B 2 B Marketing

Session 4

Value Based Strategy

Product Leadership
Microsoft, Intel Silicon Graphics HP

Customer intimacy
Airborne Express IBM

Operational Excellence
Dell FedEx

Essential for Strategic Market Planning

Alternative ways of segmenting the market to get leverage Size and growth rate of the market Estimate of firms share of customers business for each segment Estimate of Value of the product offering and value of the augmenting service for each market segment Few strengths and weakness which if actioned, will significantly change customers perception Firms most and least profitable products Firms most and least profitable customers

Market strategies
Defensive Market strategy
Retaining present customers
Strengths to be reinforced

Offensive / Aggressive Market strategy

Acquiring new customers
Remove Weaknesses

Organisation Characteristics
Slow decision maker
Emphasis on Planning & Futuristic information
Technology, Competitor, Market, Customer Profitability

Fast decision maker

Emphasis on information about current environment and current operations
Order bookings, Backlog, Margin, Cash, scrap, WIP, Competitors new product introduction, developments at key accounts, technical development in industry

Building Brands in B2B

How does Brand strategy support our business strategy? What is our aspirational brand identity and how do we get there? What value proposition is most valuable to the customer? Align Organisation to align value proposition and brand

Brands in B2B
Corporate or Family brand Link non-product related imagery association Employ full range of marketing communication options Leverage equity of customer Segment markets and develop tailored branding and marketing programs

Augmenting Services, Programs and Systems

Services
Corrective / Remedial
Problem Solving Trouble shooting Operations assistance

Fulfillment
Availability assurance Order quantity Logistics, Delivery Installation, Maintenance Training Warranty Returns

Augmenting Services, Programs and Systems

Programs
Economic
Deal, Terms, Conditions, off-invoice, freight,, co-op allowance, rebates, Bonuses

Relationship
Advice & Counseling, Specification, Co-design, process Engineering, Process redesign,cost reduction, responsiveness to information requests, joint market research, co-promotion, communication partnering, participation in customer programs

Augmenting Services, Programs and Systems

Systems
Linking
Computer-to-computer ordering, shared material resource planning, EDI

Efficiency
Expert systems, Logistic management systems, responsiveness systems

Services Marketing in B2B

Services are different than products
Intangibility Inseparability of production and consumption Perishability Heterogeneity

Difference between product s and services are a matter of degree and all market offering are falling along the continuum of tangibility

Flexible Market Offering

Same Value addition for all customers has negative impact Hence Naked Solution with option is another strategy
Theoretically good concept Loss of economies of scale / Bulk provisioning Individual selling effort Complexity of execution- Logistics Do customer know what they want ?

Flexible Market Offering

Flexible Market Offering
Few well chosen naked solutions for each market segment Wrapped with well chosen options

Key differentiator is Value added through Services Flexible Market offering is essentially Flexible Value added service offering

Value Added Service

Articulate true Breadth of services Arbitrary Nature of charges Lack of variation across segments Assess true cost and Customer value Measure customer value

Flexible Market Offering

Standard Offering - Naked Offering plus some minimum services Add-ons-Extra cost but should be lower than what it generally cost the customer on one-off basis Options- Additional services availablecharge them on true cost basis

Pricing of Services
Value Based Pricing

Cost

Base Profit

Premium

Competitive True Value Incremental

Penetration

Skimming