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Confidential – For The Intended Audience Only
Competing Along the Value Chain in B2B2C
Spartanburg, SCFebruary 6, 2020
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Who is the Customer? B2B or B2C?
§ Video Cassette Recorder (VCR)?
§ Residential Thermostat?
§ Tackifier for Hot Melt Adhesive?
§ Bottled Water?
§ Automotive Tires?
§ Metallic Pigment for Automotive Paint?
§ Fiber for Military Body Armor?
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Why it Matters – Because Business to Business Marketing is Different
Channels
Value
Segmentation
Brand
“Marketing”
B2C
§Established/Known
§Primarily Emotional
§ ”Personas”
§Leads
§A Department
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B2B
§Specialized/Evolving
§Primarily Economic
§Needs
§Follows
§Cross Functional Skill Set
Understanding the entire value chain is the only way to win
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Defining Markets: The Problem We Solve for a Set of Customers
Current Demand
AMPEX
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• The most interesting market may not exist
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The ‘Eco-system’ of Customer Problems
3-D Model – Thermostats
Product Solution
Applicati
on
Geo
grap
hyGlobal Energy Management
ClimateControl
Thermo-stats
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• A Better End-User Experience Can Transform a Market
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Value Mapping – Tackifier for Hot Melt Adhesives
‘Tackifier’ supplier Other ingredient suppliers
Adhesives Maker
Converter Brand Owner
End customer
Regulators – e.g., FDA
Packaging Consultants
Cares about supply, prices and breadth of applications
Often highly profitable – usually risk averse- Protect their brands
Cares about supply, prices and meeting needs of brand owners
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$ $$$$
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Influencers:
• Need to Understand Trade-offs at Every Level of the Value Chain
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Consumer Choice: Water vs. Other
Options
1 – 6 Brands at the typical retail outlet
75 + Brands in the US
Bounded Choice: Bottled Water
• Need to Frame Key Decisions from the Customer Perspective
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Automotive Tires – Who is the Customer…
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• Your Direct Customer May Not Understand The Value of Their Offering…
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Extracting Value from the Value Chain
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Example: Metallic Pigment for Automotive Paint
• …Or They May Even Try to Hide the Value from You
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Value Chain: Body Armor for the US Military
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Polymer Supplier
Fiber Maker
Garment Maker
DoD Buyer
Soldier
Congress
NGO’s/Media/Etc.
Influencers:
Shield Maker
• The End-User’s VoiceMatters, Even if No One is Currently Asking Their Opinion
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To Avoid These Traps: Become a Student of your Customer
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Premise 1: A “Market” is the Problem You Solve
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Premise 2: Observe, Don’t Just Ask
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Premise 2A: Problem may already be ‘solved’
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Premise 3: The Most Attractive Customer May Not Buy Directly From You (or may not buy anything today)
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Premise 4: Understand and quantify value
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Premise 5: Customers Are Not All the Same
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Premise 5A: You Are Not the Customer
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Summary: Understanding the Value Chain is a Critical Step in Building Winning Strategies in B2B2C
§ The most interesting market may not exist
§ A Better End-User Experience Can Transform a Market
§ Need to Understand Trade-offs at Every Level of the Value Chain
§ Need to Frame Key Decisions from the End-Customer Perspective
§ Your Direct Customer May Misinterpret The Value of Their Offering…
§ …Or They May Even Try to Hide the Value from You
§ The End-User’s Voice Matters, Even if No One is Currently Asking Their Opinion
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A final word to the wise
“If there is a better solution for the end-customer, then someone will find it. Strive to have that someone be you.”
- Jeff Bennett 2007
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“If there is a better solution for the end-customer, then someone has already found it and you just don’t know it yet!”
- Amphora Client 2017