B2B Marketing
Chapter 1: Markets and Marketing
o Some examples of well-known B2B-brands:
• Barco: world leader in visualisation, projectors in cinema
• Puratos: produce bakery products
• IBM: computer products, services
• De ster: flight equipment (food, cups, …)
• Hansen: industrial gearboxes
• Arjo: healthcare instruments (beds, nurses in elderly homes)
• Graco: painting industry
Würth: for professionals only (another example)
o Do not sell to consumers
o Fasteners, screws, small tools, hand tools
• = MRO: Maintenance, Repair and Operating supplies
o German parent company Adolf Würth GmbH & Co, Würth includes more than 400 companies
in 86 countries with 78.000 employees
o Turnover 2019: 14 billion euro, operating result before taxes
o Strong in logistics
o In Stuttgart are shops where they sell products to customers?
• Würth family store -> exception, some products for consumer, not normal !!
Business marketing
o Business marketing is concerned with the marketing of goods and services to organizations
• Same products as the consumer market
o The key distinguishing feature of business marketing is the nature of the customer, rather
than the nature of the product
o Although there are products that are bought only by organizations and not by final
consumers, there are many products that are bought by both organizations and consumers
• Gearboxes only interesting for organizations
Example Roche Diagnostics (develop machines for the lab): the power of knowing
o Why choose a career in B2B marketing?
• International field
• Complex solutions: highly engineered product
• Digital (communication, packages, connected products)
• Innovation
• Emotion: relation B2B companies, emotional products (healthcare)
• Change in the markets
o B2B Marketing = innovate or die (example clickshare barco)
• The marketing of goods and services to commercial enterprises, governments and
other non-profit institutions for use in goods and services that they in turn, produce
or for resale to other industrial customers’ (most important to who)
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, Start with raw materials suppliers (explain and expand)
OEM = Original Equipment Manufacturer
→ Quality of what they buy is defining most of the cases
o Key difference B2B vs B2C: is the type of customer, not the type of product, although many
products in B2B will never be bought by a consumer/household
• Examples: ERP system, gearbox, wind turbine, …
o In essence B2B marketing is about creating value for the customer
• Value is the key of B2B marketing
• Identify value: understand the value of the product for the costumer
- What are costumers struggling with? How can you solve it?
• Develop value: innovation important
• Communicate value (possibly negotiation)
• Deliver value: come up with your promises
o Strategic Value in a competitive environment: what your product will do for your customer
as compared with the current situation?
• INTRA: increasing the efficiency of your customers’ operation: lowering input costs
and lowering operating costs -> be cheaper than competitors with same product
• EXTRA: develop the customers’ business: increasing your customers’ business
through more volume or higher prices
o 4 strategies to create value for your customer: (figures slides)
• Cost leadership: reduce input costs (price)
- Sustaining the lowest price and the lowest unit cost by economies of scale,
by experience/learning curve, by bargaining power of suppliers
• Benefit leadership: reduce customers' (operating) total cost, be better + higher price
- Cost chain leadership (win-win relations): work on the total cost of your
manufacturer in production, in packaging, in logistics, in administration,…
• Benefit leadership: increase your customers' volume
- Eats into the margin of the customer, customers can sell more at higher price
• Benefit leadership: increase your customers' price
- Work on the price that the customer of the customer is willing to pay
o Product classification – OE(M) a seller orientation classification system (seller perspective)
• Based on the incorporation into the final product (entering goods)
OEM buys components
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, o Consequences of the value chain: what is the difference between the ripple effect and the
bullwhip effect once more?
• Supply chain concepts: ripple effect
- Downstream effect -> effect in final market
- Ripple or domino-effect in the supply chain
▪ Fire, natural disaster, man-made disasters, political crises, financial
crises, strikes,…
- “The ripple effect occurs when a disruption, rather than remaining localized
or being contained to one part or the supply chain, cascades downstream
and impacts the performance of the supply chain.”
• Case Port of Antwerp
- A value chain or chemical cluster, a lot of plants in the port (slide 16)
o B2B marketing characteristics
• Derived demand: businesses only buy to facilitate the production of goods/services
- Lag effect, accelerator effect
• Value networks:
- Complementors, competitors, distribution partners, influencers, opinion
leaders, academic institutions,...
• Multi-step buying process:
- Fewer, larger transactions with known customers
• ‘In B2B marketing, the metaphor of a river is often used to describe the chain of
‘derived demand’, where downstream activities are those that take place close to
the consumer, and upstream activities that take place far away from the consumer
The accelerator effect
o B2B marketeer should be aware of the accelerator effect
o = Changes in downstream demand can have a much larger effect in percentage in demand
for capital equipment (small effect on producer but large effect on consumer)
o Explains the demand for capital equipment
o Works best when we assume that current capital equipment is working at full capacity
o The accelerator effect is important in forecasting
o In supply chain we refer to the ripple effect and bullwhip effect:
• The ripple effect refers to structural dynamics and describes a downstream
propagation of the downscaling in demand fulfilment in the supply chain (SC) as a
result of a severe disruption
• The bullwhip effect refers to operational dynamics and amplifies in the upstream
direction as ordering oscillations
Ripple Effect:
• Back-up sourcing (near shoring)
• Flexible capacity, back-up facilities and
channels
• (Global) Emergency response systems
• Process recovery
• Outsourcing
Bullwhip Effect:
• Information coordination (Zara)
• Diversification
• Value chain integration (Zara)
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, Zara: watch trends, quick decisions, inventory control and distribution
o Bull-whip effect @ Zara: close the communication loop
o Constant flow of updated data through the supply chain:
• Change in trend
• Change in demand
o Stock Management
• Little amount of stock available in stores
• Stock rotation over stores
o Production:
• Vertical integration
• Near shore manufacturing
o On the radar of the B2B Marketer The “Decision Making Unit” (DMU)
• An influencer map contains roles connected by relationships
• Typical roles are:
- Approver
- Buyer
- Gate-keeper
- Influencer
- Sponsor
- User
• Other example: family (father, mother, sisters buying a car, all opinion)
o Value is different for each member of the decision-making processes: The market map
Yellow box: different functions of the
people
Manufacturer want to sell but 4 different
groups he need to convince
Market structure differences:
Dimension Business marketing Consumer marketing
Nature of demand Derived Direct
Demand volatility Greater volatility Less volatility
Demand elasticity Less elastic More elastic
Reverse elasticity (PD) More common Less common
Nature of customers Greater heterogeneity Greater homogeneity
Market fragmentation Greater fragmentation Less fragmentation
Market complexity More complex Less complex
Market size Larger overall value Smaller overall value
Number of buyers per seller Few Many
Number of buyers per segment Few Many
Relative size of buyer/seller Often similar Seller much larger
Geographic concentration Often clustered Usually dispersed
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