B2B Marketing of Eight Creative Solutions Ltd - Essay Example

B2B Marketing: Eight Creative Solutions Ltd. Table of Contents Introduction 3 Marketing Mix 4 Relationships and Networks 8 Challenges 10 Conclusion 12 References 14 Bibliography 16 Introduction Richard Henderson and John Stewart were the founders of the Eight Creative Solution Ltd (ECS). It is a Cambridge based company which is established in 1995 .It is basically a service agency which deals with advertising, online marketing, direct marketing, public relations and website development. ECS has four department and these are accounts department, creative service, media service and the marketing services. ECS has been segmenting their target audience the on the basis of company size, geographic area, possible demand with in the sector. It can be said without much doubt that recession is a part of any business. It is a slowdown activity over a long period of time. In the period of recession, the unemployment rate and bankruptcies rise. In every business life cycle, the growth of the industry is measured through the measures like employment generation, Gross Domestic Product (GDP), capacity utilization, investment spending, household incomes, and inflation and business profits. Recessions are believed to be originated by extensive drop in spending. Governments respond to this stage by taking expansionary macroeconomic policies, such as increasing money supply, decreasing taxation and increasing government spending (INSEAD, 2009). B2B (Business to business) marketing or Industrial marketing is a marketing concept where one company deals their products and services with another company. It is a different marketing approach from B2C (business to customer) marketing where in a company sales its product directly to the end customers. Marketing Mix The activity of marketing is generally divided into four important activities. They are product, price, place and promotion. The marketing managers of each business have to concentrate on these four activities (also known as 4P’s) to sustain in this dynamic world. For the first P, the managers should be looking forward on product quality, brand name, accessories, warranty and services among other things. In price part, managers should go through the price discrimination, price flexibility, bundling, cash and payment system, seasonal pricing etc. On the other hand, distribution channel, transportation and warehousing are the three main aspects for the place segment of marketing mix and lastly in promotional part manager should focus on public relation and publicity. In the below section, we discuss about four P’s of marketing mix for ECS. They are as follows: Product - ECS has three main services namely media services, advertising and marketing services. The company acts as a third part service provides and has clients from the domain of theme parks, universities, garden centres and furniture retailers. ECS basically uses the service of ‘KWL Media Production’. The ongoing recession had major impact on the business of ECS. Media Services - It is alienated into two parts; one is media buying and another one is media painting. The first service, media planning concerns when and where advertisement could be placed. With the experience, the company basically knows which media can do the best work for the purpose of the client. Second thing is that, media buying involves in conversing with media owners, individuals and price and ease of using media space. According to Steve Henry, media services have been deeply impacted because of the ongoing recession period. ECS have to reduce their middle man to reduce their product cost. Advertising - Advertising involves creating marketing campaigns for their customers. ECS always listen carefully to the clients and take their idea and after that they develop it and advertise those in the popular media. The promotion involves in the mediums like radio, television, print advertising and outdoor. It is a big challenge for a manager to decide where they invest and advertise to get maximum profit in the period of recession. The financial risk of investing and competitive risk of not investing are the two main risks in the advertising segment during the recession period. ECS should take all the factors into consideration to response faster to the client so that the business partners are contended in the trying times of recession (Srinivasan Et Al, 2005). Marketing Services - ECS also connects in below-the-line promotion. This includes: direct mail, sales promotion, interactive marketing and public relations (PR). ECS should take the proactive marketing strategy to sustain their product of marketing services in the future amidst recession. Price - The price of ECS varies on client’s demand. Media type, frequency, timeframe and design are the four main factors which influences the fluctuation of pricing strategy of every company. Already, ECS has followed the rigid pricing system when they are dealing with the client. During the recession period, service industry is very much affected because of pricing. Many of the companies try to cut their cost to balance their earning and their spending amount during the time of recession. ECS has customer base ranging from large companies to small retailers. These companies try to promote their activities in a very cost effective manner. For this reason, ECS might provide free scheme like if any company want to take a fifteen minute advertisement and ECS can offer two minutes more to the company without taking any extra price from the company. This is one kind of policy to attract the industrial customer. Also, ECS should meet the customer needs to avoid the customer’s cognitive dissonance. ECS has to target those types of customer (or companies) that are newly entering into the market. Place - Eight Creative Solutions Ltd is basically a Cambridge based company. It means that it is ideally situated to serve many of the small and medium enterprises in and around the Cambridge. Also, there are many professionals who are having work from home jobs. They are basically accounts executives and designers. Place is one of the main points of marketing mix from where consumers can get their products and buy their products very easily. It takes too much time and costs more for a customer to travel widely for a product or service. ECS should look into this matter because in the time of recession, customers cannot pay extra money to buy a product or service. So, ECS try to open their service station near the target market where customers can reach easily to solve their problems. It would save their time. For this reason, customer would think that company gives them value which is helpful for the company’s growth (Creighton University, n.d.). Promotion - It is the kind of activity through which the company tries to communicate and convince the people to use their products or apply their services. In a service organization, promotion plays a major role to generate business. Careful planning can create an extra advantage for promotion. Advertising, sales promotion, personal selling and publicity are the four main tools of promotional activities. In such case, word of mouth is very much essential for promotion of every service organizations. ECS is also banking upon the word of mouth promotion. The website of the company is helpful for business which is a ‘shop window’ type. It also discloses the companies range, background and other testimonials along with many other related facts. In the time of recession, the company can organize the trade fair or appear in the trade magazine to attract the new customers as well as to retain the old customer (McDonough & Ackert, 1986). Relationships and Networks Business relationship is a complex phenomena where one have to distinguish among the various situations with a desired level of accuracy. Important interference must be drawn after the understanding and analysis of the relationship under the specific events and relationships such as if those are fragile or strong, are there any power dependence or not. To identify this, company should understand the matching interfaces of contacts and prescribe relevant interaction pattern between the two parties. Building relationship and networking are one kind of art and so many people meet and benefit from such relationship. Networking is an activity where one can develop connection with others and increase the existing connection list. There is no doubt that one of the professional secrets of profitable organization is networking. Following can be regarded as the reasons for networking: 1) Carry the information about the precise divisions, departments, etc to the outer world 2) To know about what abilities and skills required for the purpose of work or field that the organization is targeting 3) To get the referrals 4) Get leads from other organizations which may be hired When ECS try to create their network at that moment itself they can be specific about their goals. They should know which customer they should contact and the reason of such contact. They also identify the right time and right place to create the network. ECS should conduct the likes of seminars, conferences, debates and corporate summits for the purpose of networking (Yale University, n.d.). In the case of relationship building, the main objective is to set trust with the customers and to fulfil the customer needs. ECS can build strong bonding with their customers by improving the following three aspects (Sorce, 2002). It is particularly true in the time of recession: a) Satisfaction of the customers – Delivery of the supreme quality of service and products to the clients. b) Creating brand equity - Sum of intangible assets based upon of the brand. Factors that comprise this segment are perceived quality, awareness, brand loyalty, marketing channel, packaging and trademarks etc. c) Maintaining and creating relationship – As it is very tough to get hold of new customers, the retention of the existing customers should be duly focused upon. Repeat purchases, developed marketing communications, improved responsiveness from the customer are few of the success indicators of the above strategies. Both Richard Henderson and John Stewart provided great importance for ECS to maintain successful relationship and trustworthiness with their customers. It also involves with ‘social bonding’ which is an immense step for the retention of the existing customer as well as for the purpose of attracting the new customer. The owners of the organizations are also the members of the local organization that have developed the high profile business community in Cambridge in favour of ECS and helped to fight back recession. Challenges Like other business organizations, ECS also faced the affect of recession during the time period. The company lost almost 25% of the revenue compares year on year basis. Besides that, the company had hard time to face the challenge to retain the old customers as they also failed to attract the new customers too. Another challenge faced by the company is that the small and medium size firms started to do their business in that area had excellent networking system. For this reason too, the market of ECS is getting saturated and the business is getting fragmented. The fact is that ECS which deals with B2B marketing is into more complex market than B2C marketing. Some of major difficulties that are faced in a B2B marketing compared to the B2C marketing are as follows: (a) Contract management: B2B (or business to business) is always under the direct sourcing model where dictate the terms of negotiation with incorporated factors like that of carrier, logistics preferences, warranty coverage and volume-based pricing but in B2C marketing only spot-sourcing, which gives the each item a horizontal retail price, does the trick. (b) Business focussed personalisation: It is sufficient for a B2C marketer to maintain the promotional activities like email, user profiles etc. But in B2B a strong programming efforts are needed for efficient functioning. B2B marketer should be able to handle the order history, location, payment records also. (c) Reporting – Reporting, which involves with analytics and business intelligence (BI) like product profitability, market and product group should be adequately reported. (e) Application Syndication and Content - This means that when the seller site is able to provide the catalogue information about the incorporated product with description and the pictures and the information is presented in a consolidated manner to the buyer. This is a very important step in the segment of business to business marketing (Jakovljevic, 2004). The ongoing recession has made the businesses very caution on one hand and also desperate on the other. While the small business organisations like that of ECS are trying their best to curtail the cost structure and save the resources being defensive and cautious, similarly on the other hand, the similar organisations are initiating measures to find new clients. As the saying goes, ‘desperate time calls for desperate measures’, it is absolutely true for the companies like ECS. The big and established firms can save themselves from the effects of recession by relying upon their reserves but same cannot be expected from the small organisation like that of ECS. In order to do so, the company has to continuously focus upon the marketing techniques especially the segments of business to business marketing (Ghemawat, 2009). Conclusion John Stewart and Richard Henderson are tremendously concerned regarding the period of recession and depleting profits. Even though, there is a way of recovery, the recession period seriously hampered the business growth. John Stewart and Richard Henderson are trying to focus on their customer satisfaction. The company is trying to prevent the client attrition rate and also focusing to attract the new customer in order to sustain this competitive dynamic world in the down-turning economy. In the affected economy of recession, ECS has to initiate measures with due seriousness and patience. In addition, the company is also highly fragmented because there are so many small and medium size service agencies that are start their business. For this reason, the company is competing with the locally based companies which have good national networks. ECS should be able to maintain the trust of their clients with their excellent service because it deeply impacts the clients’ mind and they become brand loyal which generate more business and also the brand loyal customer’s word of mouth publicity provides to be the extra advantage for the growth of the business. While many of the similar companies like ECS are resorting to the measures like laying - off and retrenchment of the existing employees to cope up with the pressure that is created by the recession, ECS still has not initiated such measure. It has positively impacted the employees of the company as they have their morale intact. Also, it facilitates a positive view to the stake holders of the company regarding the position of the company. But in order to maintain such environment, the company has to earn the targeted revenue and therefore greater emphasis should be laid upon business to business marketing strategies. References Creighton University, No Date. Place: A Part of the Marketing Mix. The Marketing Mix. [Online] Available at: https://people.creighton.edu/~shu02225/nps_c_07.html [Accessed May 08, 2010]. Ghemawat, P., 2009. The Risk of Not Investing in a Recession. MIT Sloan Management Review. [Online] Available at: http://sloanreview.mit.edu/the-magazine/articles/2009/spring/50309/the-risk-of-not-investing-in-a-recession-2/ [Accessed May 08, 2010]. INSEAD, 2009. Global recession a catalyst for change in the advertising industry. Knowledge. [Online] Available at: http://knowledge.insead.edu/recession-advertising-consumerism-090730.cfm?vid=288 [Accessed May 08, 2010]. Jakovljevic, 2004. Differences in Complexity between B2C and B2B E-commerce. DePaul University. [Online] Available at: http://facweb.cs.depaul.edu/econfer/ect455/Class%20Material/B2B%20B2C%20Distinctions.pdf [Accessed May 08, 2010]. McDonough, M. & Ackert, G., 1986. Developing a Promotional Strategy. Michigan State University. [Online] Available at: http://web1.msue.msu.edu/imp/modtd/33710086.html [Accessed May 08, 2010]. Sorce, P., 2002. Relationship Marketing Strategy. Rochester Institute of Technology. [Online] Available at: http://print.rit.edu/pubs/02_04_sorce.pdf [Accessed May 08, 2010]. Srinivasan, R & Et Al. 2005. Turning adversity into advantage: Does proactive marketing during a recession pay off ? University of Texas. [Online] Available at: http://www.mccombs.utexas.edu/faculty/raji.srinivasan/Raji/IJRM_2005.pdf [Accessed May 08, 2010]. Yale University, No Date. A Beginner’s Guide to Networking. Networking Tips. [Online] Available at: http://www.yale.edu/macmillan/ocas/networking_tips.pdf [Accessed May 08, 2010]. Bibliography Fournier, Susan, Susan Dobsha, and David Glen Mick. “Preventing the Premature Death of Relationship Marketing.” Harvard Business Review, 1998. Jacoby, J., and R. Chestnut. Brand Loyalty: Measurement and Management. New York: John Wiley, 1978. Peppers, Don, and Martha Rogers. The One to One Future: Building Relationships One Customer at a Time. New York: Doubleday, 1993. Reinartz, Werner, and Kumar, V. The Mismanagement of Customer Loyalty. Harvard Business Review, 2002. Reichheld, Frederick F. The Loyalty Effect. Boston: Harvard Business School Press, 1996. Rust, Roland T., Valarie A. Zeithaml, and Katharine N. Lemon. Driving Customer Equity: How Customer Lifetime Value is Reshaping Corporate Strategy. New York: Free Press, 2000. Van Trijp, Hans C. M., Hoyer Wayne D., and Inman Jeffrey J. 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