Business to business sales and marketing

Business-to-Business Sales and Marketing Dr. Dan Flint Florida State University B2B S&M; A-envnmnt 1 Today’s Agenda • Introductions • Review course content; syllabus • Jump into Ch. 1 and 2 on business marketing environment B2B S&M; A-envnmnt 2 Introductions • Who I am and what I’m all about – I am here to facilitate part of your knowledge journey; I’m here for you, not the other way around – My background: degrees, work, family, etc. – How to contact me; first assignment - send me e-mail • Who you are and what you’re all about – name, background, and current situation – expectations from the course – goals down the road B2B S&M; A-envnmnt 3 Course Overview • Texts – Hutt and Speh; Heiman and Sanchez • 3, 50-minute blocks w/ 10 min breaks between – 5:30-6:20 - topic lecture and discussion – 6:30-7:20 - small group case analyses and discussion – 7:30-8:20 - videos, web-sites, pop press, exercises,… • Knowledge evaluation Exam 1 (30%), Exam 2 (30%), Project (25%), Homework (10%), in-class case presentations (5%) B2B S&M; A-envnmnt 4 Course Topics • Business marketing environment • Organizational buying behavior • Relationship marketing • E-Commerce • Supply Chain Management • Market opportunity analysis B2B S&M; A-envnmnt • Business Strategy • Product innovation • Business services marketing • Channel strategy • Pricing • Advertising • Selling and sales management • Controlling 5 The Business Marketing Environment (Ch. 1) B2B S&M; A-envnmnt 6 Business Marketing • What do we mean by “business marketing?” • How is business marketing different from consumer marketing? • How are they the same? B2B S&M; A-envnmnt 7 Markets v.s. Marketing • Business markets – markets for products and services bought by business, government, or institutions – products to be incorporated into other products, used, consumed, or resold • Business marketing – process for determining customer needs and developing marketing mixes for the organization – Product, place, promotion, price B2B S&M; A-envnmnt 8 Business v.s. Consumer • The nature of the customer, how the product purchased, and how it is used all distinguish business marketing and consumer marketing • A single business customer can account for significant revenue – GM spends $80 bill annually for industrial goods and services; Dupont spends $60 mill/day – Lincoln Town Car hood = $25 mill/yr to Alcoa – Medtronic package shipping = $14 mill/yr to FedEx B2B S&M; A-envnmnt 9 An E-Commerce Example of the Size of Business Markets • Business-to-Consumer (B2C) expected e-commerce revenue in 2004 is $108 billion • Business -to- Business (B2B) expected e-commerce revenue in 2004 is $2.7 trillion • B2B e-commerce is already 10 times B2C • GM, Ford, DaimlerChrysler have the world’s largest Internet business w/ $240 billion in direct purchases as well as part of the $500 billion that suppliers spend B2B S&M; A-envnmnt 10 World-Class Business Marketer • Distinct market-sensing capabilities • Distinct customer-linking capabilities • Ability to consistently be the preferred supplier and considered a business partner • Ability to create superior value propositions – understand, translate, create, deliver, evaluate, predict customer value – leverage core competencies to do so • Has a market orientation B2B S&M; A-envnmnt 11 Market Orientation • A culture and accompanying behaviors – customer focused (obsessed) – ability to generate, disseminate, and use superior market information (i.e., customers, competitors, suppliers, environmental forces) – interfunctional coordination (i.e., R&D, engineering, manufacturing, sales, logistics, finance, accounting) – top-to-bottom, side-to-side support and passion B2B S&M; A-envnmnt 12 Business Markets • Derived demand means fluctuating demand and complex forecasting – forecast end-user consumer demand – forecast direct customer demand • this is not merely a translation of end-user forecasts; it also involves other direct customer-specific issues such as operations changes, structural changes, personnel changes, product changes, strategic changes,….) – pull-through marketing to stimulate demand – price sensitivity – demand is often global B2B S&M; A-envnmnt 13 Business v.s. Consumer Marketing • • • • • • Emphasis on personal selling higher Service component more important Lengthy and complex price negotiations common Large accounts are common Long-term relationships are more crucial Supply chain efficiency and effectiveness are more crucial • Internet is used very differently B2B S&M; A-envnmnt 14 Basic Supply Chain Upstream Suppliers 3rd Party Service Providers Manufacturer Retailer / Wholesaler Direct Suppliers Let’s think of examples for all categories B2B S&M; A-envnmnt End-use Consumer 15 Interfunctional Relationships Business marketers make decisions that affect many other functions within their organizations, as well as other players up and down the supply chain – Players: R&D, engineering, manufacturing, procurement, logistics, accounting, finance, technical support, customer service – Thus, marketing planning must involves these players – Thus, marketers must develop strong working relationships with these players B2B S&M; A-envnmnt 16 Components of Sound Interfunctional Relationships Communication: – clear, open, continuous, free flowing Perspective taking: – take on other’s perspective Responsiveness: – responds to requests from other functions quickly and effectively Compatibility: – common ground and shared goals B2B S&M; A-envnmnt 17 Trends in Purchasing • Longer-term, closer relationships (supply bases cut by 50-70 % by most large firms) • Closer interactions among multiple functions on all sides of supply chain relationships • Physical location near supply chain partners • Marketers need to be business experts B2B S&M; A-envnmnt 18 Business Market Customers Commercial, government, institutions Commercial: Users OEMs Dealers and Distributors 19 B2B S&M; A-envnmnt Classifying Business Market ENTERING GOODS Goods FOUNDATION GOODS Raw Materials • Farm products (e.g., wheat) • Natural products (e.g., lumber) Installations • Buildings (e.g., offices) • Fixed equipment (e.g., machinery) Manufactured materials & parts • component materials (e.g., steel) • component parts (e.g., tires) Accessory equipment • Light factory eqpmnt (e.g., forklifts) • Office eqpmnt (e.g., desks) FACILITATING GOODS Supplies • Operating (e.g., lubricants) • Maintenance & repair (e.g., paint, screws) Business services • Maintenance & repair (e.g., computer repair) B2B S&M; A-envnmnt • Business advisory (e.g., consulting, legal) 20 Why Classify Based on Use? Even if the product is the same (e.g., Smuckers jelly, silicon chip), the different uses require completely different marketing strategies by suppliers B2B S&M; A-envnmnt 21 Some B2B Internet Sites Ariba: http://www.ariba.com/corp/home VerticalNet: http://www.verticalnet.com/ EarthWeb: http://www.earthweb.com/ Chemdex: http://www.chemdex.com FreeMarkets: http://www.freemarkets.com/ RoweCom: http://www.rowecom.com/ Exodus Communications: http://www.exodus.net/ 22 B2B S&M; A-envnmnt