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GLOBAL, B2B & SERVICE MARKETING > B2B - (2.4) Characteristics of B2B marketing elements > Flashcards

B2B - (2.4) Characteristics of B2B marketing elements Flashcards

1
Q

Give an overview of the B2B product mix

A
  • BRAND MANAGEMENT
    > Processing vs ingredient branding
    > Low importance of brand in general
  • INNOVATION MANAGEMENT
    > Customer integration
    > Test of market acceptance
    > Higher complexity of new product introduction process
  • MANAGEMENT OF ESTABLISHED PRODUCTS
    > Considerations of international standards
    > Product customization
    > Particular relevance of industrial services
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2
Q

Explain innovation management in product decisions =

A

> Customer integration
> Especially for investment/project business and supplier business.
> Higher motivation to participate than in B2C
> Risk: leaking of company knowhow

> Test of market acceptance
> Not as easy as in B2C
> Especially valuable for value proposition of start-ups

> Higher complexity of new product introduction process
> Involvement of many people (buying center)
> Often very technical

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3
Q

What is the relevance of industrial services in B2B?

A

**Customers demand them = outsoursing, focus on core competencies.
**Supplier offers them to benefit from advantages:
> Product differentiation
> Reduction of price pressure
> Higher profit (service generates revenues)
> Diversification intro service sector
> Stabilization of demand
> Establishment of market entry barriers

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4
Q

Explain basis & value-added services

A

Product core < additional features < packaging and design < basic services < value added services < brand

BASIC =
* Have to be provided to sell the basic product - Ex. setting up
VALUE - ADDED =
* Not necessarily prerequisites for the acceptance of the product by the customers but substantial improvement in customer value

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5
Q

What is SI and how is it related to B2B and B2C?

A

Service Innovation = firm’s exploitation of an idea for a service that is new to the firm and intended to provide new benefits for: business customers (B2B) or individual consumers (B2C).

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6
Q

Why is SI-B2B necessary?

A
  • B2B takes a large share of all markets
  • Growing number of B2B are becoming service dominant because it creates long lasting relationships
  • Companies depend on new services or service innovation for growth
    » B2B-SI has a greater positive effect on firm value than B2C + firm risk does not get raised as much. Launching B2B-SI should always be prioritized.
    (Dotzel and Shankar)
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7
Q

What is the impact of product innovations?

A

SI is used to innovate products > services are differentiated from competitors + long term relations
» Coordinate SI and PI on a strategic level, hybrid innovation where possible.

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8
Q

What are solutions?

A

Tuli et al:
* Supplier = combination of products and services that are integrated and customized to solve the specific business problems of customers (a product bundle)
* Customer = “finding what i need, meet my requirements and work well with each other, bringing this into my business and ensure that the widgets do what they are required to do”
» Requirements definition
» Customization & integration
» Deployment
» Post-deployment support
(= 4 relational processes)

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9
Q

What about product customization in B2B?

A

Determine the optimal degree of individualization, taking benefits (higher preference and longer loyalty) and complexity cost into account.

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10
Q

What about international standards in B2B?

A
  • National (NBN - Belgium)
  • Multinational (EN -Europe)
  • International (ISO -International
    Standardization Organization)
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11
Q

Why is brand management generally less important in B2B?

A
  • High relevance of objective product features such as quality or specifications
  • BUT Increase in importance last years
  • Brands in B2B help to reduce purchase risk and to increase profitability
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12
Q

What is the difference between an ingredient brand and a procession brand?

A

Ingredient brand = visible to end customer Ex. Gore Tex
Processing brand = not visible to end customers (due to many chains in between)

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13
Q

Give an overview of the B2B pricing mix

A
  • PRICE ENFORCEMENT
    > Benefit selling
    > Rational decisions by buying center members
  • PRICING OF NEW PRODUCTS
    > Individual pricing
    > Competitive bidding
    > Auctions
  • PRICING OF ESTABLISHED PRODUCTS
    > Pricing of industrial services
    > Price differentiation and bonuses/rebates
    > Price protection measures
    > Limited customer manipulation
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14
Q

Explain individual pricing in pricing of new products =

A
  • Each customer gets its own price
  • Especially relevant for investment/project business
    > Customized quotations
    > Customer specific service costs
    > Project-specific servive costs
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15
Q

Explain competitive bidding in pricing of new products =

A

Organizational customers get invitations to bid.
> Customer goal = best supplier at lowest price.
> Supplier goal = bid accepted at highest possible price.
» Most relevant for government organizations and institutions
» Open and closed biddings exists

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16
Q

Explain auctions in pricing of new products =

A

Increasing importance in B2B pricing&raquo_space; ex. selling used capital goods via the internet.

Upcoming: reversed auctions
= customer initiates the auction
> Supplier bid on prices for which they would be willing to sell their products.
> Lowest offer for best product gets selected (suppliers try to undercut the offers of competitors)

17
Q

Explain limited customer manipulation in pricing of established products =

A

Spohisticated price tracking by organizational customers = more accurate historical and current price information.
» Price changes are not an issue in the most bidding situations.

18
Q

Explain price protection measures in pricing of established products =

A

Price changes during production process
> Compensation for future price fluctuations on the cost side
> Significant increases must be documented

19
Q

Explain price differentiation and bonuses/rebates in pricing of established products =

A

Prices, terms of payment and financing services are often derived from price negotiations = 1st degree of price discrimination = every customer gets his own price.
» Based on purchase quantities and customer segments.
» Information exchange between customers is a problem;
» Buyers can get compensated on the discounts and bonuses they receive.

20
Q

Price explosion for industrial
producer prices in 2022 and decrease in 2023. Why?

A

Soaring energy prices

21
Q

Who is EU-20?

A

Name of 20 members of monetary union in 2023.

22
Q

Intensity of price differentiation in
business-to-business marketing - what is driving the different price?

A

Quantity > Customer segment > Sales region > Sales channel > Time of purchase

23
Q

Price enforcement in B2B (prijshandhaving)=

A
  • Rational decisions by buying center but still sensitivities based on role&raquo_space; communicate prices differently to realize max price levels
  • Benefit selling : relate features of the presented product to important customer benefits = features as basis for deriving product advantages and customer benefits
    » Opposite of character selling
24
Q

Explain how communication decisions should be more personalized and technical in B2B =

A
  • Vital role of tech infor > organizational customers want more info and prossess a better understanding
  • Satisfying different information requirements in packages > user about options, buyer about prices and terms
  • Personal character of communication, possible because of limited number of customers and direct, personal sales plays a key role
25
Q

Which instruments are popular in B2B communication and marketing?

A
  • Trade fairs > for selling and non-selling objectives
  • Conventional advertising = less significant
    > Use it for conveying an image and technical advantages
    > Influence stakeholders
  • Social media use
    > Reliance - info about employer brand
    > Linkedin = most important - CEO’s as influencers
26
Q

Explain the B2B sales decision for direct, personal selling with focus on key accounts

A
  • Focus on direct sales channel as it is possible with limited customers, high degree of product customization and complexity
  • Relationship building to major sales partners, key accounts and creation of supplier alliances
  • Strong relevance of personal selling > sales employees are the reference for customer loyalty - increasing importance of call centers and video conferencing
27
Q

What are key accounts?

A

Corporate customers that are extremely important to a selling firm due to their actual or potential purchasing volume

28
Q

What are important aspects of key account management?

A
  • Resource allocation for these specific accounts
  • Organizational structures ex. key account manager
  • Controlling systems
  • Special offers
  • Special relationship management
29
Q

What are the criteria of being a key account?

A
  • PROACTIVE
    > Economic potential
    > Economic importance
    > Know-how
    > Image
    *REACTIVE
    > Demand for key-account status
    > Internal problems
30
Q

What are sales logistics decisions in B2B?

A
  • SUPPLY GUARANTEES
    > Especially for supplier business
    > Warehousing services
    > No storage manufacturing approaches
  • INTEGRATION OF SALES LOGISTICS
    > Enables faster procurement and production processes for the customers
    > Can be supported by concepts such as electronic data interchange
31
Q

Explain CRM and loyalty in B2B:

A
  • Different loyalty criteria
    > Quantity related (add purchases)
    > Price related (high willingness)
    > Resource related (relation specific investments)
    >Time related (customer decision stable over time)
  • Different customer loyalty activities
    > Reinforcement - reward for loyalty
    > Tools for barriers - punish for poor loyalty
    > Mixed: generate efficiency benefits, which are lost if the supplier changes

GLOBAL, B2B & SERVICE MARKETING (13 decks)

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