2 B2B Value

B2B Marketing Sensing

Defining the market Monitoring competition Assessing customer value Gaining customer feedback


Defining the market Market segmentation

Positioning into grouping of firms having similar requirements and preference

Market segments of interest & importance

Segment size Growth Sales & profit potential for the organisation


Monitoring competition (Porter’s framework) Future goals

Strategic & financial Assumptions

Perceptions about future changes in economy, investment climate etc as expressed by competitors

Current strategy Competitors positioning & other marketing strategies

Capabilities Gauging relative strengths & weaknesses of

competitors


Monitoring competition Competitor Intelligence Pyramid

Data collection: Annual reports, press info, trade shows, customer network, buyer’s guides etc

Data analysis: Ratio analysis, benchmarking, cost analysis etc

Identify opportunities and threat areas

B2B Marketing Sensing Customer value assessment:

Understanding the critical role the product or service plays in customers’ usage system

Cost & benefit analysis as viewed by customer

Through survey questions to customer representatives

Focus group value assessment: customer+consultant+academic etc

Conjoint analysis Importance rating Benchmarking


Gaining Customer feedback Customer satisfaction measurement Customer satisfaction to customer

delight to customer loyalty Market perceived quality profile

Customer Value Analysis -As perceived by customer

Your company superiorCompetitor superior

Product quality

Sales rep

Customer service

e-Business

Company image

Technology

Product delivery

Billing

Price

Quality factors

Commercial factors

Customer’s Buying Orientation

Obtain best deal from suppliers in terms of price, quality & availability

Maximize power over suppliers Commoditization (equalise values of different

suppliers) Multi-sourcing

Avoid risk wherever possible Follow established procedure Rely on proven vendors


Developments in buying: Target pricing Global sourcing e-sourcing Co-operative pricing

Procurement orientation: Improving quality by correct specification Reducing total cost of ownership – total life

time cost Co-operating with suppliers – co-design


Supply Management Orientation: Focusing on delivering value to end-users Build a strategy to leverage firm’s

competencies & resources Establish supply networks to complement

business process Could be legally separate, but operationally

synchronised Make-to-stock model Build-to-order model Replenishment model Design-to-build model

Sustain collaborative relationship with select suppliers & sub-suppliers

Customer’s Requirements & Preferences

Joint development projects

Usability testingTrials

On-site trainingOn-line servicesTraining manuals

Usage improvementsActivity based costing

Customer’s understandingof its own requirements

Known Unknown

Company’sunderstandingof customerrequirements

Known

Unknown

Customer’s Buying Orientation Customer valuation of Total Cost

Offering (TCO) Extended purchase price (net landed cost

after considering discounts, tax rebates etc) Add cost of non-performance due to:

Delivery (including short-supplies) Quality (repeat inspection cost on rejected

materials) Documentation errors

Customer’s Buying Orientation SPI (Supplier Performance Index)=

Customers create SPIs for different purchases from each competing suppliers. These SPIs are used to evaluate vendors

Extended purchase price + nonperformance costs Extended purchase price

Building Marketing Strategy Resources based view:

Building resources Technical know-how Equipment Personnel Capital

Core competencies & capabilities: Provides a potential access to a wide market

segment Should make a significant contribution to

customer benefit of the end product Should be difficult for competitors to imitate

Building Marketing Strategy Brands as resources:

Ex: Teflon, Kevlar Linking with the resources of

partner’s in the value chain Creating value based strategies:

Product leadership Customer intimacy Operational excellence

Webster and Wind Model of Organisational Buying Behaviour

Environmental Variables

Organisational Variables

Buying Centre Variables

Individual Variables

Organisational BuyingDecisions

Webster and Wind Model of Organisational Buying Behaviour Environmental Variables

Technological Economic Political and Legal Labour Unions Cultural Customer demands Competitive practices and pressures Supplier information

Webster and Wind Model of Organisational Buying Behaviour Organisational Variables:

Objectives/goals Organisation structures Purchasing policies and procedures Evaluation and reward systems Degree of decentralisation in purchasing

Individual Variables Personal goals Education, experience and expertise Job position Values and lifestyle Income

Webster and Wind Model of Organisational Buying Behaviour Buying Centre Variables:

Authority Size Key influencers Interpersonal relationship Communication

Organisational Buying Decisions Choice of suppliers Delay decisions and search for more information Make or lease or buy Do not buy

Webster and Wind Model of Organisational Buying Behaviour This model is comprehensive and identifiies

key variables Model is weak in explaining specific

influence of the key variables

The Sheth Model of Organisational Buying Behaviour Emphasises the joint decision making

process in an organisation Recognises psychological aspects of the

decision making individuals in organisational buying behaviour

The Sheth Model of Organisational Buying Behaviour

Component 1 Component 2 Component 3



Differences amongindividual buyerscaused by factors:

• Background of individuals• Their information sources• Active search• Perceptual distortion• Satisfaction with past purchases





Variables thatdetermine if thebuying decision isautonomous orjoint:(A) Product specificfactors, including:• Time pressure• Perceived risk• Type of purchase(B) Company specificfactors, including:• Company size•Company orientations• Degree of centralisation





Variables thatdetermine if thebuying decision isautonomous orjoint:(A) Product specificfactors, including:• Time pressure• Perceived risk• Type of purchase(B) Company specificfactors, including:• Company size•Company orientations• Degree of centralisation

Methods used forconflict resolutionin joint decisionmaking process:

• Problem solving• Persuation• Bargaining• Politicking

Situational Factor

Supplier orbrand choice

Documents

2 B2B Value