B2B Marketing

Session 1 and 2

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 What is marketing?

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“ Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large.”

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 What is Business Marketing?

• The process of understanding, creating and delivering value to the targeted

business markets and customers.
• Business markets are – firms, institutions or governments that acquire goods and
services either for their own use , to incorporate into the products or services that
they produce
or

for resale along with other products to firms, institution or governments.

Consumer Market Transaction Vs Business Market Transaction

“ I will not ask for customer business unless I am reasonably sure of adding value to
her business”

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 www.youtube.com/watch?v=hbkZrOU1Zag

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 Invisible hand that drives Economy

• “ All pervasive, yet invisible” – Dr. Sharad Sarin

• Almost 50 to 60% of a country’s GDP is typically the size of business markets
• Indian Business Market in excess of around 1000 Billion USD
• HUL alone transacts approx 2 billion USD ( Raw material, equipment, packaging,
services)
• Behind every B2C brand, there are multiple B2B brands

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 Evolution of B2B Marketing

• Till late 60’s – Industrial Marketing

• Till late 70’s – Organizational Marketing/ Marketing to Organizations
• Late 80’s – the term ‘ Business Marketing’ came into existence
• Around mid 90’s with the growing influence of IT in business – terms like B2B and
B2C became part of business terminology.

B2B Marketing/Business Marketing/Business Market Management

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 B2B- Indian Story

Pre-1991 : “ License and Permit Raj”

• Production and Selling was the key Mantra

“ Physical availability of whatever we can produce is enough- the rest would be taken
care of by customers”
“ Selling alone is the entirety of the B2B marketing task”

Post 1991 : Customer orientation ( Individual and the Firm)

• Competition orientation
• Technology orientation
• Skill orientation
• Ethical orientation
• Strategic Marketing Orientation

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 B2B – More Fun?

• Buying Process
• Scale
• Data and Relationships
• Mutitouch and Omni channel

The biggest player in B2B online business?? Viresh Oberoi??

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 The ( not so ) Quiet Players : Online Space

• Mjunction ( 21 billion USD ); last 18 years it grew at CAGR -50%

• Total online B2B market will grow to 6.7 Trillion USD by 2020-Frost and Sullivan
• Indian market – 2000 billion USD
• Attracts new breed of entrepreneurs ( Sanjay Deokule 51 ex Godrej Infotech):
getmymachine.com ( machine tools, material handling equipment, earth moving
equipment and plastic machinery)
• Industrybuying.com ( aims to be Grainger of India) : Swati and Rahul Gupta (
Father’s industrial distribution business)
• Power2SME : Aggregates demand from a group of buyers and puts that across to
the sellers ( Founder R Narayan )

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 Nature and Scope of Business Marketing

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 The Domain of Business Marketing

Raw Material Material Distribution/After

Manufacturing Final Assembly
Extraction Processing Markets
• ONGC, OIL • Indian Oil, • L&T, Bharat Forge • Tata Motors • Croma
• Reliance, Coal Hindalco, Tata • Sona Steering • Maruti Suzuki • Tata Motors
India, TATA Steel Steel • Godrej Service Centres
• Reliance • Metro Cash and
Carry

It’s all B2B

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 What Organizations Buy?

• Major capital equipment ( Huge capital, Technology )

• Minor capital equipment ( Lower capital, standard equipment)
• Office Equipment
• Raw Materials ( Coal, Iron ore, Oil etc.)
• Components and Spare Parts ( processors, steering wheels - Cars : over 3000
components)
• Consumables ( Lubricants, ink, Newsprint)
• Services( Security, Logistics, Auditing, Process engineering, IT Services)

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 Business Marketing – Key Characteristics

• Market Structure
• Demand Characteristics
• Unique Dimensions

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 Market Structure

• Narrow Customer Base ( 250 million B2C Households Vs <1000, Personal Selling,
Relationships are important)
• Dominant and Single Customer Situation ( Auto Ancillaries )
• Horizontal and Vertical Markets ( Steel, Plastics, PVC, Glass , Rubber– Broad
Horizontal Markets, Vertical Markets –Computer processors, Newsprint, Flat
screens – Limited end users and limited end uses )
• Geographical Concentration of Buyers ( IT-Bangalore, Auto- Gurgaon, Chennai;
Pharma – Western India )

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 Demand Characteristics

• Derived Demand( Rubber – All types of tyres, tubes etc ; Steel Sheets – Car,
Appliances, AC etc.)
• Price inelasticity( RIL , IOC buying crude Oil ; Car companies buying steel, Real
estate companies buying Cement/building materials)
• Volatile( Wider swings –derived nature of demand)

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 Unique Dimensions

• Functional interdependence( Internal Orientation as well as customer orientation;

General Management responsibility)
• Buyer-seller interdependence ( Vendor Management )
• Product complexity ( High involvement )
• Buying Process Complexity ( Multiple Stakeholders )

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 But, what about price? Competitors?

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 Value in Business Markets

• Value is the sum total of all benefits – economic, technical, service and social , -
received by the customer ( net of cost ) in exchange for the price it pays for a
market offering
• Therefore, market offering has two elemental characteristics : Value and Price
• Fundamental Value Equation
• Customer Incentive to Purchase

NL 45 to Colorman ( Manroland, Germany )

Assessing Value in Practice – Two types of Money

Equitable return by demonstrating and documenting superior value

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 Institute for the study of business markets (ISBM)

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 Business Marketing- Processes &Guiding Principles

Understanding
Creating Value Delivering Value
Customer Value

• Market Sensing • Managing Market • Gaining Customers

• Understanding Firms Offerings • Sustaining reseller
as Customers • New Offering partnerships
• Crafting Market Realization • Sustaining customer
Strategy • Business Channel relationships
Management

Regard Value as the Cornerstone

Focus on Business Market processes
Business Across Borders
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 What changed; what has not changed

• Data driven business and Seamless experience

– Rearview mirror to CCTV

• B2B purchases entail personal risks ( losing time, credibility and job)
• Personal value trumps business value
– Professional benefits
– Social benefits
– Emotional benefits
– Self-image benefits

• Storytelling : Put people at the heart of marketing.

“ First win the heart. Then the head. And, the hands. That’s what we do as marketers”.
- Adam Park, ED Marketing, SAP

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 Group Project

A group of five students (max 6) will work on a term long project. This project work
will involve the following steps:

• Identify an important business market need which is being served by the existing
brands.
• Understand and articulate the customer value by collecting market intelligence
and performing market segmentation.
• Design your product and demonstrate/document customer value.
• Arrive at your pricing decision
• Build a communication strategy
• Define the role of channel partners
• Formulate customer acquisition and relationship strategy

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 Course Overview

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