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Understanding the main features of the communication for the companies which sell products or services to other companies or non-profit organisations. First, we need to get a good insight into the different types of Business to Business communication depending on whether we are dealing with entering goods (B to B to C) which are sold to a professional partner but which will be resold to individuals, or with foundation goods, facilitating goods or autonomous projects. Understanding the concept of derived demand which implies a strong dependence on the final market, but also the possibility of getting involved at various levels in the value chain. Realizing the importance of inter-individual relationships and thus, of personalized communications in the marketing strategy. Understanding that industrial purchase is not realized by the procurement department only, when it is a strategic purchase, but by all the members of the buying center. Being able to identify the members of the customer organisation who have an important role in the decision process, whether they are prescribers, users or deciders, in order to communicate better than competitors and to secure the contract.
If you want to get a better understanding of the Business to Business communication from a company to another one or to an organization (local authorities, administration, association), it is necessary to have a good overview of the concept of supply chain and derived demand. Then, a mini-case will give us the opportunity to appreciate the importance of inter-individual relations. They must be as personalized as possible because the men and women in the supplier company represent the most important media to communicate with the customer company. They underlie the Customer Relationship Management (CRM) which is to be defined. In the third part, we will examine specific media such as tradeshows and trade press, company brochures, catalogues and technical documentation. The pretext-studies represent a real communication tool, while maintenance turns out to be an excellent source of data of great use for the communication plan. Training the customer's employees along with quality management also helps to better develop Business to Business communication.
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The supplier/customer chain presents two main consequences: dependence on activities located downstream from the supply chain and possibility of action at different levels.
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This way can be analyzed reactions to: structures and specific shapes of seats lateral supports, bucket-type seats - more or less hard-wearing or soft seats textures;
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First target: the manufacturers The first action level remains the one intended for the direct customer, the reel producer and the stockings manufacturer (Dim, Well, Le Bourget, Rosy) in the stockings supply chain for example. In fact, if Dim doesn't choose Lycra, all other efforts by DuPont will be useless. Which targets are to be identified within Dim company? The Production Manager: In order to communicate efficiently with him, it is essential to analyze his main motivations. Defined by management, they are mainly the gain in productivity, the respect of the brief in terms of quality and the compatibility of the new fiber with the company machines. The Lycra salesman has to show him that the fiber can improve performances, especially productivity ones, and that it fits with existing equipment. A comparison demonstration is generally organized to compare the resistance of different fibers to stretching due to the rolling speed. Next, performances observed by the supplier at other industrial customers, who are Dim competitors in our example, have to be pointed out. Then, the customer has to be assured collected information will remain confidential: it is best done by working out the average performance obtained by four clearly identified customers/competitors. But only the average is shown, not the data of every competitor. The numbers of weekly machine stops and their average duration have to be taken into consideration among others. If the average performance of Dim competitors is higher, the Lycra marketing manager can then calculate the profit loss that this difference represents for Dim as long as this one has not achieved the average performance. This amount, estimated weekly, is then assessed on an annual basis taking into account the different production teams. It makes it possible to achieve a higher amount and to encourage the customer Dim to work with Lycra to catch up with the best technical performers. Thanks to this type of comparison, Lycra can thus be seen as a technical facilitator. When, in the comparison exercise, Dim obtains a higher score than the average of the chosen sample, it can not be argued that the company will catch up technically. However, the exercise has helped to develop good relationships, by showing that Lycra is a professional supplier, with a good technical knowledge of his customers, respectful of data confidentiality, unbiased and flattering. Finally, by handing a summary of the results to your technical interlocutor, you confer him value in the eyes of his executive committee. Then only will invitations be proposed, on the occasion of a tradeshow, PREMIERE VISION, EXPOFIL in Paris, MODA in Milano, or when the company wishes to show a renovated production tool or a research center. If these are geographically too far away, the invitation will be to the national head office: the only luxury will be the highly skilled level of the people in charge of the reception. The visit of a company with a similar activity,
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In a realistic way, figures speak for themselves: the best turnover rate is obtained by Lycra stockings over those which do not contain any. The sales man then insists on the fact that this very high performance is obtained despite a clearly higher (4 instead of 2,6 ) consumer selling price. Doing things this way, the sales manager positions Lycra as a facilitator of commercial performance. The customers sales manager is then prone to ask the marketing manager: what are the features of the future range of product? does it contain Lycra, so much demanded by customers?
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We can guess that the arguments put forward will vary according to the different interlocutors. Technical documentations thus present the range of Lycra with its variety of fiber thickness and assembly possibilities (cf. figure 13.5). Besides, it will be necessary to select internally managers with different backgrounds, matching as well as possible the profile of people to be convinced at the customers.
Exhibit 13.5 An adapted argumentation
To be translated
Second target: the distributors The second action level is the distribution, mainly with:
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Third target: the consumers The third conceivable action level is the final consumer. How to reach him to explain him the qualities of Lycra and to help him to distinguish this fiber from the other fibers proposed by competitors? Means to be used: The first vector of information remains the product itself with its packaging. The Marketing Department will try to obtain the presence of Lycra logotype on the packaging, next to the brand logo of the manufacturer, Dim in the example. This presence, the size of characters, their color and the relative space in comparison to other information printed by Dim will be negotiated with Dims Product Manager. The other vectors of information for the consumer remain the classical media, mainly womens magazines, posting and television for Lycra. Possible reactions of the customer-producers marketing department: Desire to use an allied Marketing. Regardless of the technical qualities of Lycra fiber, the customerproducer will first try to benefit from the different promotional actions of the Lycra brand, which can support his own brand-producer actions. Fear of a loss of identity for his own product. The producer can fear consumers might fail to differentiate Dims own qualities from those of the incorporated Lycra fiber. The stockings market
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Example from a women's magazine: Lycra presents nine creations by labels from various fields: from furniture to jewellery, including footwear; boosting a selection of its customers, but at the same time urging them to be more creative.
Action 4: There is a fourth way for the customer-producer to collaborate with the supplier Lycra, with the customer's product present in the supplier's advertising. The supplier will choose a product with a good image, in other words outstanding because of its high degree of innovation or its esthetic value, but above all produced with the material or the process that he wants to put forward in his own campaign. Through this choice the supplier can boost some of his customers; but at the same time, it is an incentive for the others to be more creative.
Exhibit 13.8 Visual supports of Lycra's press campaign
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As a summary, presentation of the Consumers campaign to demonstrate the pull effect of Lycra to different professional actors, producers and distributors.
Action 5: The fifth advantage proposed by the supplier does not directly apply to Marketing. In fact, a technical support can be offered to technical, functionnal and production services to realize the first production involving the new material or process. Depending on the case, a medium-sized customerproducer will mainly expect a technical support, especially when getting to achieve a new know-how. Action 6: The sixth collaborative mode is a consequence of the supply contract. When the agreement concerns a supply of material and equipment, negotiations may give way to a financial participation in common actions: it is sometimes the case for promotion actions such as events at the distributor's.
Exhibit 13.9 Presentation document of the new Lycra tag to industrial customers
Dealing with the customers' customers, Lycra contributes in the commercial performance of its industrial customer by trying to trigger an even stronger derived demand. In order to be able to offer such a commercial partnership, Lycra first develops a technical partnership, mainly at the conception stage. This example illustrates the many possibilities of action, in B to B Marketing, over the different actors within a supply chain and an elaborate brand strategy perceived as a performance facilitator by its industrial customers.
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If you want to communicate efficiently in Business to Business, choosing messages suited to the respective motivations of each targeted manager is a priority. On top of that, you must speak the same language, that is to say use a system of reference as similar as possible and get the calculations to fit with the customers choices: for example weekly and monthly performances according to the customers practice.
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After presenting the various fields of business to business, the notion of supply chain is analyzed to show the two main specificities: - Dependence on the final market when you are at the beginning or in the middle of the value chain, - Ability to communicate at the different levels of the value chain, whether in a market research outlook or in an influence communication one. Studying your customers customer is generally a good way of approaching your customer favorably. On the other hand influencing your customers customer belongs to a costly type of communication which chiefly requires a brand policy, not yet really widespread in business to business. The detailed analysis of the Lycra/Dim case helps to understand the various entrances you must take to break into the fortress defended by the competitor. For each of the customers targeted managers, it is necessary to develop a fully personalized tailor-made communication, trying to match his professional motivation, his expectations and above all his difficulties. Besides, this case illustrates how a buying centre works. For a strategic purchase, buyers are not the only ones concerned, you need to take into account the expectations of users, of internal prescribers, of external prescribers and sometimes of some deciders. Customer Relationship Management (CRM) is more and more essential in companies: it enables the various members of the supplier to exchange, uncover and exploit useful information. Before any negotiation, CRM makes it possible to find out: the current buying stage, the buying scenario and personal and professional information about the main interlocutors. Use of the main tools of CRM can be hindered by the fact that some commercial engineers are reluctant to provide personal information they obtained through almost friendly relationships.
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1. 2. 3. 4.
5.
6. 7. 8.
What are the specificities of communication of companies which sell their services to other companies or organizations? What are the main differences in terms of targets? When goods are sold to an intermediate integrator who will resell the whole to an individual as final customer, which are the possible communication strategies? Why is it not sufficient to know the Purchasing department to develop an effective communication with the customer company? How can you develop an inter-personal communication with the main members of the buying centre in the case of the sale of a strategic product such as a machine-tool or an ingredient which is indispensable and significant in the cost price? Your company sells fully integrated software. As a commercial engineer, you are in charge of the negotiation with the customer company which is going to extend an invitation to bid. Which are your priority targets among the buyers, the users and the internal prescribers? Can you use the information collected with previous customers to try and convince your interlocutors that your offer is the most appropriate in the present case? Which conditions are then to be respected? Which types of communication should you favor with users of the customer company? Why does Customer Relationship Management turn out to be an indispensable tool in the communication strategy with key-account customers?
Source: www.airbus.com In his product portfolio, Airbus has gradually brought in product answers to all the needs of airlines in terms of range or seating and freight capacity. The market segment above 440 passengers is the only one which hasnt been dealt with in its first twenty-five years by Airbus, leaving Boeing in a monopoly situation on the verylarge-airliner segment. Airbus has logically decided to enter this segment by developing a new family of aircraft A380 which will come in passengers versions with 4 models from 550 to 800 passengers (and different ranges), a combined model (400 passengers + freight) and a specific cargo version. Launching a new program is always tricky: besides technical problems, customers, i.e. airlines, have to be convinced to place orders for an aircraft which only exists on computer screens. Since 2002, Airbus has been evenly matched with Boeing, the historical leader, for delivered aircraft, airline orders, manufactured aircraft and even for value for year 2004. Airbus credibility has grown with every new product: the A320, more economically efficient than its direct rival and, more recently, the tandem A330 (twin-engine jet) and A340 (four-engine jet) which enables to optimize costs for a given airline and destination, in accordance with the number of passengers to carry and of the covered distance. One of the key factors of Airbus success, curiously not copied by Boeing, is the commonality, i.e. the family spirit : its practical translation is the percentage of parts common to the different aircrafts of the range. This feature reduces maintenance costs (storage costs of spare parts, training costs for ground technicians) but also training costs for pilots and their operational flexibility. For instance, relatively speaking, the A380 cockpit has the same layout as the A340 and A320. In comparison with the 747-400, one of the competitors best-selling aircraft, Airbus claims a reduction of the operational cost of 20% per seat for the Airbus A380: the recent conception of the aircraft has made it possible to integrate more composite materials and less wiring. On the ground, the A380 fits in an 80 by 80 meters square, in accordance with the layout of the 25 main airports. Besides, thanks to its central 20 wheels landing gear the weight by load-bearing wheel is the same as a 747. The introduction of this new aircraft only entails the reinforcement of certain ground installations (runway over a highway for instance) but most of the ground installations can remain as they are. However double-level gangways will have to be introduced to allow passengers to get in or out in less than fifteen minutes. This is how the supply chain can be schematically represented in an overall way:
Exhibit 13.10 Simplified example of supply chain in the aeronautics sector
To be translated
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Source: from Malaval, Ph. et Bnaroya, Ch., (2001), Marketing Aronautique et Spatial, Paris, Pearson Education. A. How can you summarize the main communication operations towards the different interlocutors of the customer airline? Take Singapore Airlines (SIA) as an example: its marketing mix is, among others, based on the fact that its fleet is one of the most modern in the world, either through the chosen aircraft or through the selected optional equipments on the different Airbus or Boeing. The diagram below shows the main members of the buying centre likely to influence SIAs final choice. Which arguments can Airbus put forward, particularly with the airlines Operations Director, Marketing Director and Maintenance Director?
Exhibit 13.11 The Buying Centre of the airline
To be translated
Source: from Malaval, Ph. and Bnaroya, Ch., Op. Cit. B. Do you advise using a CRM tool to facilitate information exchange between the different interlocutors of the Airbus teams? Why? C. Which communication actions do you recommend towards regulation bodies? Is lobbying suitable to the target? (cf. Chapter 8)? If so, how will you work out its structure in relation to local or international authorities? D. Is it necessary to develop a communication plan towards airport authorities? Which arguments should be put forward for Singapore airport as it was recently designed and built?
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References
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