B2B MARKETING
SUMMARY BOOK THOMASSEN,
J-P.R. (2020), CUSTOMER VALUE MARKETING
Lisa de Vries | MSc Marketing Management | 2021/2022
,Table of Contents
Chapter 1. B2B Markets and relationships...........................................................2
Chapter 2. Customer value marketing (cvm)........................................................9
Chapter 3. Value of the customer (voc)..............................................................12
Chapter 4. Value for the customer (vfc).............................................................21
Chapter 5. combining value of and for the customer.........................................24
Chapter 6. Offering superior value propositions................................................29
Chapter 7. From products to total solutions.......................................................34
Chapter 8. Differentiating in customer service and customer relationship
management....................................................................................................... 38
Chapter 9. Total cost and customer value-based pricing...................................39
Chapter 10. Improving trustworthiness through risk reduction........................43
Chapter 11. Managing customer value: enablers for organizing value
propositions........................................................................................................ 45
Chapter 12. Return on value: the business case of cvm.....................................47
Chapter 13. Customer perceived value, satisfaction, delight, and trust............50
Chapter 14. Commitment and loyalty: the ultimate voc antecedents.................53
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,CHAPTER 1. B2B MARKETS AND RELATIONSHIPS
B2B companies deliver their products directly to other companies, governmental
agencies, or public organizations (and not to end-consumers).
B2B-organizations operate in 3 different sectors:
1) The primary sector – involves extracting, mining, and harvesting natural
products from our earth. (E.g. mining corporations, fishermen, and farmers)
2) The secondary sector – involves processing, manufacturing, and constructing
products using the goods or materials that the primary sector delivers (e.g.
manufacturing companies).
3) The tertiary sector – the services sector (e.g. accountancies and advertising
agencies).
Five groups of products B2B-customers buy:
1) Resell as is – products that are bought for trade (unmodified) by wholesalers
and retailers.
2) Integrate as component – Become part of the final product but need no
further processing before that stage.
3) Modify and resell – Previously undergone some processing but need further
processing by the B2B-customer before entering the final product.
4) Capital items – Help the company operate and conduct its main activities (e.g.
computers).
- Major Capital items: lifespan of more than one year, cost more than
$10,000 per unit
- Minor Capital items: lifespan of more than one year, cost between $1,000-
$10,000 per unit
5) Internal consumption – do not become part of the final product and are no
capital items. Are rather used for operating the company, maintenance, or repairs
(e.g. buying wine and beer for the Friday meetings or toilet paper).
B2B-companies in the secondary sectors can be differentiated in two generic
business logics:
Input-to-process (I2P): companies like metal, pulp, and paper suppliers
providing goods that are utilized as inputs in the B2B-customers’ process (modify
and resell; #1, 2, 3 from list)
Installed-base (IB): companies, such as machinery and equipment industries,
provide investment goods to B2B-customers, thus helping to create an installed
base of machines and equipment at the customers’ plants. 2 types:
- The capex business – capital items, as when customers invest in new
plants, heavy
machinery, or information technology systems (#4 from list).
- The opex business – operational expenditure for internal consumption (e.g.
services,
maintenance and repair related to the capex investments done. #5 from list)
Lilien’s rule (2016) to distinguish between B2B and B2C markets is to ask a
simple question: is the demand for a good or service derived (driven by the
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, demand of some subsequent B2B-customers) or primary (driven by the specific
tastes or preferences of the B2C buyer)?
Note: this rule only applies for the first three reasons to buy. So, in addition to
derived demand also internal use and consumption should be added (#4 and #5).
B2B markets and companies operate in value chains (= supply chains). Value
chain = combination of companies that produce, distribute, and eventually
deliver products to the end user. Note: one company can use several value chains
at the same time. For example, companies can deliver products to original
equipment manufacturers (OEM) and at the same time deliver to wholesalers.
These value chains lead to 2 important consequences:
1) A B2B-company can have several completely different customer segments that
sometimes have different or even opposite interests (e.g. because they are
competitors).
2) Strategic network competition is an important practice in which companies
build strategic alliances with other companies based on a contractual or even an
equity base. The aim is to develop the best set of capabilities and resources to be
competitive in the market.
3 views of strategic network competition leading to completely different value
chains :
1) Traditional view of competition; suppliers in the same business compete
with each other
to get and retain the best customers (horizontal and firm-to-firm)
2) Hierarchical competition; vertical integration by buying companies and
integrating them
into the company leads to competition between integrated companies
(‘hierarchies’).
3) Strategic network competition; combining the advantages of the other two
views leads to
this 3rd one. Various companies are not owned but work together as
network partners.
Network = a group of independently owned and managed firms that agree to be
partners rather than adversaries (= tegenpartijen).
3 types of B2B-relationships:
- B2B: business customer is the end-user (the case with buying capital
items/products for internal consumption)
- B2B-2B: supplier sells to a business customer that again sells to a customer that
is a business customer.
- B2B-2C: supplier sells to a business customer that directly sells to consumers.
Companies must not focus only on the direct customers but also on the
customers’ customers (indirect customers). Three different approaches for this:
1) Direct customer downstream support – based on the push marketing
principle. A B2B-supplier supports its direct customers to improve their power
and increase customer intelligence downstream in the value chain.
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