Business-to-business selling

Marketing process for sales persons

Under the marketing concept, the firm must find a way to discover unfulfilled customer needs and bring to market products that satisfy those needs. The process of doing so can be modelled in a sequence of steps: the situation is analysed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is implemented and the results are monitored.

I. Situation analysis

A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the firm must understand its own capabilities and the environment in which it is operating.

The situation analysis thus can be viewed in terms an analysis of the external environment and an internal analysis of the firm itself. The external environment can be described in terms of macro-environmental factors that broadly affect many firms, and micro-environmental factors closely related to the specific situation of the firm.

The situation analysis should include past, present, and future aspects. It should include a history outlining how the situation evolved to its present state, and an analysis of trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists.

If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition.

There are several frameworks that can be used to add structure to the situation analysis:

•  PEST analysis – for macro-environmental political, economic, societal, and technological factors. A PEST analysis can be used as the “climate” portion of the 5 C framework.
• 5 C analysis – company, customers, competitors, collaborators, climate. Company represents the internal situation; the other four cover aspects of the external situation
• SWOT analysis – strengths, weaknesses, opportunities, and threats - for the internal and external situation. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them.

II. Marketing strategy

Once the best opportunity to satisfy unfulfilled customer needs is identified, a strategic plan for pursuing the opportunity can be developed. Market research will provide specific market information that will permit the firm to select the target market segment and optimally position the offering within that segment. The result is a value proposition to the target market. The marketing strategy then involves:

• Positioning the product within the target market
• Segmentation
• Targeting (target market selection)
• Value proposition to the target market

III. Marketing mix decisions

Detailed tactical decisions then are made for the controllable parameters of the marketing mix. The action items include:

• Distribution contracts
• Product development – specifying, designing, and producing the first units of the product.
• Pricing decisions
• Promotional campaign development

IV. Implementation and control

At this point in the process, the marketing plan has been developed and the product has been launched. Given that few environments are static, the results of the marketing effort should be monitored closely. As the market changes, the marketing mix can be adjusted to accommodate the changes.

Often, small changes in consumer wants can be addressed by changing the advertising message. As the changes become more significant, a product redesign or an entirely new product may be needed. The marketing process does not end with implementation - continual monitoring and adaptation is needed to fulfil customer needs consistently over the long-term.

B2B and B2C

The terms B2B and B2C are short forms for Business-to-Business (B2B) and Business-to-Consumer (B2C). Both describe the nature and selling process of goods and services. While B2B products and services are sold from one company to another, B2C products are sold from a company to the end user.

Differences between B2B and B2C

The main difference between B2B and B2C is who the buyer of a product or service is. The purchasing process is different in both cases and the following is a list of key differences between them.

Risks

Buying one can of soft drink involves little money, and thus little risk. If the decision for a particular brand was not right, there are very little implications. The worst that could happen is that the consumer does not like the taste and discards the drink immediately.

Buying B2B products is much riskier. Usually, the investment sums are much higher. Purchasing the wrong product or service, the wrong quantity, the wrong quality or agreeing to unfavourable payment terms may put an entire business at risk. Additionally, the purchasing office/manager may have to justify a purchasing decision. If the decision proves to be harmful to the organisation, disciplinary measures may be taken or the person may even face termination of employment.

In international trade, delivery risks, exchange rate risks and political risks exist and may affect the business relationship between buyer and seller.

Strong brands imply lower risk of using them

• There exists a performance risk as there might be something wrong with an unfamiliar brand.
• Buying unfamiliar brands implies financial risks. Products may not meet the requirements and may need to be replaced at high cost.
• When buying machinery or supplies for a company, peers may not approve the purchase of an unknown brand, thus posing a social risk

Buying behaviour in a B2B environment

Some characteristics of organisational buying/selling behaviour in detail:

• Since there are more people involved in the decision making process and technical details may have to be discussed in length, the decision-making process for B2B products is usually much longer than in B2C.
• For consumer brands the buyer is an individual. In B2B there are usually committees of people in an organisation and each of the members may have different attitudes towards any brand. In addition, each party involved may have different reasons for buying or not buying a particular brand.
• Companies seek long term relationships as any experiment with a different brand will have impacts on the entire business. Brand loyalty is therefore much higher than in consumer goods markets.
•  While consumer goods usually cost little in comparison to B2B goods, the selling process involves high costs. Not only is it required to meet the buyer numerous times, but the buyer may ask for prototypes, samples and mock ups. Such detailed assessment serves the purpose of eliminating the risk of buying the wrong product or service.

B2B brands need to be differentiated

One of the characteristics of a B2B product is that in many cases it is bought by a committee of buyers. It is important to understand what a brand means to these buyers. (Note: Temporal) Buyers are usually well-versed with costing levels and specifications. Also, due to constant monitoring of the market, these buyers would have excellent knowledge of the products too. In many cases the purchases are specification driven. As a result of this, it is vital that brands are clearly defined and target the appropriate segment.

As explained above, every one product can only be associated with one brand. Because of this, it is vital that companies find a white space for their brand, an uncontested category to occupy space in the minds of the buyer.

Differentiating one’s brand, companies can use various strategies, leveraging on the origin of the goods or the processes to manufacturing them. Some have identified up to 13 such strategies. Depending on the company’s history, the competitive landscape, occupied spaces and white spaces, there could be one or many strategies any one company could use.

Ultimately, a strong B2B brand will reduce the perceived risk for the buyer and help sell the brand.

Market segmentation and targeting

Market segmentation is an economics and marketing concept that involves sub-sets of a specific market which are made up of people and organisations that demand similar products or services based on qualities related to those products. Market segmentation and targeting is a technique that’s employed by many discerning businesses to more successfully tap into these potentially lucrative sub-sets.

There are market segmentation and targeting resources available across the country that can enable you to successfully gear your marketing efforts towards these sub-sets. There are different approaches companies can take in regard to targeting a segmented market. Some companies employ very broad approaches while others take a more specified approach. Market segmentation consultants can help you to determine the most plausible course of action.

Different people have different requirements. Different markets cater to those differing requirements and satisfy them in unique and different ways. Employing a marketing segmentation approach to your targeted marketing efforts enables you to divide broad markets into smaller ones that group customers together by using shared characteristics. The Internet can be a useful resource when looking for information and resources related to targeting a segmented market.

Target marketing

Streamline your sales effort by pitching to niches

Target marketing streamlines your strategies by determining a product or service’s ideal market and pitching that market in a way that’s more likely to appeal to those customers.

Targeting a specific type of customer allows your company to:

• Hone in on and eliminate sales tactics that aren’t working.
• Plan marketing initiatives more effectively.
• Allocate marketing dollars more efficiently.
• Learn more about your customers’ preferences and habits for use in future promotions.

(The writer is the Managing Director & CEO, McQuire Rens & Jones (Pvt) Ltd. He has held Regional Responsibilities of two Multinational Companies of which one, Smithkline Beecham International, was a Fortune 500 company before merging to become GSK. He carries out consultancy assignments and management training in Dubai, India, Maldives, Singapore, Malaysia, Indonesia and Bangladesh. Nalin has been consultant to assignments in the CEB, Airport & Aviation Services and setting up the PUCSL. He is a much sought-after business consultant and corporate management trainer in Sri Lanka. He has won special commendation from the UN Headquarters in New York for his record speed in re-profiling and re-structuring the UNDP. He has lead consultancy assignments for the World Bank and the ADB. Nalin is an executive coach to top teams of several multinational and blue chip companies. He is a Director on the Board of Entrust Securities Plc.)