Salesforce Design by VP8177

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									Business-to-Business Marketing
      Key Account Management

      Haas School of Business
           UC Berkeley

             Fall 2008
             Week 10

             Zsolt Katona




                                 1
    Managing Business Customers

Differences from B2C

•   Fewer customers
•   Focus on relationship and process benefits
•   Can charge different prices
•   Big differences in sales volume
•   Cost to serve may differ across customers




                                                 2
                  Basic Steps

•   Segmentation of customers
     -Size
     -Industry
     -Other (CEO role, competition, etc.)

•   Distribution of customers (e.g. size)
     -Only one customer
     -One large customer + smaller ones
     -A couple of large ones + smaller ones
     -Many similar customers

•   Evaluate each segment’s profitability
                                              3
Response curve (one account)

                        margin




                                 Budget
                                          4
Serving two Accounts
                       Account 1




                          Account 2




                             Budget
                                      5
Smaller Total Budget
                       Account 1




                          Account 2




                             Budget
                                      6
     Budget Constrained Allocation

•   Marginal profit should be the same for all
    accounts
•   Smaller accounts are more costly to serve
•   More focus on large accounts

    But, if there is competition

•   Each supplier focuses on large buyers
•   It might be more profitable serving small
    accounts


                                                 7
             Wesco takeaway

•   Segmentation of customers

•   Profitability in different stages of
    implementation

•   Importance of previous relationship

•   Allocation of sales force (key account
    managers)

•   Applicable to different types of firms (not
    only distributors)
                                                  8
Industrat




            9
Prediction Market




                    10

								
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