. It is responsive to the customer’s needs. It passes on information about new products to various customer segments. Web marketing is very low cost and reaches millions of people at the same time. Though it cannot pin point the desired target group it has got the advantage that along with the non target group there are chances that it may reach the desired one. 14- Key account management strategies are emphasized by top-tier business marketing firms like 3M, IBM, and Dow Chemical. Compare and contrast a key account with a regular account. Next, describe how the sales strategy for a key account differs from the traditional selling focus used for regular accounts. http://www.iproceed.com/marketing/key-account-management.htm The main proponents of the key accounts are the high branded business marketing companies like IBM and Dow Chemical. A typical key account will bring in a regular cash flow to an organization and that is why the suppliers as well as the organizational buyer keep key accounts. For the safe and sound conduct of a business a company has to maintain several key accounts. The account will be monitored carefully to confirm that they continue to be profitable. For this purpose a company spends considerable energy has to find out a most effective strategy for the management of key accounts. These accounts will help the executives a certain level to serve the customers and maintain the growth to create a greater value of their firm. When the executives analyze the value of the key accounts they could very well see the role of the customers who are the means of revenue to their organization. Key accounts will help to develop a strategic account management and good customer relationships. It is constructive, profitable and reliable on long-term basis. Through the usage of key accounts the top officials could influence and persuade the decision makers. These accounts help them to attain the This Coursework About Course Called Business to Business Marketing 16 accurate positioning of the customer’s profile. Moreover, the customer’s short-term buying trends could be assessed by the efficient execution of the key accounts. Regular accounts is quite different from key accounts. Every company maintains regular accounts. Professional assistance is needed to assess the business and control the finance in a company. Accounting experts, namely accountants, prepare regular accounts. This accounts gives the business owner to tackle the day to day affairs of the business and finance of the company, and helps him to attend the core business. It determines the profits and losses and the regular cash flow. At the same time it gives a clear picture about the current status of the business. ***** Read More