B2B Marketing Assignment Help
Business market’s demand depends on the customer’s demand. If a customer doesn’t demand a product, business would not produce the product. If production doesn’t happen, then the requirement of other company’s product is nil. Business markets do not exist in isolation.
Hundreds of business demand rises because of a single customer’s demand. For example- A customer needs a laptop. Then demand for the motherboard, battery, hardware, parts will also be increased.
Increase in the buying power of the consumers’ will increase the business demand because if there is an increase in the purchasing power of the consumer then the demand for goods will also be increased.
There are four business markets:
- Producer Markets- Producers buy goods and services to make them a sellable product, which ultimately is sold to the consumers for the purpose of making profits. Example- Manufacturer, Construction Companies etc.
- Reseller Markets- In this market, reseller buys goods and services from the producer and ultimately sells to the consumer. In this market, product modification is not done. They sell the same product they have received from the manufacturer. Reseller adds their margin in the product cost. Example- Wholesaler, who buys goods from the manufacturer and sells to the retailer by adding their profit to their cost.
- Government Markets- A government market is a market where the consumers are federal, state and local governments. Governments buy the same types of products and services as private sector consumers, plus some more exotic products such as aircraft carriers, fighter jets, tanks, spy satellites, and nuclear weapons. They usually buy the goods and services through a bidding
- Institutional Markets- A market consisting of schools, universities, hospitals, charities, clubs and similar organizations which buy goods and services for use in the production of their own goods and services.
Business to Business Marketing refers to a transaction happens between two organizations. It is a business conducted by business rather than customer and individuals. For instance, sales happen between a manufacturer and wholesaler. It relies on the same basic principle of consumer marketing, but these principles are executed in different ways.
A typical supply chain involves multiple businesses to business transactions, as companies purchase components and products such as raw materials, for the use in the manufacturing process. The finished product can be sold to the individual through a wholesaler, retailers.
Marts are a perfect example of the B2B. They act as middlemen between a consumer and wholesaler. They purchase goods from a wholesaler at low prices and add their profits and sell to the ultimate customers.
B2B Relationship Development- It is really important to have a good relationship with the client to have a nice B2B connection. These types of transactions require planning to be successful. It mainly depends on the company’s account management personnel to establish a business client relationship. It should be nurtured prior to the sales, for successful transactions to take place. Conferences and trade show also help the businesses in building awareness of the products and services it provides to other business.
B2B E-Commerce- Since Internet marketing currently is at its top level. Company’s websites allow interested parties to check out the products and services and their features and also allow them to initiate contact. Specialized online directories providing information about particular industries, companies and the products and services they provide also facilitate business to business transactions.
Creating Value for Business Customers
- First, the company should try to understand what is important for the consumer and then they should work upon the opportunities they have. It can best be done by taking surveys or by personally taking their feedback.
- The second step is to know what the value that is created by the product is. Value is the benefit of the product minus cost for a consumer. They will only buy a product if its value is more than the price otherwise they will switch to different brand or company.
- In the third step, the company should identify their consumer and also the segments in which they can provide more value than their competitors.
- In the fourth step, the company should fix a win-win price of the product. A win-win price refers to the price which maximizes your profit and on the other hand, makes it clear that customers are receiving value. Thus, it is very important to make the customer satisfied as a satisfied customer would not mind in paying high price whereas an unsatisfied customer will mind paying the even low price.
- The fifth step is to allocate the investment. The organization should allocate all their investment to their potential customers. They should allocate the investment toward the customers and segments that can best serve and will provide the greatest value in return.
Product Development Strategies
Product development may mean producing a brand new product or developing an existing product. A company can gain a competitive advantage by adding more value to the product through features, sizes or price. Adding more value to the existing product has two advantages-
- The company is already aware of the needs of the consumer.
- The product is already been established in the market.
So, a company doesn’t need to do much research on these topics as they already have an idea about them. Except this, they have the right channels to reach the consumer.
A company should consider following things when they’re expanding their product:-
- Benefits that will be gained by the customers after adding the feature and whether this benefit was asked by them or not.
- Whether marketing, manufacturing or distribution cost will become more efficient or not.
- Can company’s current assets, brand, marketing, and distribution be used with the new product?
- Does company has the adequate knowledge and skill to produce the product or not?
An existing product can be developed by:-
- Adapting to other ideas.
- Modifying the shape, size, color or form.
- Keeping higher price and giving more value.
- Reducing the product.
- Combining other options, ideas with the product.
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Designing Profitable Customer Relationship
A company cannot grow without their customers. So, they know that they will have to design a relationship with them which is profitable. There are certain principles which a company should take into account while managing the relationship with their customers.
- Know your customer- Company should learn about their customers. When a company will get to know about their customers, they will easily be able to make decisions for them.
- Interaction- After knowing their customer, it is their time to interact with them. Interaction makes the relationship more healthy and profitable.
- Handling Customers- Company should handle each customer differently. It is because every customer has their own taste and preferences’ and one theory cannot work with all of them.
- Retain- Learning about the customer and handling them separately will help the organization in retaining the customer.
- Customers’ needs- An organization learns about its customers to know about their needs and demand. Learning provides opportunities for making the right offer or delivering the right service to the right person at the right time.
- Increases value- Building relationship with the customer has an advantage that it increases value both for a customer and organization. When executed properly, the focus on building relationships and brand loyalties are a “win-win” for customers and the organization alike.
- Focus on revenue and retention- A company may require spending more than usual to build relationships with the customer. It will increase their cost. But the company should not mind that. They should focus much on revenue and retention which they would get after building a successful relationship with the public.
- Enable information sharing- It is both a requirement and a benefit of customer relationship management that organizations improve their internal communication processes. The only way to develop a comprehensive view of each customer’s relationship with the organization is with the full participation of every part of the organization.
- Create business rules to drive all customer relationship- Business rules codify and automate processes, specifying what should happen in specific situations, thus enabling both differentiated customer treatment and automation.
Designing a Brand
There is hardly any difference in similar product producing companies. They offer the same product at the same price with the same feature but what makes them different is their brand. Thus, it is really important to build a brand image that is fixed in the mind of the customer. Be it customer market or business market, designing a brand is important in both the cases.
- Vision and Core Values- In the first step, the firm should outline the vision, value and their mission statement. This is very important as these will be treated as the founding stone of the brand. Brand logo, name, tagline or website will depend on vision, value and Vision, values and statements are created by the decision maker as these are a typical process. A mission statement must tell about the values and vision of the company and it should also tell about the process of adding value to the product. For example, Amazon.com’s mission statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
- Target Market- Company should create segments where they will be offering their product. A segment is a broad structure of the potential customers. From the different segments, the company should select the target market which has the highest number of potential customer. The company should define the target market by creating a profile of an ideal client. The profile includes information about sex, occupation, age range, education level, geographical location, income, work environment, and job title. Profile means the target a company is aiming at.
- Determination of Value Proposition- It is very important to differentiate the product from that of competitors. Thus, a company should pen points which compel the customer to buy the product of the company. The value proposition is generally the benefit that will be provided through the product.
- Creating Brand Narrative- At this step, the company should create a brand This refers to the company’s story. Company story doesn’t mean the history but it is about telling potential clients why they should buy the product or service. The B2B brand narrative runs throughout marketing strategy and is essential to keeping a consistent brand.
- Promotion of brand internally- It is not productive if a company launches their brand without telling much about it to their employees. Many companies don’t alert their employees about their new brand or re-brand until it has launched in the market. Organization’s members are the brand ambassador for their organization. Each member contributes to the success of the organization in one way or another. So a company should create a buzz in the organization first before launching it.
Supply Chain of B2B
New sales channel- After becoming a member of the B2B exchange, a company opens a low cost, highly functional and easy to use sales channel for the company. The company is exposed to the untapped target audience.
- Marketplace- B2B exchanges include a marketplace. In this marketplace, the seller can post an offer of goods and services. It is easy for the buyer to find their suitable seller, as all the sellers will be under one roof. A populated marketplace can easily become a good sales channel for a supplier.
- Electronic Catalog- Members of the B2B exchange have been given online repository where they are allowed to add their product and services. It eliminates the need for online platforms.
- Web store- There are some exchanges which allow companies to convert their website to their exchange. It will allow you to handle sales conveniently from the website and the marketplace.
- Auctions- One of the great features of B2B exchange is their auction systems. As we all know from the immense success of eBay, auctioning is a great way of selling products online. Some exchanges boast reverse auction system, where suppliers bid for a deal posted by a buyer.
B2B v/s B2C Supply Chain
- Length of Supply Chain- It is seen that supply chain in the B2C market is often longer than supply chain in the B2B B2C involves a producer, wholesaler and a retailer whereas B2B involves a selling and a buying company.
- A number of customers- Not every producer is a buyer. Thus, a number of customers in B2C is more than the customers in B2B. Hence, it is very difficult for companies to manage the relationship in B2C whereas it is much easier in B2B.
- Volume- Generally it is seen that the volume of sales to each customer is higher in B2B than in B2C. This is why it is very important for the company to keep healthy relations in B2B than B2C, in which each customer may only purchase a single unit. It doesn’t mean that the company would ignore the customer because of this reason. The company should remember that every customer is their brand ambassador and one customer can bring a thousand customers to them.
B2B Pricing Strategy
When a company develops its pricing strategy, it should remember that there is a relationship between price, value and volume. And a company should also keep in mind the dynamic market relationships between price, value and volume. Customers generally pay a higher price for a product which scares in nature or which has greater value. And it is seen that a customer pays a lower price for a mass produced item that is not easily differentiated with others, for instance, vegetables.
It is never easy to determine the value of the product. It is because everybody has a different type of taste thus one person’s value could be another person’s expense. So it requires the combination of these three (value, price and quantity) to achieve the right balance of all these factors to maximize customer acceptance and your sales and profits.
Price Strategy Matrix
Good Quality at a reasonable price.
Highest quality at a premium price
Low quality with no differentiation
Mediocre quality at the high price.
It can be seen from the above matrix that when the production of the product is high then it will have a low price and the perceived value will also be low because mass-produced termed as no differentiated product. When there is a medium production, the quality will be good at a reasonable price. And when the production is low it means that there is a mediocre quality product at a high price.
When it comes to low price product, perceived value will be low and also the quantity of production will be high. Medium price product is same as the medium quantity of production. High price depicts high-quality product and the production of the same will be lower.
Sales promotion in customer market is easy because customers look for greater quantity and low prices. But purchase considerations are different in B2B. Price and quantity are the factors but not the only one. Technical specifications, partnership agreements, strategic procurement plans and processes used to play a vital role.
- Exhibitions and Trade shows- Trade shows are the events that are organized by the multiple companies or an industry. Companies from a particular industry come and offer their product in the show.
- Sample products- When a company is launching its product for the first time, it sends some sample to their prospective buyer so that they can make a purchase decision after using it. Salesperson goes to their client with a sample unit. If given the green light, they help their prospect install and use the product.
- Price Reductions- This technique is mostly found where supplier bid for buyers. Price is reduced till the price offered by the suppliers. In this method, the lower bidder wins the auction.
- Promotional products- Company offers promotional products such as t-shirt with logo, pen logo or keychain logo. It is offered to those who do some purchases with the company and it is offered to the customer as a gift.
B2B Marketing Performance Measurement
- Setting up of goals for the campaign- Setting up of goals and objectives is one of the important tasks of measuring the performance. Because a performance can only be measured when there is some standard set for it. If there won’t be any standard set then it will be difficult to measure the performance. The most popular factors to consider when it comes to marketing performance measurement are
- Brand Awareness
- Lead Generation
- Customer Acquisition
- Thought Leadership
- Customer Retention/Loyalty
- Website Traffic
- Lead Management/Nurturing
- Repeat Clients and/or Website Visitors
- Standards- Once the objectives are prepared, the company would set the standard of the campaign against which they will be compared. It is important for the company to prepare standards as these will help the company in the end at the time of measuring.
- Performance- Once the objectives are set, the company would prepare such plans which are according to the objectives and goals of the campaign. In this way, it will launch the campaign nationally or globally.
Measuring- In the second step, standards are set. These standards are measured against the actual output that the company has received. For example, the company had an objective of selling 1000 motherboards. For this, they launched a campaign of sample products and would able to sell 1300 motherboards in a month. The difference of 300 will be the profit of the company as this is a positive change. The company would like to keep this positive change for a longer period so that, they will be able to earn as much as possible. If there is any negative change (actual output being less than standard), then the company should find the reason for the change and work accordingly.