Name: Boitumelo Khahloe

Std no: 18019554

Module: BTBM

Question 1

1.1. Types of B2B customers and buyers:

- Resellers
An individual or business that purchases products or services produced by another business with
the purpose of selling these products or services to another party for profit, instead of
consuming the product or services for themselves. They include retailers and wholesalers.
Retailers are businesses that sell goods to the public in relatively small quantities of use of
consumption rather than for resale. E.g. Pick' n Pay stores sells grocery items at a limited
number of items per customer. Edgars sells Revlon products and other branded clothes.
Wholesalers buy directly from manufacturers, then distribute and sell products on bulks
quantities to retailers or individual consumers.
Makro of how it is a wholesaler too. It also works with stokvel groups.

- Producers
They obtain goods such as raw materials, semi-finished and final products from other
businesses. They take up and transform them into consumable products to make a profit. In
industries such as agriculture, forestry, fisheries, mining and transport industry.
McDonald’s buy beef, chicken, potatoes, and other condiments to make their meals.

The main difference between resellers and producers is that resellers purchase goods and
services to sell them immediately without any form of modification. While producers need to
change the form on which they purchased goods or services in order to be in a consumable state
before selling them for a profit.

- Institutions are non-government organizations that buy goods and services to support their
internal services. The function is focused on bettering the community instead of gaining profit.
They included churches, schools, charity, activity clubs, and museums.
E.g. A church buying refreshment items and office and cleaning supplies from Pick n Pay.

- Government
The biggest buyers of goods and services to operate both their internal and external operations.
They do transform particular goods and services without the intention to make a profit but to
serve the needs of society. However, there are state-owned enterprises that are profit-driven
such as SAA or Eskom. The contract with other businesses that provide the citizens with all kinds
of services.
When the government contracts with a construction company to build houses or schools or fix
damages roads.
 The main difference between institutions and government is that the waiting period. Institutions
can easily identify a need for certain goods and services and purchase them as quickly as
possible. While the government takes time to formulate a budget as well as proceed funds for
certain goods and services to be purchased and delivered to the citizens.

Question 2

2.1. The criteria that is used by the organization ( Imperial logistics) when selecting suppliers.

- Product quality
Product products or services strength the productivity of the business due to limited operational
interruptions and better working conditions. And consistent quality must be provided by the
supplier. E.g. The supplier's quality of the work rendered to Imperial logistics should be of high
quality

- Purchasing costs
When suppliers can achieve higher productivity and thereby decreasing costs, they are in a
stance where they can consider lower prices than their competitors. This in turn will lower input
costs and could enable the purchasing organization to reduce prices, remain competitive and
possibly achieve an increase in the market share.
For instance, IT services charged to Imperial should be comparable to the service products, such
as SIVOXI or SovTech.

Technical aspects
What to consider;
Whether the supplier’s equipment and process will meet our requirements
Whether the supplier’s technological abilities to achieve future requirements
The supplier’s ability to develop new products or services
The design capability of the supplier.

- Financial aspects
Determine the financial health or conditions of a credible supplier to reduce risk. Because
suppliers who are in ominous financial crises will increase chances of interruption in the
performance. The business should be able to assess this valuable information about potential
suppliers either from the suppliers or the credit bureaus, who can for an example supply details
of the owner, financial ratios and debt judgements.

- Customer service
Suppliers should excel in all characteristics of customer service, including the quick resolutions
of any claims and grievances providing early warnings of any changes in delivery or distruptions
in the supply chain. Services would also includes supplier attitude to managing the customer’s
inventory or providing consignment stock facilities. The service provider used by Imperial should
be able to help employees at Imperial logistics without being rude or judgemental regarding IT
services.
 - Co-operation and partnership

A great relationship will benefit the both parties. Suppliers must understand the value of the
business to them, so they can be committed and make an effort to provide the best service
possible. Suppliers relationship management plays a major role in this stage.

- Management and organizations

Management controls practical work division, specialization and resource allocation. This plans a
clear flow of work and specifies boundaries of responsibilities, authority and the rights which do
not overlie. An organisation structure is essential as it clarifies to each employee in his position
and the area of influence in the business. An employee should know his or her basic rights,
duties, immediate superiors and subordinates.
An example a supplier would make use of employee contracts or company codes of conduct or
policies To define the management and the organisational structure to Imperial logistics.

- Environmental criteria
How environmental conscious is the operations of the supplier is?. Which also includes the
following ;
The adoption of environmental management systems at ISO 1400, reuse, recycling and
manufacturing.
Environmental friendly package for use of transmit.
Waste disposal and the cartage of hazardous materials and toxic waste.
The supplier should consider using high tech computers from hp which is a company that has
environmental initiatives or make use of positive solar energy.

- Legal criteria
BBBEE is a core requirement of the South African businesses environment in which businesses
operate. A good example is SASOL which strongly supports South African’s BBBE codes of
conducts. A supplier has to comply with human rights, working conditions and child labour.
Imperial logistics has been B-BBE compliance since 2007 and spends about 51% of black owned
businesses and other group designated suppliers.
Word count: 900

2.2. The four categories of purchase in relation to Imperial logistics

1. Strategic Products

These are high tech, high volume products often supplied at customer satisfaction. There are only one
source of supply which cannot be shifted in the short term without incurring costs. These products
involves a high share of the company’s end product. The importance of these products to the buyer
creates communication between buying organization and the supplier. A business is in a position to
negotiate with the supplier as there is a form of relationship being established.
In this case Imperial logistics makes uses of fleet of tracks that are used to transport products across the
industries which they operate.

2. Leverage Products
The quality of these products is standardized and they can be obtained from various suppliers at
standard quality level. They are brought in large volumes and have high value to the customer but
slight risk to the supply because they are various suppliers in the industry and costs are compared to
lower cots. The availability of various suppliers allows buyers to decide on which they want as a
supplier and why.
For instance, Imperial logistics makes use of cold storage containers and other types of storage units
in order to store products that needs to be distributed across the countries.

3. Bottleneck Products
Products can only be obtained form one supplier or their delivery is uncertain and have a relative
low value of money. A monoplic situation which leads to higher prices, long delivery times and even
bad service. Buyer seller power situation for Imperial logistics includes network providers such as
Vodacom or when the electricity which is needed mostly for internal operations.

4. Routine Products
Theses are non critical products which are low in value. And the purchasing process is often
decentralised. They are used for the internal operations of the business consisting of business goods
such as office furniture, cleaning suppliers and office consumables ( stationery) even the catered
food ( kiosk) or snacks ( vending machine).
Imperial logistics makes used of these routine products to accommodate their employees and also
motivate them.

Word count: 500

Question 3

3.1. The competitive strategy adopted by a company ( Imperial logistics)

- Differentiation
Business strives to be unique in its industry along with some dimensions that are widely valued
by customers. It selects one or more attributes that many customers in an industry perceived as
important. The aim of this strategy is to generate brand or customer loyalty.
Key differentiators at Imperial logistics includes;
- Focus on 5 key in industries- automotive, chemicals, health care, and industrial.
- Ability to build business in some of the most challenging markets in Africa
- Ability to develop leading positions as strategic market access and logistics partners to
multinational principles and clients
- Focus strategy.
According to Dr. Nitin Zaware, a focus strategy is an integrated set of actions that are intended
to develop or deliver goods and services that serve the need of a particular competitive
segment.
The focus is on a certain niche in the market, providing limited product range- with the goal of
being a monopoly.
“ Operate as ‘ One Imperial’, offering unique end- to -end solutions”.
- Low-cost strategy.
A business that takes up a low-cost strategy can quote lower prices than it’s competitors and
thus creates a sustainable competitive advantage. The reason of this strategy is to increase sales
volumes or reduce operations costs.
- Pre-emptive strategy.
The idea is to gain a sustainable advantage by considerably improving the solutions, systems and
structures ( Ken.D. Thomas, 2013).

- Synergy
The fact that Imperial logistics is distribution, warehouse, sourcing and transportation of medical
suppliers and other other esstinal goods and services in the market it runs. It integrated ways in
which work to supply more than one form of service.

3.2.
1. Core Competencies
Refers to a variety of the most important skills and knowledge a business employs to do
something innovative and successful. For instance, McDonald has standardization. It serves nine
pounds of French fries each day and each of them has exactly the same taste and texture. By
providing exceptional customer service to add value to customers-

2. Product Quality
According to Gaurav Akrani, 2013, product quality means to contain features that have meet
customer needs or wants and give customer satisfaction by improving products and making
them free from any deficiencies in or defects. Quality products help businesses to uphold
customer satisfaction and loyalty as well as reduce the cost of mending faulty goods. Major
companies know for their high quality of products and services includes Apple, Disney and
Procter & Gamble (P&G).
Businesses can add more value by enhancing their packaging and design in line with relevant
trends in the market as this creates additional perceived value in the eyes of the customers.

3. Product Policy
Includes a set of all decisions concerning the products and services offered by the business.
Product policy is concerned with defining the type, volume and trimming of a product that a
business delivers for sale. The product policy management itself makes product decisions on the
product policy. It covers product planning and development, product line, product mix, product
branding, product positioning and product packaging.
 Product policy has obvious objectives ( MBA skool, 2018);
- Survival- is the man purpose for any business that wishes to stay in a profitable market.
- Growth- as a long term goal, businesses look forward to growing themselves in the market.
- Flexibility- the flexibility of the policy needs to adapt to the changing needs of the customers,
government’s regulations, global trends and the economy.
- Scalability- the utilization of resources should be optimized- with time the business needs to
make use of economies of scale to increase profits.

3.3. The first 3 steps in the Product Positioning Process.

Step 1: Identify the competitors in the marketplace.

It is important for a business to know and be aware of who the rivals are, also what they are
offering( competitive advantage).
This will help in delivering products and services which are unique and are able to attract and
retain customers. Businesses can learn about their competitors, especially how relatively low
their prices may be and why?.
There are two types of competitors; Primary competitors- who refer to the same product class.
Secondary competitors- those belonging to the different product class.

Step 2: Identify the important Product Features and Benefits.

Product features in a case of B2B customers includes; customer satisfaction, exchange value,
tangibility and intangible attributes and associated attributes. Customer do not buy product
features but rather the product’s need to satisfying benefits.
Product benefits are things that a product gives to fulfill the needs or wants of a customer. They
can be either actual benefits or perceived benefits( Cleverism, 2020).

Step 3: Determing the perception of customer firms with regards to the regards of the
marketer’s product.
Customer perceptions is defined as a marketing theory that affects a customer’s impression,
awareness and or consciousness about a business or it’s products and services. This has an
influence in attracting new customers and retaining good relationships with current customers.
When making a purchase, a customer values a product’s benefit higher than it’s function.
Customer perceived value often has little to do with the certain price.
Customers can analyze a product along several levels. So customer perception plays a vital role
in understanding the customers to communications and advertising their buying decisions,
loyalty, the extent to which they refer a brand or even more, advocacy effort.
Percived products benefit involves three levels; Physical, logical and emotional. For example,
buying a new coat will keep you warm ( physical), driving a car needs to be filled with
petrol( logic) and wearing clothes to cover your nudeness will save you from embarrassment
( emotional).
Word count : 501

BIBILOGRAGHY
Mercy Makhita, Michael Cant, Daniel Theron, 2016, Business to Business Marketing, Cape Town,
Juta & Company (Pty) Ltd.

[Online ]
Available at:
https://www.slideshare.net/mobile/drnitinzaware/focus-strategy#:~:text=Focus%20Strategies
%3A%20A%20focus%20strategy,Dr.)

[Online ]
Available at:
https://www.imperiallogistics.com/our-stategy.php#:~:text=One%20Imperial,Africa%E2%80%9D
%20in%20the%20medium%20term.

[Online ]
Available at:
https://www.cleverism.com/lexicon/product-benefits/#:~:text=Product%20benefits%20are
%20the%20things,either%20be%20actual%20or%20perceived.&text=Perceived%20benefits
%20include%20the%20products%20popularity%2C%20its%20image%20or%20its%20reputation.

[Online ]
Available at:
https://hapticmedia.fr/blog/en/customer-perception/#:~:text=Yes%2C%20customer
%20perception%20is%20important,brand%20because%20it%20affects
%20everything.&text=Customer%20perception%20plays%20an%20important,even%20more
%2C%20their%20advocacy%20efforts.

MBA skool team, 2018, Maketing and strategy, 22 January 2018.

[Online]
Available at:
https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/13678-product-
policy.html