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1
Framework to support the process........................................................................................................3
Business to business marketing strategy process.................................................................................4
Understand the business strategy......................................................................................................4
Environmental analysis....................................................................................................................5
Market analysis ................................................................................................................................5
Understand the customer. Determine business needs.......................................................................5
Understand the purchasing process..................................................................................................6
Understand the competition. Competitive analysis..........................................................................8
What to create in the analysis.......................................................................................................8
Designing the competitive intelligence system............................................................................9
Understand your company: self analysis .......................................................................................10
Understand the product. What do we sell?.....................................................................................10
Define the metrics to measure results.............................................................................................10
Identify markets and market opportunities.....................................................................................10
Segmentation and targeting............................................................................................................11
Formulate the positioning statement(s)..........................................................................................13
Select the competitive marketing strategy......................................................................................13
Product strategy..............................................................................................................................13
Price determination.........................................................................................................................15
Decide a channel/partnership strategy............................................................................................15
Identify the most suitable marketing communication mix.............................................................15
Structure the integrated marketing communication strategy..........................................................15
Prepare the marketing plan.............................................................................................................16
Marketing operations......................................................................................................................17
Measure the results.........................................................................................................................17
B2B Marketing
One way to understand quickly the idea of B2B marketing is to highlight the differences between business marketing
and consumer marketing. Consumer marketing belongs to everyday life, in the sense that everybody is exposed to it,
and so its concepts may be more intuitive. A comparison with B2B marketing may help udbnerstanding quicker what
B2B marketing is about.
Segmentation Positioning
Strategic customer
CRM strategy
relationship strategy
Operations
Revenue Profit
Measure
Business to business marketing strategy process
There are 4 main phases, which are not necessarily sequential.
- analysis and information gathering
- strategy development and marketing plan preparation
- put the strategy in action / operations
- measure the results
One fundamental insight for the development of a marketing strategy is to understand the business strategy of the
company or the strategic business unit (SBU).
Which are the goals in terms of revenue, profit margins, market share?
Cost leadership
Differentiation
Focus strategy
Operational excellence
Product leadership
Customer intimacy
Decide mark strat goals: market expansion, share expansion – try to defend or increase market share unless you are a
small business – defend market share
Environmental analysis
PESTEL analysis
Market analysis
Size, project growth, profitability, entry barriers, cost structure, distribution systems, trends, key success factors.
Customers may be organisations but eventually it always the people within the organisation who make decisions and
buy.
Customers may be distributors, retailers, consumers. Any party the company sells to in the value chain is a customer.
Types of business customers are usually OEMs, Users, Government, Institutions and Industry distributors.
Within an organisation it is possible to find different types of customer, who differs for business needs and personal
aspirations. This leads to a the segmentation granularity that is often quite high in B2B markets (micro segments vs
macro segments)
The other imperative is finding business needs/personal needs for each target segment.
Methods:
- data mining of existing customers (why they purchased)
- focus groups
- surveys
- customer feedback via web and sales force
- customer visits
- joint product management
- joint development and testing
- product deployment or installation
- professional services
- partners
- customer support.
Customers may perceive 3 types of benefits:
Functional benefits
- technical specifications
- quality
Process benefits
- cost of transport
- reliability of supply
- installation and deployment
- services and support
- MIS, materials management
Relationship benefits
- trust
- flexibility
- customization
- risk reduction
In B2B marketing it is crucial to understand well the purchasing process, the organisational buyer behaviour and the
composition of the buying centre for each target segment. In other words, marketers must be aware of the DMP
(decision making process) and DMU (decision making unit). This is essential to target the marketing efforts properly.
Different behaviours lead to different strategies to be adopted in terms of positioning, message and media to reach the
targets.
DMP. The purchasing process buy-grid gives a general idea of the steps which an organisational buyer go through:
• Need recognition
• Product definition and specification
• Development of procurement strategy
o make or buy?
o formation of buying center!
o specify potential vendors
o design sourcing system
• Search/qualification of potential sources
o Simultaneous vs. sequential evaluation
o RFPs: open/closed bids, existing vendors
• Selection of suppliers - final negotiations
• Design of an order routine (contract)
• Order
• Performance feedback and evaluation.
The process should be taken as standard because it varies a lot depending on the situation (new buy, straight rebuy,
modified rebuy) and organisation (different organisations have different DMPs).
DMU. The buying centre includes members of the organisation who play any of the seven roles in the DMP:
• Initiators
• Users
• Influencers
• Deciders, that is people who decide on product requirements
• Approvers, that is people who authorize the purchase
• Buyers, people who have the formal authority to select
• Gatekeepers, coaches and enemies.
At the level of organisational buyer behaviour, there are many factors that are playing an important role during a
purchase decision. Those factors can be broken down in 4 main categories: individual, organisational, market and
environmental.
Market factors, competition and customer availability (Porter 5 forces). Decision change depending on availability of
suppliers, availability and importance of the supply.
Organisational factors:
Roles in the buying centres.
Company policies and purchasing guidelines: minimize cost, guarantee availability, assure the correct level of quality,
minimize TCO, minimize risk.
Vertical and horizontal dimensions: vertical means the degree of people involved in the buying process from top to
bottom in the same division, department or area. Horizontal means the degree of people involve in the buying process
coming from different departments or functions.
Time dimensions, the more people are involved in the buying centre fro short period of time, the more fragmented is
the buying centre over time. This time fragmentation is an important variable to be understood by the marketer. If a
decision involves a number of people who move in and out over time, their influence is limited to only few stages. If a
marketing manager participates only marginally to the buying process, advertising in marketing magazines may be not
completely clever.
Attitude toward risk. Risk perception can be lowered by information, trials and demonstrations. Risk is also lowered by
loyalty. Loyalty leads to trust.
Individual factors:
Experience, new buy VS straight rebuy
Choice of reward (salary, promotion, personal satisfaction…)
Valence of reward, the value attached to a reward. Rewards are not similar
Probability perception: how probable to the buyer is that engaging in the buying process this will lead to the expected
reward
Reward-measurement: buyers are motivated by both intrinsic rewards (reward people give to themselves like
satisfaction) and extrinsic rewards (given by the organisation like salary and promotion)
Motivation (put effort on the purchase) = valence (degree of importance of the reward) x probability (perception that
effort put in the purchase will lead to accomplishment of performance outcomes that will in turn lead to the desired
rewards)
For marketing this means understanding the valence and act on the perceived probability, increasing buyer experience
or knowledge.
The marketer may use a similar framework to combine buyers into groups and recognize buying patterns, patterns that
enable marketing managers to create marketing strategies.
This is concerned with determining who participate to the decisions and work to satisfy the needs of the participants.
For instance, if in the buying process of an industrial product, the decision may involve technical engineers and upper
management. The former are concerned with performance specifications while the latter are worried about costs. A
vendor would create marketing communication campaigns aimed at the engineers separate from those campaign aimed
to upper management.
However, marketers may want also to influence who might participate to the buying process. For instance,
demonstrating to upper management that the product sold at a premium price it improves performance so much to
result, ultimately, in more revenue and less cost for the company.
In the case of buying centres or when, in general, as often happens, the purchasing process involves more people with a
different cross-functional degree, the marketer needs to understand who are (which roles in the industry/market) the
decision makers, influencers, gatekeepers, controllers and purchasing agents. This will help deciding which message to
advertise/promote and where to advertise/promote.
The targeting decision is also very much influenced by the horizontal and vertical dimensions mentioned in the above
framework. The more the horizontal dimension is important the more the marketer needs to target different groups
within an organisation and this may lead to a greater marketing effort (people in different functional roles read, watch,
consult different media or sources of information).
NOTE:
New buys = all steps are taken, emphasis on product definition and development of product specifications
Modified re-buy = less emphasis on product definition and more emphasis on seach and evaluation of suppliers
Straight rebuy = need recognition and purchase are the only 2 steps undertaken
Understand competitor’s:
Strategies
Objectives
Financial situation
Products
Strengths and weaknesses
How to compete
Disseminating information
Disseminate information where it is needed.
Two approaches
• Compositional (uses product attributes)
– obtain “important” product attributes (focus groups)
– obtain ratings on attributes (survey)
– obtain “relevant” attributes (factor analysis)
• Decompositional (uses holistic evaluations)
– obtain perceived distance measures between products
– compose map (multidimensional scaling)
Benchmarking
- profitability
- sales volume
- market share
- customers and customer satisfaction
- product quality
- product roadmap
- relative cost
- product portfolio, for each product (product line) understand where we are in the product lifecycle.
Existing customers
Existing customers opportunities may come from cross sell (new products) and upsell (existing products).
Marketing to existing customers may require knowledge of the accounts, so that the best customers can be treated
differently in marketing activities from less profitable customers (who gets invited to the trade show? Who gets the best
present at Christmas time?)
New customers
Find new opportunities in existing markets (this involves understanding the markets which have been more receptive of
the products a company sells). Building account profiles may help in this way.
Find new markets. This involves geographical expansion or entering new industries/verticals with modified/new
products.
Market segmentation involves dividing a total market up into a series of sub-markets or market segments based on
customer characteristics. Target may be grouping companies, departments within companies, areas within departments
or roles. Remember that targets are always people!
Buying organization
• general company structure
• type of organization
• S.I.C., geography, size (“demographics”)
• technology used
• product application - end use - customers
• type of buying situation
• relationship to supplier (“in” or “out”, size
of order, existing contract, etc.)
Buying center
• Buying center structure
• Buying center composition
• Buying situation
• Stage of the decision process
• Types of procurement strategies (biddingvs. negotiation with “in” vendors: sequential vs. simultaneous evaluation)
Consider the broad customer group at which the company wants to sell its products and services. The choice may be
based on:
Overall, we need to ask ourselves if we can satisfy the needs of existing and potential customers in a clearly defined
market. Definition of the target market and its requirements is the first essential step in the segmentation process.
The segmentation has to be carried out with the following criteria that helps deciding if a market segment is viable:
- a segment has to have identifiable members (enumerated and evaluated). It must be measurable in size and
characteristics.
- a segment has to be accessible with some form a direct marketing activity and within the budget
- a segment has to be substantial (or meaningful), so promising sufficient business to merit separate marketing
attention. This needs estimation of segment sizing.
- a segment must be durable over time
Choice of which segment to focus attention and marketing budget is critical. Criteria for choice should be existing and
potential value and profitability. Consider expected acquisition costs, profit per customers, retention rates and customer
acquisition targets. Consider also estimate of revenue and customer lifetime value (CLV).
It is subsequently important to understand the granularity of the segments, that is the level of segmentation (macro,
micro or one-to-one)
Understand who the target decision makers are (professional figures) and the roles within a buying centre (influencers,
gatekeepers).
Identify targets that need special attention, like government.
Define a positioning statement, a clear description of who your customer is and how you want him to see your
product. This is a statement of what you do and how you do it differently and better and more efficiently than your
competitors.
How to compete?
Market leader
Market challenger
Market follower
Market nicher
Product strategy
Strategy for differentiation and positioning.
Along the way, market research tools are used to guide the process:
- Focus groups, qualitative methods
- Conjoint analysis
- Perceptual maps
- Surveys and Intention analysis.
Beyond idiosyncratic factors, the demand of each product/category/brand follows a systematic (“bellshaped”) pattern
over time.
Introduction (no competition, uncertainty)
– invest/ manage cash flow
– find/educate customers
• Growth (entry, “tornado”)
– compete for resources
– build market share, brand, loyalty..
• Maturity (shake-out)
– tough competition for customers
– leverage distribution /differentiation/scale
• Decline (few large players, low margins)
– milk product/brand
– improve efficiency
The diffusion of products, brands and innovations in general is mainly driven by a social process similar to the spread
of an epidemic.
Key elements:
- “innovators”
- “imitators”
- “word of mouth” communication
Industrial innovators
• Larger firms
• Financially powerful
• Faster growing
• With high R&D spending
• With a younger CEO
Understand sources of information available to the buyers in the industry and most importantly which sources of
information the target is using.
Personal Impersonal
Commercial Personal selling Websites
(controlled by the Trade shows Blogs
marketer) Telemarketing On-line forums
E-mail Sales literature
Conferences Advertising and advertorials
Company events RSS feeds
Webinars Sponsoring events
Virtual trade shows Online video b2b campaigns
Interviews Outdoor marketing. Airports,
Entertainment stations…
News releases and other PR
activities
Thought leadership material
Goals can be set bearing in mind the hierarchy of effects (AIDA model)
1 awareness: buyers become aware through articles in trade publications that Intel is introducing a new Pentium
processor
2 interest: buyer become interest in seeing Pentium 3 when they receive an invitation to visit the Intel booth at the
consumer electronic show
3 desire: buyers desire the Pentium 3 processor when the visit the Intel booth, see the video, receive list of
software/computer making booth to visit to see the processor in action
4 action: buyers who indicated that a decision is approaching receive a letter shortly after the show with a special offer.
Action is taken when the salesperson calls to visit the buyer.
Note: branding is building a mental association with a brand, like positioning for a product.
Depending on the goals set for the marcomm strategy, the use of the marketing mix changes. For instance if the goal is
to build more brand awareness, advertising may be the best choice. However, if the goal is to generate leads, maybe a
direct mailing campaign may help.
Create Messages
There is usually a primary message that conveys more strongly to your customers what you do and the benefit it offers
to them, supported by a number of secondary messages, each of which may have a number of supporting arguments,
facts and figures.
What buyers already think and do. Knowing how buyers purchase and what they already think is important to design an
effective communication strategy. For instance, if the purchase of plastic is not so important for a company, the buyer
won’t shop around too much. So the communication strategy may emphasize that it is easy to purchase from the
marketer’s company.
What information they need. The information needs are related to the buyer business needs. If the business need is an
issue to be solved, they would be attracted by information that details a solution. However information needs may
change depending on the media buyer is using. For instance research shows that when buyers attend trade shows they
have 3 sets of information needs:
• they need to find vendor for a particular product
• they need to explore different possible solutions for a problem they are facing
• the need to stay abreast of the latest technology in their filed.
What are the competitor’s actions. At the same time a marketer is trying to create a position in the mind of the
customer, so competition does the same. Marketer should consider what competition is doing and how likely they are
going to respond.
Briefing an agency, A standard briefing document is usually a good idea for briefing an agency. As well as focusing the
agency on what's important to you and your campaign, it serves as a checklist of all the important things to consider as
part of your brief. Typical elements to an agency brief are: Your objectives, target market, target audience, product,
campaign description, your product positioning, graphical considerations, corporate guidelines, and any other
supporting material and distribution.