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B2B marketing summary
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Summary of 62 pages for the course B2B Marketing at RuG
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B2B marketing summaryLecture 1...................................................................................................................................................................1
Tutorial 1..................................................................................................................................................................5
Lecture 2...................................................................................................................................................................5
Video of BLM Benelux:........................................................................................................................................7
Lecture 3...................................................................................................................................................................7
Guest speaker: Pieter Kopmels............................................................................................................................8
Lecture 4...................................................................................................................................................................9
Guest Speaker: J.B. Steenkamp on B2B brands.................................................................................................10
Video: Casten Vlierboom – ESG at Scheer........................................................................................................11
Tutorial 4................................................................................................................................................................13
Lecture 5.................................................................................................................................................................13
Chapter 1: B2B markets and customer relationships........................................................................................17
Chapter 2: B2B CVM............................................................................................................................................22
Chapter 3: Value of the customer (VOC)............................................................................................................25
Chapter 4: Value for the Customer (VFC)..........................................................................................................30
Chapter 5: Customer Value Segmentation..........................................................................................................34
Chapter 6: Designing Superior Customer Value Propositions..........................................................................38
Chapter 7: Brand Equity......................................................................................................................................42
Chapter 8: From Products to Total Solutions.....................................................................................................44
Chapter 9: Differentiating in Customer Service and Customer Relationship Management.........................48
Chapter 10: Value Enhancement through Sustainability..................................................................................51
Chapter 11: Total Cost of Ownership and Customer Value-Based Pricing.....................................................52
Seven steps using CVM in field studies..............................................................................................................55
Constructing Customer Value Models (working paper)....................................................................................56
Chapter 12: Improving Trustworthiness Through Risk Reduction.................................................................58
Chapter 13: Branding and Communicating Value.............................................................................................59
Lecture 1
Chapters 1 &2
Business-to-Business
- Customer typology
, - Dynamics in B2B
- B2B relationships
- Key characteristics of B2B markets
Customer typology
B2B never deliver to consumers. B2B markets have in common that they deliver their products (goods
and services) directly to other private companies, governmental agencies, or public organizations. It’s
a full scale from tangible to non-tangible what they offer.
About 50% of our economy is B2B. At the business school more than half of the managers are
working in a B2B company. So the chances are high that you will as well. If you look at the academic
B2B marketing papers, it is nothing compared to the B2C markets. It is much more difficult to do
research on B2B.
Value chain: combination of companies that produce, distribute, and eventually deliver products to the
end user.
Resell as is: It means I am buying something because I can sell this again to my customers.
Integrate as components (OEM)
Modify and resell: 3 different derived demands (= organizational demand is determined from
customers In downstream markets (multiple stages). People think this is what the businesses are all
about but there is more:
There is however also installed based. Here companies buy something for their own company.
This visual is very important to understand different cases. B2B is so differentiated.
Dynamics in B2B
Three views of competition (Hunt et al., 2006): Traditional view of competition, hierarchical
competition & Strategic network competition.
B2B-companies operate in networks.
B2B relationships
The relationship is similar for a lot of customers in B2C. In B2B there are a lot of differences between
the customers. Model: determinants & consequences of the nature of buyer-seller relationships. How
easy is it to go to other suppliers?
The determinants are the factors influencing how a customer looks at the certain supplier. It influences
the kind of relationship they will have. How does the supplier adapt to the relationship and how does
the customer adapt to the relationship? There are no two the same customer-supplier relationships in
the B2B. It is all much more complicated.
Types of business relationships (Day, 2000)
- Transactional exchanges: Anonymous transactions/automated purchasing
- Value-adding exchanges: in the middle
- Collaborative exchanges: ‘I’m not looking for a transaction, I’m looking for a company for 5
years.’
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,10 characteristics of B2B relationships
1. The pareto principle
a. For many B2B suppliers, 20% of their customers are 80% of the revenues.
2. Power in the value chain
a. Challenge: maintaining bargaining power in business relationships
3. Growing interdependencies
a. Customers are getting more dependent from their suppliers
4. Intensive relationships
a. Multiple buying influences: involvement of various members of an organization in the
purchase decision. (decider, buyer, user, gatekeeper, influencer)
5. Multiple source suppliers
a. They have multiple (2-3) suppliers for the same good. It’s an instrument customers
use to reduce their dependence on suppliers.
6. Industry 4.0
a. Industry 4.0 can be seen as the ‘fourth industrial revolution’. This comprises the
digitalization of the industrial sector.
7. Ambidexterity
a. To be competitive and offer the best value, companies must manage both the benefits
and sacrifices for their customers. This means not only adding value, but also
managing costs and prices for customers. Internal cost reductions could be necessary
to have the possibility to ask (low) prices at a competitive level. Simultaneously
working on high added value for customers and at the same time working on low
internal costs is a practice of walking on two-legs called ‘ambidexterity’.
8. From acquisition to retention
a. In many markets the number of customers has been consolidated. There is no massive
growth anymore. Where marketing and sales of many suppliers used to be focused on
acquiring new customers, the focus has now shifted to retaining existing customers. It
is also more profitable to focus on existing customers. Loosing dissatisfied customers
and trying to regain them after a while can be a costly business.
9. From volume and market share to profitability
a. In those B2B markets, where the fixed costs are low, it is not important to have as
much revenues as possible. Rather, it is more important to generate revenues and
retain customers that contribute to the company’s profitability. Having the right
customers is more important than having a lot of customers.
10. Commoditization in markets
Many business markets are very dynamic. Four factors have disrupted the dynamics in these markets:
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, 1. The quality of products has been commoditized. The technical and qualitative differences
between suppliers and their offerings have been narrowed.
2. An existential threat has been posed by new disruptive technologies like cloud computing,
mobile applications, and artificial intelligence.
3. Business customers are getting better informed by doing research on their own. Easy access to
online information leads to an abundance of product information.
4. Customers shift from a focus on almost solely negotiating for the lowest price to selecting
suppliers based on added business value.
The product-based approach
Ø Traditional way of marketing
Ø Goods-dominant logic: products in the lead Ø Inside-out approach
Ø Reactive way of marketing
Ø Does not work anymore in many B2B-markets
Value-based approach
Ø New way of marketing
Ø Based on value for customer and supplier
Ø Outside-in approach
Ø Proactive way of marketing
Ø Important in many B2B-markets – avoid the commodity trap
Co-creation-based approach
Ø Value-based approach with intensive co-creation of customers Ø Based on service dominant logic
Ø Outside-in approach
Ø Proactive way of marketing
Ø The future in many B2B-markets
Outside-in approach and you listen to your customers.
Customer value marketing
Approach: designing, organizing, branding, and delivering a superior value to the targeted customer
segments the company wants to serve. The customer value propositions are in line with their value for
the company and the value desired by these customers.
Result: this to make sure that these customers experience a superior value, are satisfied/delighted,
have a trust-based relationship, and are committed and loyal towards the supplier. This eventually to
be financially successful on the long run as a supplier and contribute to the shareholder value.
Customer acquisition, retention & growth. There are 5 phases, but we will only deal with the first 3
this course. So only the chapters 1-13 you will have to study.
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