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B2B

Business buying is a process by which a business defines its need for a product or
service, finds out a various vendors supplying the product, scrutnises each vendor
carefully and then decides which is the best suited one. The next step is the action
step of placing that.

Business or Industrial buying has a foll. Features:-


1) The demand 4 raw materials and components depends upon prodn plan of
their buyers and hence it is indirect or derived demand.
2) As the buyers price their final product taking the prices of all different
components which go in making the product the demand remains firm with
little or no change.
3) Increase in consumer goods skyrockets the demand of components and raw
material sand capital goods
4) Major purchase decisions in a firm r either grouped or team activites

User Purchase Purchase


Places Dept. Dept.
Demand gets it
With vetted
Purchase by technical
Department

Te user wants a product he has used earlier


Purchase manager wants to buy a to avoid inventory prblms
Technical manager wants state of art product
Finance manger wants value for money prdct
CEO wants the best prdct in the market

Purchase Decision Triangle


F- area of ignorance and sellers have to provide lot of information to the buyer
E- firsl level of doubts from buyer which must be clarified by the seller effectively
D- second level of hostility becoz of competitor hold on customers . the seller must
give added benefits to counter the compititve the strangle hold
C- in the third level attack is direct . at this point testimonials from imp. Local and
overseas customers must be shown 2 buyers. Additional guarantees can be offered
to buyers if there is specific requirement
B- the customer usually likes to dither( a level of indecision) at this stage
A- at this point the seller should offer either a no or yes

Decision Process is canalized thru foll people:-


1) the user or initator of the requirement
2) the purchase assistant wh start the purchase action
3) the technical manager who provides the details specifications of the prdct 2 b
purchased
4) the prodn manager who has to ultimately approve its uses
5) the finance manager who lokks at the investment angle
6) the influencers who help in decision making process and an almost forca a
decision on CEO
7) the decider or CEO whose ultimate responsibilities is to see the profitable
growth of the firm
8) veto-er whose holds the final word most likely the chairman
9) stoppers who are unofficial competitor agents and try to keep the firm at
bay(distance) by giving wrong info abt the compny, misleading the co. and
trying to pose as frnds of the co.
10)
Purchase Negotiation in Tender & Non tender

1) Big Volume buyers


2) Negotiaition r similar in both tender and non tender business
3) If the location is available but away from sellers it is advisable from the selers
to keep the falling info. For carrying out successful negotiations.
a) comparative statement of previous quotes prices and negotiated prices for
same product and with same competitors
4) Product costing with elements of fixed and variable cost
5) Floor prices that are the lowest prices upto which the seller has the firms
authority to go down to.
6) Authority to modify terms of business like payments, payment terms,
guarantee periods, warranty terms and faster delivery schedules.

Industrial Buying Process for B2B Buying

Foll can be considered as industrial products


a) Capital goods like P&M
b) Turnkey projects
c) Raw materials
d) Components
e) Sub Assemblies

The no. of buyers is small in industrial buying process and supplier grid is well coordinated
and well known.

Following Information should be given in the quotation:-

1) assembly and subassembly process, individual assembly and systems , guarantee


and warranty
2) Facility and provision of training of buyers technical personnel
3) Actual guarantee cards of bought out components
4) List of recommended spare parts along with their prices and cost and help including
manpower needed by the seller from the buyer during installation and
commissioning
5) Payment terms along with delivery schedules
6) Post guarantee periods , cost of services and contract of sevices
7) Sellers always seeks authority of buyers in some cases to subcontract part of the job
like installation and commissioning
8) Sellers seek approval from buyers to receive payments on part supply of equipment.

The marketing person shold be looking into the foll. Aspects in the buyers organization in
industrial sales:-
1) the decision making process
2) the hierarchy of decisions including recommendations
3) culture of renovation or status quo
4) purchasing from headquarters only
5) product grouping like ABC analysis
6) Long term business contracts
7) Short term business contracts
8) On the spot buying
9) Seasonality of their business and their purchasing
10) Simple vendor preferences which could be manifested by either single vendor or
multiple vendor
11) Payment reputation of the buyer (prompt payment buyer or delayed payment
buyer)
12) Associated businesses of the buyer and other assets and liabilities
13) Firms reputation amongst vendors

Industrial buyers have the foll. Considerations while placing orders:-

1) inventory status, max. and min. stock plans for each item to be purchased
2) reordering levels which depend on the difficuty of procuring the product due to its
lack of supplies it being far off in terms of deployment or the seller even may be
located overseas
3) storage space
4) Just in Time
5) Past experiences of project rejections
6) Production plans taking into account the seasonality of the demand of buyers final
products

Competition in Industrial Buying

Competition comes if the buyer stats the vertical integration i.e. its start to manufacture
what it was buying from a selling firm.
Forward vertical integration is when the vendor starts manufacture the product it was
selling.
Backward Vertical Integration- in this the buyer starts to make the component he was
buying. For eg the manufacturer of TV sets also starts manufacturing picture tubes which
he was otherwise outsourcing. In all such cases the seller looses the consumer.

Industrial Marketing Research

Industrial purchase decisions can be triggered by a no. of reasons as given below:-


a) market research informs the need of new innovative products for which capital
manufacturing equipment is required
b) old equipment needs to be replaced with state of art equipment
c) change in technology of manufacture
d) raw materials or components purchased are sub standard

Fresh Vendor Assesement

Final vendor selection needs careful scanning of foll aspects given below. This is apart from
the scrutiny of the technical and commercial bid of the vendor.
1) past record of the vendor
2) list of vendor customers
3) financial status of the vendor
4) vendors flexibility of supplying
5) Testimonials from customers abt the quality of product
6) Visit to a manufacturing unit where the product may be used and/ or under
manufacture

16/10/2010

B2B Marketing
Chapter 2
Marketing is a system of interrelated activites designed to develop, price, promote and
distribute bith goods and services to a grp of customer.

The societal cponcept of marktng is a philosophy that defines the satisfaction and delight of
customers on a long term basis , decides welfare of public using a holistic approach for
marktng to reach qualifies organizational goals.

The 21st century


This centry has thrown upon us more challenges in the area of b2b markntg
1) it and growth of digital mktng
2) crm
3) globalization of int. markets
4) emergence of brand equiy as a business tool

New Business Paradigm

1) product improvements are based on new technologies and at times reduce the cost
of manufacturing
2) higher allocable surpluses i.e people having bigger buying power
3) availability of large variety of goods at very comparative prices
4) more knowledgeabe customer with increase advertising exposure
5) improved methods of product placement to bring them with an easty reach of
customers
6) superior a new media availability for better access to segmented markets
7) better techniques available for marketing research to keep marketers better
informed about current market needs

Marketers sell the product which can be classified as follows and it also provides us the new
market tuuesim:-
1) change products to products and services
2) change customer satisfaction to cust. Delight
3) change product quality to product perceived value by the customer

Existing industrial and business world comprises certain functional area which includes the
foll:=
1) marketing
2) finance and accounting
3) HRM
4) Production
Societal and physical factors for B2b ma
1) political and legal environment of the country
2) macroeconomic environ
3) geographic effects
4) moral values , ethics and beliefs of the populace

Companies which plans to enter int. markets for B2b has foll objectives
1) acquisition of resources
2) diversification plans of the co.
3) minimization the risk from competition
4) expansion of sales volume

Companies enter into int, markets taking the foll routes


1) importing and exports
2) licensing and franchising
3) turn key projrcts
4) joint ventures
5) wholly owned subsidiaries
6) tourism and transportation
7) management contracts
8) direct portfolio management

phases of marketing
mktng goes
1) opportunity based marketing
2) structured formula based marketing
3) customer centric marketing

marketers sell the products which are classifoies as follows ain b2b
1) consumer good including the foll
a) consumer durables like cars, refrigerators, ac etc
b) FMCG products like soaps, shampoos, petril
2) industrial goods include
a) capital goods like cotton nills, steel rolling mills
b) raw materials and components like Tv picture tubes, plastic, wood, cotton etc
c) consumables like power , water, gas
3) services like hospitals, hotel and travel agencies

There are 4 diff types of markets in b2b maketing:-


1) consumer market
2) business market
3) services market
4) global market

Focus chart for B2B Marketing

20TH CENTURY (FIRST HALF)


a) MARKETING
b) PERSONNAL
c) FINANCE
d) PRODUCTION

20TH CENTURY (70’S)


a) FINANCE
b) HRM
c) MARKETING
d) PRODUCTION

20TH CENTURY (LAST DECADE)


a) FINANCE
b) HRM
c) MARKETING
d) CUSTOMER
e) PRODUCTION

Philip Kotler “ Marketing is a social process by which individual and groups obtain what
they need and want through creating offerings and freely exchanging products and services
of value with others”(imp)

The American marketing association defines mktng as follows” marketing management is


the process of planning and executing the conception, pricing, promotion and distribution
of ideas, goods and service to create stages that satisfy individual and organizational goals”.

Marketing Defined
Market for the product can be defined as the geographic area in which most of the buyers
decide
The physical market and a virtual market which has laso emerged as it allows shopping by
ogging on to the internet
Note:- manufacturers are customers of raw materials just as consumers are customers of
manufactured products

Supply of Raw material Manufacturer/Contracter of raw material into saleable


product Actual consumer of products
Manufacturer has to buy or arrange the foll in b2b marketing
1) Human resources
2) Technology of information
3) Capital goods
4) Finance
5) Ancillaries like power and water
6) Raw materials

Buying and selling are legal transactions which are governed by a sales contract.
A sales contract has the foll characteristics:- ( at least)
1) at least 2 parties
2) A product/Service one party wants to sell and the other wants to buy
3) there is a price or consideration to be paid in exchange of goods and services
4) the exchange of products. Service with its price takes place with total consent and
willingmess of all parties concerned
5) each party must believe that the transaction must have been fair to them
6) the product to be sold must be a legal/ legitimitae product for the contract to be
valid and legally binding on the parties concerned.

There are three core processes n b2b marketing:-


1) product development process
a) product idea generation mostly by entrepreneurs
b) confirmation of the need of the product in the market by qualified methods
of market research
c) R & D for development or purchasze od technology
2) demand management process
a) continuous market surveys to keep a hang on the market pulse which wil
help firms t remain proactive to customer needs and market dynamics
b) pricing and related aspects of discounts, leasing options, distribution
networks, personal selling and advettising, promotion and credit and its
control in the market.
3) order fullfllment process
This starts with vendor application, purchasing, inbound logistics to
conversion /production/ manufacturing followed by outbound logistics.

Sales process

1) There are usually two parties to a sale i.e the seller and the buyer.
2) there has to be aproduct and consideration against which the seller is going to
transfer the produvct ownership yo the buyer i.e the price of the product.
Seller Customer buyer

Price

In a largr Contxt with several players offeringthe same product is also whwn a
situation emerges when there are a large no of buyers we can depict in a
graphical fashion as outlined below:-

Competitive Sellers Goods/services Market/large body of Buyers

Enquiry of the product

Advertising and Promotion

Changing Business scenarios in 21st century


1) opening of economies by various countries
2) global competition
3) better quality products
4) a large variety of goods and services on offer
5) high technology products
6) internationally established, exceedingly professional and well
structured channels of distribution
7) new channels/ media for advertising are now available
8) educated and well informed customers who are tech savvy and who
are also aware of their rights
9) internationally well structured consumer redressal forums

Market Environment In India (21st Century)

1) India looks at market globalization and this has had a positive impact in
indian economy post liberalization
2) India has recently undergone market recession
3) Large no of women in workforce including in works of strength
4) Large production capacity mostly idle
5) Emergence of IT sector and also its decline
6) Growth of management schools
7) Strong satellite base with Tv and multiplicity of channels which has given
jobs to millions
8) Invasion of Chinese products in various fields
9) Political problems including external and internal threats to India
10) Religious fundamentalism
11) Privatization of govt. owned firms
12) Genetic engineering and its effect on farm production
13) Rampant misuse of funds is very common in India

Present Scene in India

1) a good no. of multinational have started operating n our country.


2) Indian co. today are also banking on foreign technology and finance
3) Indian stock markets have registered major market upheavals in recent past
4) Terrorism in India has further down swiped industrial sentiment in India
5) Job market in India has slowed down
6) IT industry in India is currently experiencing setbacks.
7) Lot of firms in India today are downsizing/ Right sizing the size and status of
their co.

It is important to find out where does the market exists and for b2b marketing
answers to the foll. Questions are important:-
1) who wants the product?
2) when does he want the product?
3) Where does he want the product?
4) What price is he willing to pay?
5) What is the purpose for which he is buying the product?
6) What is the product do for him in his life?
7) What are the factors which influence the buyer when he purchases the
product?
8) Who are the competitors?
9) What are the plans of the competitors?

Categories of Buyers
For each firm there are foll categories of customers:-
1) The buyers
2) The non buyers who buy the competitive products
3) The non buyers who do not buy the product at all
4) The non buyers who buy the product only rarely
5) The vacillators( who can not make up his mind) who keep shifting bet the
firm and its competition

Marketing Mix factor Diff. types of Products


1) Marketing Research Consumer Durables
2) Product FMCG
3) Packaging Industrial Capital Goods
4) Brand value of product Indus. Raw material & components
5) Trademark Indus. consumables
6) Labeling Service
7) Price Events
8) Transportation People
9) Distribution Places
10) Sales promotion Properties
11) Advertising firms
12) Retail sales and merchandising Innovation
13) Personal selling research Outputs
14) Credit and its control
15) Training of sales personnel

Chapter 3 Marketing Management Concepts

Basic Concepts
Market Segmentation
The concept of segmentation focuses on a particular group of class of customers who
would be definitely interested in the product

Targeting Markets
Marketers have to decide which market they want to sell their product to and these
markets become the targets of the firm

Customers & Prospective Customers


Customers and pros. Customers are the people or organization that either need the
product or could be brain washed in buying the product

Product of Service
Satisfies the consumer needs or provides the benefits sought by the customer

Product benefit & value to The Customer


It is an imp area for sellers as better the value for money for the customers in his view the
better the chances of his buying the product
Value to the customer can be defined as follows:-
Value = Product benefits & its emotional value to the buyer as compared to its cost to the
customer including the time and effort costs.

CRM
It is a customer centric business strategy that requires alignment among people,
processes, and technologies to achieve growth and profitability.
The need of customers are given below :-
1) Known Needs- clearly perceived by the customer . Like need for a house
2) Unknown Need- Need for a low cost house in the vicinity of his office and
school complex
3) Unspecified Needs- the need for water and phone connections in the house
4) Need for customer delight- like free membership of clup when house is
bought
5) Need for social approval, need for peer group and friend circles
approaching and appreciating ur house.

29th Oct 2010

New Product Development

1) For development of product firms must watch out for foll areas
a) do they have the infra 4 pdct dev
b) can the allot or allocate the required resources, financial and other human
resources for the project
c) does the management accept that all research would not bear the fruit and still
ready to invest in the market
d) would the firm give the autonomy to the development team?
e) Does the firm have a history of development successes or failure

Efforts must have a continuous approach

Market Research Product Development Distribution Sales Force


Advertising & Promotion Customer Service Profitable
Sales

Project Development Process


Market Research Findings R&D Activities Product Engineering/ready 4 Prodn
Production

Organisational Buying Behavior

Org buys deals differently than other consumers in the market.


Such purchases by the firms has the following character
1) there are fewer buyers but these are buyers whoi can buy in large quantites
2) there is a close supplier and buyer relationship
3) geographic concentration of buyers is available
4) there is derived demand
5) the demand could be inelastic and is based on large no. of extraneous factors
6) professional purchases
7) we have several buying influencecs

Buyers will look at the buying situations which can be categorized as follows:-
1) first buyers when a new firm makes a purchases and an old firm tries out a new
product
2) re buy takes place when a satisfies buyer buys the product again
3) modified re buy is made when the manufacturer accepts customer suggestion and
the product is suitably modified to suit the firm
4) new task purchase depends upon the launch of new product and is planned
accordingly

System of Buying in the org will consist of the foll people


1) Initiators they are people who place the requirement of the product before the
firms authority
2) Users they are people who define the product with specifications and would
ultimately use it
3) Influencers they are people who influence the purchase decision, which brand
model to buy and from which dealer and manufacturer to buy
Eg- R & D managers and consultants
4) Deciders these are authorized people who decide on spending of money to make
the purchase
5) Approvers these are people with power of purchasing like the CEO and MD
6) Gatekeepers these are the people who will filter information and see that only
relevant info reaches the decision maker about the product

Behavior…Positivism & Interpretevism

Positivism
Prediction of buyers action which can be quantitative survey based
Consumers Rationale and weighing of alternatives is very imp.
With market study it can be predicted that X% customers will definitely buy the product
Interpretivism
This is understanding of consumers and practices and qualitative..
Each uses experienced by the consumer is unique and research findings can be subjective
It can not b visualized of generalized and it is not easy to predict how many buyers would
eventually go 4 repurchase of the product.

Competition Types
There are several type of competitor in the market as :-
1) Monopoly when there is only one supplier of the product in a given geographic
market
2) Oligopoly when the supplier are made up of as small no of major firms. Firms
making core raw materials like iron, steel , oil generally belong to this category
3) Differentiated Competition- it is a phenomenon essentially of the Indian market
industries divided into large scale organized players and small scale assemblers,
sellers of pirated goods
4) Fragmented Market- There are several supplies of the product in the market with
similar products and hence pure and perfect competition generally runs this
market

Firms get their competitive advantage from the foll. Sources:-


1) Differentiation- which can be made in either the product or any pf the other
marketing mix factors like price, promotion and placement
2) Cost Differential- with the help of economics and understanding of the economies
of scales has also experience curve of the firms, all firms can achieve the lower
costs and strategize their pricing to suit the market condition for gaining market
leadership
3) Response to market – understanding market needs and satisfying them at the
appropriate time gives the firm an edge over competition
4) Market Focus – this can be achieved by getting into a niche market and putting
the marketing resources like advertising, promotion, general selling in that market
5) Service – differentiation in service is difficult to copy unlike product differential
6) Vertical integration – when the firms take to manufacturing upstream root
products like raw materials and components and also dies its own retail in the
down stream area it gains cost effectiveness due to better inventory management
and also saves on cost besides indulging in superior production planning.

Competitor Strength

It could be in the foll areas


1) product differentiation
2) prices and discounts
3) distribution channels
4) cost of capital and ability to borrow fund at low int rates
5) loyal customers
6) size of purchase
7) manpower( committed and loyal)
8) R & D research 4 new produt technologyas per market demand
9) Government on
10) Hog brand eqity and image
11) Resource allocation

Competitors can be classified as per their strengths and mindsets of their management as
follows:-
1) market leader
2) major competition
3) minor competition
4) unsatisfactory competition
5) problem competition

Comparitive Action
If a firm can not beat the competitor it should join the game with similar/ diverse
strategies.

Marketing Plan Checklist


Foll information summary is required to need the competitive firm
1) activities
2) management
3) performance
4) USP of product and service
5) Market life cycle- attractiveness, growth, maturity and the decline stage

Financiual summary of the firm


1) Firms capital reserves/ resources
2) Future capital needs
3) Debt equity ratio
4) Cash inflows and outflows
5) Finance deployment areas like salaries, purchasing, advertisement

Competitors plan for market


1) Businesses in which the competition is involved
2) Product/services on offer
3) Market segment
4) Geographic coverage
5) Business history of the competition to include formatiuo date of rhe company ,
products offered by the comp. and the product dropped by the competition
6) Manuactuing or only trading
7) Annual sales total and prtodut wise sale
8) Annual profit i.e gross profit and profit generated by
9) Return on equity by the competitive firm by last 2 years
10) Existing problems, cash crunch, labor or any other problem
11) Salvage plans if any
Industry Situation

1) current volumes of business


2) growth ternd of the next two years
3) competitors and their product wise share of the ,arket
4) new entrents and competitors who have just left the market
5) trends effecting the business
a) economic
b) social
c) technological
d) govt regulations
e) demographic

market research analysis

1) description of each product in detail


2) product features & customer benefits associated with each feature
3) negative elements of each product
4) patents covering the products and intellectual property rights
5) possibility of covering the entire product range, related products, accessories

Who are the major Buyers?


Where are the buyer located?
Wahat motivates them to buy that product?
When do they buy the product?
Is their seasonality in pdt demand?
What is the market share of the competitive firm?
Is there a shift in the market share in tha last 1 yr?
What motivates the cust to buy from that firm?

Prepare a master list of customers


1) reasons y each customer has purchased a product
2) customers lost in the market with reasons
3) action taken to overcome resistance from customer

Market size and growth Potential


1) Size of the market in units and rupee value
2) Cahnnel members unit evaluation
3) Market potential for next 3 yrs
4) Competitors term of business
prices
performance guarantees
quality of service
payment terms
delivery period
Package size
Product variants if any

Competitive management
1) reaction time to competitive management
2) marketing strengths, efforts to increase market share
3) finance and ability to generate funds
4) operations, timely deliveries
5) purchase trough optimum use of funds
6) profits or lack of profits
7) reactive or proactive policies

Market Share & Sales


1) type and quantities for which they can make yearly purchase commitment
2) last three years purchase of their customers, competitor wise
3) last 3 yrs purchase from the firm.

Chapter IV
Sales Force Management

Sales manager have the foll roles to perform in the firm:-


1) defining sales policy of the firm
2) market research
3) pricing in terms of business
4) distribution
5) advertising publicity and promotion of the product
6) selection, training and motivation of the salesman
7) sales territory allocation
8) sales target for each territory
9) sales forecasting
10) expense budget for the dept and for each salesman
11) selling & cost control
12) generating reporting and controlling systems

Firms look for the foll qualities in their salesman:-


1) aptitude 4 hard work
2) technical knowledge as required for selling the product
3) positive outlook
4) good comm.. skills both oral and written
5) extrovert personality
6) helpful nature
7) requisite experience, if it is not a management trainee position

HR managers gets sales personnel in 1 of the foll ways:-


1) promotions from inside the firm
2) competitive personnel
3) casual application received by them
4) business school campus interviews
5) with the help of recruiting agencies

Selection of Salesman/ Saleswomen


The sales manager is guided by the foll factors whike selecting the sales team:-
1) products to be sold, its technology, uses
2) size of the firm
3) distribution channel
4) level of customers to be met
5) knowledge of the trade
6) selling aptitude
7) knowledge of market/ channels
8) knowledge of local languages
9) product knowledge
10) know of foreign language if sales have to done in other countries
11) health as traveling takes a big toll on salesman health
12) Duties of salesman whether he is selling in showroom or whether he is in
fieldwork

Sales Territory Allocation


It is a job of the sales manager to ensure that the salesman in his dept are usefully
employed, given equitable workload and given a functional work environment in which
they can produce best result.

Consumer Products
As the co. identifies the various consumer groups which are widespread geographically
the territories can be divided as given below:-
1) equitable sales potential ( while dividing north India rajasthan may have lower
potential and hence the sales manager in his discretion can add rajasthan to
harayana state as the sales territory.
Foll. Aspects should be understood:-
a) concentratiuon of business
b) ease of territory coverage which will help in reducing the backtracking for
the salesman
c) product range specific areas on the basis of demographic divide
d)

Sales Targets
the common method of target fixation is given below:-
1) territories total business potential
2) strength of sales team
3) competitive strength analysis in the market
4) environment affect business on the territory
5) targets must all be achievable but with a stretch

Sales Forecast
Sales forecasting helps the firm in foll activities:-
1) building production capacity
2) controlling inventory and dictating levels of inventory
3) pricing decisions
4) recruitment and training of salesman
5) increase in geographical area of sales based on potential sales likely to happen
6) providing after sales service, guarantee and warranty services
Sales forecast for the entire country is the sum total of forecast of all the territories plus
the plans of its exports mad eby its sales manager. Forecasting export trade is done on the
foll. Basis:-
1) country wise sales plan
2) service facility needed in each country
3) competitive products
4) general and competitive business environment in the countries
5) political stability of th country wiyh whom trade is being done
6) relan with foreign govt

Prospecting
This can be divided into 4 Parts:-
1) advantages of having skilled salesman in the technique of prospecting
2) learning the methods and sourcrs of identifying and locating the worthwile
prospects
3) qualifying the prospects i.e by understanding more desirable prospects by less
desiring prospects
4) understanding the relationship bet. A prospect and creative selling

Qualifying the Customer


Qualifying helps the sales person in identifying the best prospects on who to call. The foll
3 qustions are used for qualifiying the prospect I n the market:
1) dos the prospect meet with the co. policies
2) does the product fulfill the need of the prospect
3) what is the currentand future value of this prospect to the company?
P.R

KEY OBJECTIVES

Establishing
For ax a sales person wants to establish a new style of denim.

1) To get the agreement of the buyer about the need of the denim.
2) demonstrate the new denim to the key individuals.
3) convince the buyers that the price and other terms of business are
right and get the order.

STRATEGY & TACTICS


__________________

_____________________________________________________
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Approach Presentation Objection Close
up the deal

Approach - This can be defined as activity of the salesperson that begins


with making arrangements to see the customer or the prospect and ends
with start of
the presentation. Approach has three purposes
a) to get to see thye prospect or the customer
b) to put it in the right frame of mind for the presentation
c) to confirm the call plan

PRESENTATION

1) when the salesperson comes face to face with the customer the first
few minutes will make a vital impact on what will happen afterwards.
2) Summarising after the repo has been established , the salesperson
needs to have a technique of bridging the gap between social
conversationa nd very
serious business talk.

CALL PLAN VERIFICATION

Call plan has three steps


1) Establishing the objectives.
2) Gathering essential information about the customer
3) selecting the right tactics

SALES PRESENTATION

1) The sales person knows that unless he has a defined objective, has
obtained the essential information and planned the right tactics he
should not even
attempt a call on the prospect
2) All sales person should develop a benifit story using possible benifits
of the product and writing down a paragraph for each benifits that will
help
you during the presentation.
a) Benifit paragraph - comfort
b) benifit paragraph - economy
c) benifit paragraph - prestige enhancer/ lifestyle product
d) Benifit paragraph convineince
e) Benifit paragraph safety

Develop techniques after the story has been told to maintain prospect in.
a) customising or individualising the benifits
b) Using descriptive language
c) participation
d) DELIVERABILITY
E) pRICE OBJECTION

DEFINING COUNTERING
SALES SALES
OBSTACLE OBSTACLE
1. HABIT 1. STRESS BENEFITS OF
2. FAIR YOUR PRODUCT
3. PRICE OF PRODUCT 2. STRESS GOOD
4. COMPLAIN ABOUT YOUR QUALITY OF YOUR
PRODUCT IN MARKET PRODUCT
5. DETAILS 3. STRESS POOR
6. LACK OF AWARENESS QUALITY OF
7. COMPETITION COMPETITOR’S
PRODUCT
4. HIGHLIGHT PRESTIGE
OF YOUR PRODUCT
5. HIGHLIGHT
PERSONAL PRESTIGE
OWING YOUR
PRODUCT
6. HIGHTLIGHT PRIDE
7. HIGHLIGHT
ASSURANCES OF YOUR
PRODUCT
8. HIGHLIGHT STORIES
OF YOUR PRODUCT
9. HIGHLIGHT
EXPLANATION OF
YOUR PRODUCT
10. UNDERSTAND THE
MOOD AND MANNER
OF CUSTOMER
11. LEARN HOW TO
ANSWER THE
QUESTION OF
CUSTOMER
12. PROGRESS SIGNATURE
GIVEN BY CUSTOMER
13. REOPEN OBJECTIVE
MIND TO REASON

sales team has the following tasks cut out for them

1) researching for customers, knowing the buying habits of the


customers, understanding the likes and dislikes of customers
2) planning sales call from customers and the prospects for effective
results and thereby improving the profitability graph of the sales.
3) informing the customer about the companys plan for product
launches , pricing strategies and market offerings.
4) personal selling which the the most important part for B2B sales as
also the most mportant part of sales to various channel mambers.
5) providing an organising service to the customers for optimising the
use of product sold.
6) maintaining relationship with the cusomers through non-sales
contacts.
7) gathering market information and communating the same to the
company.
COMPANY ORGANISE THEIR SALES
TEAM IN THE FOLLOWING MANNER
____________________________________
______________________

Dividing their sales area into terrotories that can be managed by single
sales person which are easy to cover, have enough business potential
and do not
frustrate the sales person.
Correct recruitment of the ales team
training of sales personal
monetoring and supervising the sales team for ensuring that they
achieve their target, expense budgets and generate the sort of
profitability the company requires.
Motivating -
Appraisal

B2B MARKETING
INTERNTIONAL
=====================
=========

GLOBAL OUTSOURCING & MANUFACTURING -


_____________________________________

Companies have ben outsourcing their raw material and components


for a long time now(since the second quarter of the 20th century) due to
following reason-
a) low cost of lobor
b) low infrastructure cost
c) availablity of technology
d) availability of raw material
e) proximity to international markts
CLASSIFICATION OF COUNTRIES
_____________________________

cOUNTRIES are classified on the following basis

1) GNP (gross national product)


2) GDP (gross domestic product)
3) Per capita income
4) quality of life/ lifestyle of people across the world
5) Purchasing power
6) macro economic factors.

GNP is in a sence the sum total of a countrys economic activities and


can be defined as the value of goods and services produced during the
year from
the countries resources. The actual manufacture could take place in the
country or even outside the country.

GDP- This takes into accont the entire domestic production irrespective
of the fact that the production if from the indian resources or the
foreign resources.

Per capita income - Purchasing power parity tells us purchase value of


the local currency in hom country against 1$ purchase value in
US.Purchasing power
of local currency is compared to that of 1 us$.

Lifestyle- It is measured by taking into account the following aspects


1) life expectency
2) education trends relative to a country
3) healthcare programs
4) income and allocable surpluses in purchasing power
5) welfare of women

MACRO ECONOMIC FACTORS

Developing countries like india have their GDP distrubuted on


following lines
a) agriculture - 20%
b) Industry - 30%
c) Manufacturing-25%
d) Services - 15%

In a foreign developed country UK the distribution profile is given


below-
a) agriculture - 2%
b) industry - 32%
c) manufacturing - 12%
d) service - 56%

Distrubution pattern ...industrial goods

Manufacturer------------------->

as can be seen in industrial goods the sales is made either directly to a


customer or through a distributor.
capital goods sales is made directly most of the times.

Reasons -
1) technicalities have to be explained to the customer which are best
done by a manufacturer.
2) large sums of money are involved and the customer wants a best
price without a middlemens commission.
3) installation and probitioning of ..is involved which is best done by the
manufacturers engeeneer,
4) aftersales service is complicated.
Market communication

Body
of Flow of marketing circle…flow of money…bofy of buyer
seller money

Feedback,
information,satisfaction,
dissatistfaction

Marketing management serving demand through channels of


distribution

!) marketing managemt…marketing agencies…channel of


distribution…..market function…..marketing demand..

As can be seen in industrial goods the sale is made either directly to the
customer or made through a distributer ,capital goods sale is made
directly most of the time…. The reasons are:-

International market 21st centurty the nature of


commitment of firms tends to widen not just to cope
with international competition but also in order to
beat competition in their own countries. Following
steps are required
 In-depth or extensive marketing with in the country
 Extension of geographic boundaries
 Penetrating pricing strategy
 Advertising , promotional strategy
 New product plans
 New product to be sold in new markets
 Vertical integration

Because of fast changing market setting and business


environment it is best to take the following steps for
creating strategies

1) Market analysis---formaulating strategies----


implementing strategies ---- feedback
2) Marketing research to identify-------define market
segment----planning marketing program----
program implementation---controlling the
program—feedback

Management game….
Mckensy 7s model

structure

strategy system

Shared vision

skill style

staff

7s model
Strategy :- is a set of actions , plans and policies which are aimed at
obtaining sustainable competitive advantage for the firm

Structure :- these show the firms reporting line , organization chart,


functional devisions and their integrations
System: gives a flow chart operation, the process , quality control
system manufacturing process and information system

Style : it shows the working philosophy , the time Management amdn


behavior with superiors , juniors and with peers. by personnel of the
firm where the leader shows the way and the other follows

Staff determines the career growth plan of the employees training


patterns and honing of their intrinsic values.

Skills are the capability of the combined set of people in the firm

Shared mission:

Business to Business marketing -- specifics

Market specifics for industrial sales

Strategy is set of actions plans and policies aimed at obtaining


sustainable competitive advantage for the firm
Industrial sellers have to understand early the needs of the customer
and only then can t hey organize a perfect fit for the sale using their
products as it is or its modifies version provided the demand for the
modified product is efficient to justify the effort of modernization and
modification.

At times the new version may sell much more coz there may be latent
demand for it that surfaces once it is introduce in the market and can be
seen from the following aspects
1) existing products-competitive products-comparative
stement/assessment
2) best fit as per customer requirmemnt
3) assessment of modification needs if any
4) redesign the product- tested with the customer requirement
5) Gives sample for trial
6) Get customers feedback and act on it
7) Get a long range business perspective for the product

Industrial selleing is of two types


1) product sales
2) selling solutions

Competitions and their advantage

The companies marketing task starts with locate improvements,


opportunities and goes on given below
 improvement opportunity seen at customer premises
 creation of opportunities based on intrinsic company strength and
customer known or unknown needs
 Modification of applicable core competencies if required
 Locating other areas of business that could benefit from the
modification.
 Deriving a new profit and loss statement on the business
 Funds allocation for carrying out modifications if they are justified.

Products falling below can sell by customer testimonials


 Products improving productivity.
 Products saving on ,manufacturing time
 Product saving inventory space
 Products from JIT suppliers
 Products that adds prestige value to purchaser in the company
 Products that are lower in cost than competitive and yet do the job
equally well

B2b Marketing advantage


 Customer satisfaction
 CRM
 Providing options to the customers
 Add value to product
 Prom supplies or JIT supplies

Different approach for B2B marketing


Consumer marketing and industrial marketing differ in several ways
a) industrial buyers look for benefit that accrued from the product
usage where as consumer buyers look for value for money

Industrial buyer
 low overall purchase cost
 Ease of storage
 Easy inventory management
 Ease of product usage
 Training by the seller in product usage
 Longer shelf life for the product
 JIT supplies by the seller if required to keep current asset low and
improve cash flows

B2b advertising
 This is important for mainly for creating awarness about the
company, improving brand image and for proving products
technical specifications
 Companies can opt for technical journals pertaining to the buyer’s
business as media, besides at times journals pertaining to the buyer’s
business has also t.v can be used

B2B pricing
Pricing strategy is of foremost important in b2b pricing coz in the
competitive business buyers prefer low cost suppliers everything else
being common. However the buyer must be aware of certain hidden cost
that do not get reflected in the price quotation that companies submit to
the customer
Hidden cost are given below:
 Cost of certain spare parts essential to the products
 Cost of accessories required
 Cost of transportation
 Cost of instillation and commissioning of equipment purchases
 Cost for training of buyers personnel into proper usage of product
 Cost of user material and any other component
B2b payment terms
Industrial customers tend to prefer buying of those products especially
capital equipment generally on credit and the company offering longer
credit period in B2b marketing period is Usually preferred

Most capital goods are sold on the basis of sale of total package
consisting of the equipment
1) equipment
2) necessary accessories
3) recommended spare parts
4) installation and commissioning with required piping
5) training of buyers personnel in proper use and maintainence of
the equipment
6) field trials wherever required
7) guarantee and warrantee for the equipment

Buyer’s purchase view point


a) industrial customer tend to prefer buying product in organized
manner, b2b purchase decision are taken through their hierarchy as
given below 1) low value are decided by purchase officers 2)
purchase by material manager decide slightly higher value 3) real
high value orders are looked at by strategic management or by
evaluation committee that advises the purchase committee

selling team
manageing director
finance manager
r&d manager
production manager
purchase manager

Buyer’s team
Managing director
Technical mamger
Finance manager
R&d manager
Technical systems manager
Marketing manager

Market demand
Demand for B2b business are generated in the most unpredictable
manner and hence the demand analysis by the seller is a difficult task
The seller have to keep their eyes open all the time besides they have to
keep accessing the demand looking at areas outlined below
 Customer’s plan for expansion, renovation and modernization
 Historical business numbers
 Business or demad trends as predicted by industry pundits ,
magazines and journals
 New government rules regulations and policies
 New sunsitute products in the market
 Demand of the customer’s product that uses his logo

After Mid Term 26/11/2010

Business analysis
Market analysis Firm’s analysis Competitive analysis
Size of the market Level of customer Sales performance
satisfaction/customer
delight
Growth Prospects Brand loyalty Market share

Profitability Product quality Brand equity/ equity


status
Cost structure Service quality Objectives / goals

Channels Brand assurance & Marketing strategies


brand association
Trends Relative costs Organizational
culture
Factors New product Cost structure
activities
Managers capability Strengts &
than performance weaknesses
Capacity & capacity
utilization
Channels / sales force
ad/ promotion
Reaction time

Experience barrier
curve/ exit
Value Chain

Ques. What is a Business?


At every stage we have to understand our business, where do we stand and where do
we want to be.
Following need to be analysed for making an assessement abt the business
a) profit & loss
b) resource allocation
c) products leadership position
d) profit centres
e) org. str

Knowledge is Business
The seller must be fully aware of the entire business scenario that
affects the overall business and which include sthe area given below:
a) B2B marketers must have a detailed understanding of 2 aspects
i.e customer and customer intentions and furthermore they mist
understand the decision makers, business initiators, advisors,
evaluators and gatekeepers who keep unwanted supplies out of
their race through their clout.
b) They must know fully well the product, its USP , its benefits, this
has also utilatirian advantages to the customer. In addition B2B
marketers must become testimonials from other customers
c) Fully aware of major and minor competitors, theori streghts and
weaknesses,
d) Fully aware of general and competitive business environment in
which they r operting

Public Relations for B2B marketing

Def.. public relations can be defined as “ the process of understanding


public attitudes on relevant issues, interpreting these attitudes for the
management and then working either to go to org. policies and practices
with these attitudes or to modify the attitude themselves”
Publicity is only the aspect of PR job which covers the making of press
releases given regarding the firms activities and plans

Advertising Sales Target

PR
Sales Target

Advertising
Personal selling

Ad plus & minus points

+ Points
 Economic growth helps develop comp.
 New product mkt development, comp. keeps firm on their toes
 Helps in mktng efforts, increase mkt share
 Provides info to customer, ensure squality of product, increases
demand

- Points
• Expenditure can be avoided, creates comp. on items other
than price, like brand equity
• Creates entry barrier for competition, can equate business
possibility
• Can raise costs and prices
• Wrong info to customer can be given by false ad

Balance Scorecard

Balance score card

CUSTOMER FINANCE OPERATION ORGANISATION


To understand the holistic picture of a firm standing in the mkt it is imp for
the firm to address four areas which decide the possibility of successful
results in the firm which are outlined in above diagram

To understand the holistic picture of the firm standing in the mkt it is


imp 4 the firm to address 4 areas which decide the possibility of
successful result in the firm outlined above
Chapter
Marketing Research 4 B2B marketing

Marketing Reasearch
Mr is conducted to get the total maket potential , its possible growth and
strengths and weaknesses of comp in respect of mktng mix
factors(controllable variables in the hand of seller thru which he can control
the consumers)

Starting with the product mktng research can be conducted 2 get ino and
trends in the foll areas.

I is there a demand 4 the product


II If yes in which mkt segment
III) what is the level of demand
Is there a demand in peripheral segment, if yes what is the level
Is the prdt acceptable to mkt as it is or any modification is necessary
Is the package size acceptable
Are the prdct package, brand, trademark, label and logo eyecatching enough

Marker research Objectives

a) demand projection for product in a given area 4 the


acceptable period like 1 yr. this takes into ac the
historical demand of past years mkt dynamics and
changing business
b) competitive activiti
F) data analysis and report

Soignifivan elements of mktng rch process can be shown as

Ques. U r a manager in a MNC . How will u structure the methodology to


pick up competitive insights from the market and thereby understand the
competition in entirety.
2) As a manager working in a MNC based on requirement given above
will u use a proactive strategy, a reactive strategy or a combination of both
strategy. Which one and why?
Strategies for B2B Marketing (Ques Must)

MARKET RESEARCH OBJECTIVES:


1. Demand projection for the product in a given area for an acceptable period like
1 year. This takes intpo account the historical demand of past years, market
dymnamics and the changing business environmrny

Competive

3. Competite mkt share


4. Brand position
5. Competitive prices& brandequity
Advertising and promotion srength

NEXT RANGE OF MKTING RESERCH OBJECTIVE


NEXT Range of maktng research objectives are in ree custneeds
Wht benefits customers are seeking
Product usage with diff cust groups
Top of the mind recall
Price and quality perceptions
Reasons for brand preferences
Purchase decision procedures and who r the people involved in purchasing

THERE ARE TWO BASIC METHODS OF DOING RESEARCH:


1. PRIMARY RESERCH
2.SECONDARY RESERCH

SECONDARY INFORMATION:
1.Firms internal sources include profit loss statements, inventory levels,
sales visit reports, previous maktng research report
2. Incoming staff members who may be coming from competitive firms
3. Gov publications and notification
4. Trade publications
5. Competitor balance sheet
6. Publication of industry association(picky, cii, and phd chambers of
commerce and industry)
7. AIMA generals
8. Internet management
9. Market research organizations(ORMG) which sell market research
Sales statistics of product delers
Foreign giv data etc
Publications like RBI financial institutions like IDBI, ICICI AND UTI
etc

ADVERTISING RESEARCH FOR B2B OPERATIONS:


Advertising research is a part of maktng research which is confined to
development of advertising plan, creative wrk, mkt segments and best
possible media which would catter to the segment. Following research
steps are available
1. setting if goals for reseach
2. Finding resources of secondary information
3. Analyzing secondaru data
4. Planning samples for primary research
5. Data collection
6. Data analysis and report writing

SIGNIFICANT ELEMENTS OF MARKETING RESERCH PROCESS


A CAN BE SHOWN AS FOLOWS:

Steps of MR
Define problem/research objectives --- Define the research
pblm------------Data collection------ >Analyse te data----Prepare the
final report
DISTRIBUTION OF GOODS: (industrial goods)
Manufacture ---distributors-------customer

CONSUMER GOODS:
Manufacturer -----customer
Manufacturer ----sole distributors ---sole distributor own
channel
Manufacturer ---area distributor------dealer reailer
CHAPTER 8.
STRATEGIES FOR B2B MAGMTIMP

1. Is key to present day planning for following reasons


2. Firms hv to make their slection on various strategic options
3. Business environment is constanly changing with pace
4. Long range views required instead for fire fighting plan.
5. Strategic analysis is needed to grasp the real issues facing the
market.
6. Resource allocation need to be planned to ensure tht unfruitful
tasks are eliminated from the allocations.
7. Both horizontal and vertical communication and control system
should be in place
8. strategic marketing/ should help in keeping business ahead in
copmpetition in market change process.

MANUFACTURING IN INDIA IS CATEGORIZED AS FOLLOWS:


1. LARGE SCALE INDUSTRY
2. MEDIUM SCALE INDUSTRY
2. SMALL SCALE INDUSTRY
3. COTTAGE INDUSTRY
4. COOPERATIVE SECTOR
Differentiation can also be made as per nature of competition
outlined below:
1. MONOPLOLY: where there is one manufacturer of the product
2. OLIGOPOLY: when there are small number of marketers say 4 6
3. FRAGMENTED: IN which there are large no of manufacturers
4. SECTION FRAGMENTE: in several sectors like computers a
ACs. there are two categories of manufacturer i.e the branded
and unbranded manufacturers who exist in the small scale sectors
with several players in each group

MARKETING SRATEGY FOR B2B


This should be made taking the actual ground situation considering
the types of manufacturing units in competition and how many of
them exist
Business environment can be categorized as:
a. general environment
b. competitive environment

Next step is to analyse the situation before planning the marketing


strategy. All analysis is done for 2 secure areas:
1. EXTERNAL ANALYSIS: most of the things which the firm need

to know is outside the firm


a. the market and its relevant segment
b. customer
c. competitor and the competitive environment which
is also outside the firm.
2. INTERNAL ANALYSIS:
A. firms performance
B. policies and plans of the company
C. objectives and deviations between obj and performance
D. resource allocation for achieving the objectives in future needs to
be analysed , before planning marketing marketing strategies.

PRODUCTS AND MARKETS CORELATE AS PER THE MATRIX


CHART GIVEN BELOW:
I.
MARKETS
MARKETS EXISTING PRODUCTS NEW PRODUCTS
Present markets market penetration product expansion
New market market exapansion differentiation
and product

II.
COMPETITION :

EXISTING COMPETITION NEW


COMPETITION
Present market penetration price wars
Market extension promotion plus price promotion

SRATEGIC COMPETITIVE ADVANTAGE:


For planning strategic competitive advantages following methods are
used in the market:
1. plan business scenario, the shape and size of the market
after evry three and five years.
2. plan your market share on basis of feasibility
3. resources including cash flow need to be utilized for
maximizing the chances fo achieving the objectives.
4. focused on core competencies of the firm and synergise
efforts for fully exploiting them.
CORE COMPETENCIES OF NY FIRM ARE:
1. technology
2. marketing
3. finance
4. production
5. human relations
6. government relations

STRATEGIC MARKETING DECISIONS WHICH NEED TO BE


TAKEN ARE GIVEN BELOW:
1. With international players coming to India coming technology
will change rapidly.
2. Indian firms must invest in R& D or purchase latest state of art
technology to keep abreast of the competitions or even go ahead of
the competition.
CUSTOMERS OF TOMMOROW IN B2B MARKETING LOOK
FOR:
1. PRODUCT PERFORMANCE IMPROVEMENT
2. product technical superiority
3. easy availability of the product
4. financial assistance like leasing
5. price the sensitivity of the market need to be understood and
decision on pricing taken accordingly
6. Joining hands with technology leader of the product will give
quality value accretions in the market.

CHAPTER 9.
COMPETITIVE ANALYSIS

Competitors are evaluated on following parameters:


1. Wht are their business goals and objectives
2. Wht is the commitment level of the management and stakeholders
of the firms in competition
3. How do the managers of the firm view their growth prospects
4. What is the cost structure, financial structure, cash flow position
and assets and labilities of the competition
5. How do suppliers , financiers and distributors with their systems
in place view the competitive firms
6. What is the track record of meeting financial commitments and
other obligations of competitive firms
7. Are their product specifications inline with Indian standards
8. Can they meet world standards or not
9. how are the international dealings of competition
10. Is the competitive firm exporting or importing or doing 1 of two
11.where do they have positioning of the product: up market or for
the masses
12.Is the product pricing in line with their product positioning
13.Are their advertising and promotional efforts congruent with
product positioning
14.How is the firms PR efforts rated by the market
15.How is firms brand equity rated by the market
16.What are the firms core competencies
17.What are the firms strengths and weaknesses.
B2B 2/12/10

Strategig Marketing Planning Process

1) Foll steps are needed to make the


a) analysis of external environment
b) study of firms internal strength and weaknesses
c) idea penetration for planning
d) brainstorming for prioritizing idea generated
e) customer behaviouer analysis
f) competitors analysin
g) market analysis
h) draft annual and short term plans
i) final plans with forecasting of sales and cash inflow

2) Customer analysis
This includes the foll elements of internal information, processesing guided by
external info and stimulai….
a) beliefs
b) perception
c) attitude
d) preferences

Market ananlysis
Foll needs to be understood when analyzing the market
a) market sizw, actual and potential
b) market growth prospects
c) maket product wise profitability
d) cost str
e) distribution pattern
f) success parameters

Segmentation & Positioning


Segmentation helps b2b firms a follows:0
a) creates planning focused marketing programme
b) new product launc is creating competiutive advantages

how to segment the customerin b2b marketing?


a) benefit to the customer
b) product uses by customer like heavy usage
c) brand loyalty
d) product beci=oming status symbol
e) geographic segmentation
f) demographic
g) lifestyle / psychographic divide

B2B industrial segmentation

Industrial buying of raw materials and componesnts from supplier must address the
fol issues
a) company size
b) innovative companies with a lead user concept
foll make for a good market segment for a industrial products:-
a) the segment should of adequate size
b) segment should be concrete with justified measurable base for each segment

Product Positioning
Foll steps are needed
a) identify a relevant competition
b) to dreaw thw differential benefits and attributes d\significsnt to the segment
where the firms score better thamn the competition
c) delineate firms and competitors current position
d) sellout/setout segments
e) select positioning strategies
f) communicate the position

Costs volume and Experience Curve


a) Marketing strategy are needed to balance the core competencies of firms
with businedd environmrnt change cosntantly taking plae are considered
essential for long term well being and growth of the firm
b) In order to reduce the loss and profis the foll is required to be done
1) integrating marketing and prodn plans
2) making an objective of high volume and ow cost prodn is a result
3) focus on market share
4) gain cost leadership

Cost Leadership
This is gained through:
1) technological advances
2) input from suppiers and cust
3) economies of scale which help in reducing the fixed cost as for larger prodn
rentals, supervisors salary, and other overheads do not change very mich and
therefore the unit fixed cot would nsee a gradual reduction

Experience curve
E. C which helps in reducing the variable cost as with passage of time the workr get
to knoe =w the working proper and wastage is reduced besi\
This is most valid in :
a) high labor cod\st industries
b) complex assembly line operations
c) prodn of hign no of stanadard products which helpo wirker in repetitive
works

Experience cost curve cost reduction comes from foll reas:-


a) labour efficiency
b) work specialization and methods improvement
c) utilizing state of art technology and new prodn processes

Portfolio Management Analysis

Portfolio analysis takes place as also takes into account that largr multiproduct
firms have synergies within and lead to provide resource sfro growing their
attractive businesses, divesting, poor performers with unatteactive profit / losses.
They lead to divert resources from mature and stable businesses to attract a new
promising businesses.
Portfolio analysis empowers managers to balance fuature and currenet
opportunitu=ies by accessing business attrativeness and competitive position of the
business in a 2 dimensuional matrix.
PRESENTATION BY SIR
Globalization:
Combines (economiecs+technologies+social+cultural+political)forces
among diff countries.

192 countries on planet


More than 130 practice mixed economy

“ The diminution or elimination of state-enforced restrictions on exchanges across


borders and the increasingly integrated and complex global system of production
and exchange that has emerged as a result”
- Tom G. palmer

1) FTA
2) Custom Union
3)
4) Political Union (Mirage)

4 Pillars of Globalization
1) globalisation through trade
2) globalisation through investments
3) globalisation through human resource
4) globalisation through exchange of knowledge

Globalisation is:-
a) Accountability
b) Terrorism
c) Shrinking world
d) Integration of economy
e) Equality/ inequaity
f) Communication
g) Recognition to brand
h) Trade Vs aid
i) Outsourcing
j) Technology / internet
k) Free trade
l) Culture
m) Capitalism
n) Brands
o) Exploitation
p) Poverty
q) Growth
r) Monopoly power
s) Environment

Globalization can be democrayized, shared and shaped by:


Pooling national sovereignty
New policies and management, best practices, codes of conduct
Social innovations, new market creation
New ter sectoral partnership
Int. agreements

Chracterstic Progression Pattern of market

1) Domestic market
2) Int mar
3) Multinational
4) Continental
5) Global Market

12 major ports
108 small ports n India

Internationalization:
Refer to the importance of international trade/relations/treatise etc
Among /between nations

Globalization is the game of :


1. accountability…..wto.
2. terrorism
3. shrinking world
4. technology/the internet
5. free trade
6. culture
7. capitalism
8. monopoly power
9. environment
10.poverty
11.growth
12.exploitation
13.brands
14.outsourcing
15.trade versus aid
16.recognition
17.communication
18.equality/inequality
19.integration of economies

Hence in the era of democratic change:


Can be democratized, shared and shaped by:
1. pooling national sovereignty
2. New policies and management, best practices. And codes of
conduct
3. social innovations new market creation
4. new inter- sectoral partrnerships
5. international agreements ,treaties

Characteristic progression pattern: how does a market involve..


1. Domestic market
2. International market
3. Multinational market
4. Continental market
5. Global market

Factors contributing to Evolution


1) Maintainence of competitive edge by firms
2) Dynamics of economic scene
3) Aspiration to capture more markets

The tipping Point


1) Market saturation
2) Trade deficit
3) Foreign competition
4) New market
5) Opportunities
6) Liberalization/ globalization

The 3 strategies possible in int arketing are:-


a) global market
b) multi domestic
c) hybrid

in global strategy the firms adopt and adapt their int planning on the lines of single
global strategy
co. having diff products, brands and marketing features for each country follows
multi domestic strategy
a combination of the above to is cakled a hybrid strategy

Advantages to global or int marketing for India:-


1) can leverage our low labour cost as a cost leadership advantage vis a vis
competition
2) get foreign exchange as per partial convertibility of rupee

disadvantage for int marketing:-


1) currency changes exchange rate fluctuation
2) countries strategies for foreign firm
3) lack on int experience

managers must be aware of int complewxities . the foll needs to be considered:-


1) global perspective i.e is their product accepyible in the global markets or
does it need any modification to ensure its acceptance
2) options available
3) possible strategies
4) int. marketing and govt relations
5) advantages of int marketing tpo the firm

there are two typer of force:-


1) driving forces in the world business
a) world wide tv network and www have driven world market
b) technology helps in reducing human drudgery
c) costs- the cost of the prdct to the customers is of usually of vital interest to
him
d) quality of prdct shud meet of exceed cust requirement
e) comm. Aand transportation tech has broadened the market place as prdcts
get knowned, re demanded and can be transported speedily with moderm
fast means of transportation
f) restraing forces-firms/ countries expertise for eg India in software gets the
right leverage for firms in int markets.
• Historical demand of products in local market
• Comp frm the co. zone of the business enterprises
• Management myopia i.e firms may have short sighted managers whi
consider tha the profit from the countrys market shud be enough
impetus and soing global wud be awaste of time and money
• Organizational culture this at times restrict operation oversees
• International barriers (Imp in exams) – some countries do not
encourage outsider to come to their country and do business their.

09/12/2010
International strategic management process
1) Ethnocentric orientation – a firm/ mnc of ethnocentric orientation… will rely on
value and interest of parent country formulatind and implementing strategy.
Primary emphasis is on profit and the firm will try to run its operation oversees in
the same manner as it runs at home
2) Polycentric- a mnc with polycentric predisposition will tailor its strategic plan to
meet the needs of host country culture . if the firm operates in more than one
country the overall plan will be adopted to understand the needs and sensibility of
the host country.
3) Regiocentric predisposition- a mnc with a regiocentric predisposition will be
interested in oth profits as wel as public acceptance at a regional level. In other
words regiocentric predisposition will imply an acceptance of both ethno and
polycentric orientation
4) Geocentric- a mnc with this approach will view operation from a global
perspective . they hire the best people in the industry irrespective of their religilion,
region, nationality.
Steps in strategic management process in international marketing

Typically the strategic manag process of an int. business comprises 4 major steps :-
1) scanning of globl environment
2) formulation of strategies
3) implementation of strategies
4) evaluation and control

Conduct Environmental Analysis

Formu;late Int Marketing Strategy

Implement strategy

Measure and evaluate Performance

12/12/10
ENVIRONMENTAL SCANNING
Scanning of external environment provides mgmt with accurate
forecast of trends tht effects the future of businesses
External environ comprises economical, political ;legal forces
cultural and technological forces
Internal environ comprises of three specific areas
a. Mission statement
b. Physical resources
c. Personal competencies
The way in which value chain analysis can be used to bring these
resources together in the most profitable manner

MISSION STATEMENT: a mission statement is an enduring


statement of purpose tht distinguishes one business from similar
other business
It identifies the scope of firms operations in product and market
terms

Value chain analysis

Primary Activity Support Activity

Operation Firm in first place


Outbound logistics HRM
Technology Development

1) the value chain stipulate that the total revenues – total costs if all activities
underytaken to develop and market a prdct or service will give revenues
2) a firm may be profitable as long as total reveniue exceeds total costs which are
incurred in creating and delivering the product or service, every firm will have its
own value chain
3) management of any business shud understand not only its own value chain and
operations but also of the competition , the sullpiers of the competition and the
distributors value cahain.

Chapter- ,Domestic HRM & International HRM for B2B Marketing


Int businesse and specifically b2b businesses must procure, motivate, retain and effectively
utilize services of people both at the corporate office and their foreign plants.
IHRM is an interplay bet 3 dimensions, i.e HR activites, types of employees and country of
operatin
6 function of domestiv hrm are
1) HR planning
2) Employee hiring
3) T&D
4) remuneration
5) performance management
6) industrial relation

Growing Interest in IHRM, Connotations (implication) for B2B Marketing


a) the rapid growth of globalization has increased the no and significane of
MNC which inturn has increased the mobility of HR fir b2b operations
b) effective management of HR is being recignised as a major determinant of
success of failure in b2b operations
c) under performance of failure in nt. Assignments can prove to be quiet
expensive
d) implementation of global strategies is being limited by shortage of
international management talent
e) HRM has alwaysa played a significant role in networking of organization

Comparison of Domestic HRM & IHRM

Broader Perspective
External Influence
IHRM

Risk Exposure Involvement of employee life

Additioanl activity of IHRM

1) HR planning
a) difficulty in implementing HR procedures in host country
b) difficulty in time, strategic business planning in HRP and vice cersa
c) providing developmemtal activity for int managers
2) Employee Hiring
a) ability to mix with org culture
b) ethnocentric, poly, geocentric approach to staafing
c) selection of exptriates
d) coping with expatriate failures
e) managing reptraite process
3) T&D
a) emphasis on cultural training
b) language training
c) training in manner and mannerism ( courtesy)
4) compensation
a) devising an appropriate strategy to compensate expatriate
b) minimizing discrepancies in pay bet host and third country nationals
c) issues related to reentry of expatriate in home countries
5) performance management
a) constraints while operating in host country needs to be considered
b) physical distances, time diff and cost of reporting adds to the complexity
c) identification of raters to evaluate the performanv=ce of a subsidiary
6) induastrial relation
a) whos hud handle ind problem in a subsidiary?
b) what shud be trade union tactics in subsidiary?
c) what shud be the attitude of parent co towards union in the subsidiary ?

Managing int HR activites for b2b Marketing

HRP- Human Resourec Planning


It sis the process of forecasting an org future demand 4 and supply of te right type of people
in the right nos.

IHRM Process

Human resources Planning

Recruitmant & Selection

T&D

Performance Management Organisational Effectiveness

Remuneration

Repatriation

Employee Relation

16/12/2010

Chapter Strategic Audit

The 4 main components of strategic audit as given :


a) marketing concept
b) behavior concept
c) financial analysis
d) balance sheet

Marketing
Evaluating the marketing strengths of the firm we examine the foll areas:-
a) Marketing environment- markets, customers, brand equity, competition
levels, economic trends, money supply position in market, legal issues, social
development, causes and problems besetting in the market.
b) Market action- products, pricing, distribution, channels of distribution, ad
and promotion, personal selling and publicity.
Real questions to be asked during strategic audit are summarized
below:-
1) Customers primary and secondary level of satisfaction r always derived from
the product, the idea of product as soled by the firm and the customer
viewpoint of what product is he purchasing
2) Environmental issues shaping the market, competition and the customers,
3) Firms special skills as compared to competition and market
4) Marketing problems and opportunities the firm is facing today and may have
to face in future

Market Segments for Strategic Audit (Imp)

Demographic Geographic Psychographic Prdct Usage


Variable Variable Variable Variable
Age Country Lifestyle of Heavy users
consumers
Sex Climate Personality of Medium users
consumers
Family Size City size Product Loyalty Light users
No of children in State as a unit Product awareness
family
Occupation Population density
Income Countries main
religion
Education
Religion
Social status

Environmental threats and opportunities


Firms ned to have a constatnt vigil in the foll areas:-
a) law and politics (Legal & Political environment)
b) competition
c) suppliers in the market
d) demographics
e) understanding the consumer in the market

Strategic Audit- (imp)- It shud trace the firms growth and standing in the market
place which can be done based on the foll parameters:-
a) market growth
b) acquisitions
c) distributuin channels
d) pricing policies as governed by the foll decisions:-
i) elasticity of mkt demand
ii) govt price regulation
iii) competitors
iv) pricing and promotion
v) price and quality
vi) product strategy
vii) ad and promotion

Organisational Behavior )imp) – for b2b strategic audit the study of organizational
beha\vior takes place in the foll manner:-
a) manager, supervisor and worker- individual behavior depends on persons
education , knowledge base, skills, experience relevant to his present
situation in the firm, family background, family life, any negative history
(say of violence)
b) energy and motivational levels of employers and employee
c) attitude towards firm and with each other
d) team work

Financial Analysis
The audit must take into account that the financial analysis is the starting point of
… strategic audit as also of the management decision making process

Income & B/S


This is the mirror image of firm as it reflects strengths and weaknesses at a given
point of time which in cae of Indian co is 31 march
The BS give the firms resources, its debt & equity base and is an absolute summary
on its assets and liabilities.

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