learner guide for business-to-business marketing...

IMM GSM© of 58 BBM001/ BBM

Learner Guide for

Business-to-Business Marketing (BBM001)

Business-to-Business Marketing (BBM) 2011

The copyright of all IMM Graduate School of Marketing material is held by the

IMM GSM. No material may be reproduced without prior written permission of

the IMM GSM.

Revision: September 2009


Table of Contents

SECTION A ................................................................................................... 3

1. Word of welcome .................................................................................. 3

2. How to use the guide ............................................................................ 3

3. Purpose and overall learning outcomes ................................................ 5

4. National Qualification Framework specifications ................................... 7

5. Pre-knowledge ...................................................................................... 7

6. Relationship with other modules ........................................................... 7

7. Prescribed textbook .............................................................................. 7

8. Curriculum ........................................................................................... 10

9. Specific learning outcomes ................................................................. 11

10. Critical cross-field outcomes ............................................................... 14

11. Assessment details ............................................................................. 16

SECTION B ................................................................................................. 17

Chapter 1 – Introduction to Business Marketing .......................................... 17

Chapter 2 – The Character of Business Marketing ..................................... 20

Chapter 3 -The Purchasing Function .......................................................... 23

Chapter 4 – Organisational Buyer Behaviour .............................................. 27

Chapter 5 – Market Opportunities ............................................................... 30

Chapter 6 – Marketing Strategy .................................................................. 33

Chapter 7 – Weaving Marketing into the Fabric of the Firm ........................ 36

Chapter 8– Developing and Managing Offerings ........................................ 39

Chapter 9 – Business Marketing Channels ................................................. 42

Chapter 10 – Creating Customer Dialogue ................................................ 44

Chapter 11 – Communicating via Advertising, Trade Shows and PR ......... 47

Chapter 12 – The One-to-One Media .......................................................... 49

Chapter 13 – Sales and Sales Management ............................................... 51

Chapter 14 – Pricing and Negotiating for Value .......................................... 53

Chapter 15 – Evaluating Marketing Efforts .................................................. 55

Chapter 16 - Customer Retention and Maximisation ................................... 57


SECTION A

1. Word of welcome

Welcome to the fast paced and competitive field of business-to-business

marketing! This study guide is your detailed outline of the Business-to-

Business Marketing programme. Distance learning is never easy, but by

working through this guide, step-by-step, you will be well on your way to

understanding and success.

Marketing and business marketing in particular, is an art as well as a science!

Studying it is the science - practising it is the art. Business-to-Business

Marketing is also an evolving science and it is important that you become

aware of the developments and changes taking place in marketing in today’s

dynamic markets. The prescribed text provides in-depth material on business

to business marketing trends, such as creating value, developing offerings

and evaluating marketing efforts.

Throughout this programme you will be made more and more aware of the

increasingly competitive business world that businesses operate in. The

ultimate objective of this programme is to equip you to analyse situations and

develop workable business-to-business strategies. By the end, you will have

a good feel for the nature of business-to-business markets and how to

develop strategies for organisations focusing on business-to-business

marketing.

2. How to use the guide

This learner guide has been designed as an aid to assist you in successfully

completing the programme in business-to-business marketing. It is not

intended to replace your textbook; instead it will guide you through each unit

of study. This learner guide is divided into two sections:


SECTION A provides all the information needed about the business-to-

business marketing course and where it will lead you on your path of learning

within the context of the South African National Qualifications Framework

(NQF).

SECTION B guides you through the 16 chapters that make up this

programme. You need to study each chapter systematically. The outcomes

tell you what you should learn; the guidelines assist you as to how best to

achieve the outcomes; the self-assessment exercises enable you to measure

how well you have achieved what you set out to learn. Make sure that you

understand and can do all the exercises. This will ensure your success in the

examination.

The learner guide is especially designed for distance education students. The

guide will provide an overview of the total curriculum and will indicate the

learning outcomes, which are essentially the core of this guide. It will provide

you with each major topic that has to be covered, along with the learning

outcomes for each topic, which are systematically explained. The guide will

also indicate how the learning material must be prepared for examination.

The learner guide should be studied in conjunction with the textbook and does

not replace the textbook.

At the end of each study unit you will find some typical examples of

examination questions which should be used for self-evaluation.

The following icons appear in all of the learning guides of the IMM Graduate

School of Marketing:

indicates learning outcomes


indicates the sections in the prescribed textbook that you

need to study.

indicates the self-evaluation questions.

3. Purpose and overall learning outcomes

The fundamental aim of this programme is to introduce you to the character

and principles of business-to-business marketing and how it differs from

consumer marketing. You will be exposed to the philosophies, elements and

concepts and, through this, will develop an understanding of the functions and

role of business-to-business marketing in the world today. It will be reinforced

by examining the way in which business-to-business marketing interrelate

with other factors, both inside and outside the organisation.

You will also be made aware of the terminology of business-to-business

marketing and the importance of the definitions in the associated context that

they are used.

The overall course objectives for business-to-business marketing are:

• Understanding the similarities and differences between consumer

goods and business-to-business marketing.

• Develop a managerial approach to business-to-business marketing.

• Develop and contribute towards marketing strategies for organisations

focusing on business-to-business offerings.

• Understand the uniqueness of business marketing and the radical

difference in the purchasing function


In conclusion, your objective for this programme must be to understand the

basics of business-to-business marketing – the concepts, principles,

terminology and real meaning. By developing a broader view you will enable

yourself to see business-to-business marketing in context with consumer

goods, markets, products, processes, customers, your own business

objectives and relationships.

On successful completion of business-to-business marketing, you should:

• Understand the uniqueness of marketing for business-to-business

marketers.

• Understand the techniques of business-to-business marketing and use

suitable concepts.

• Understand the relationship between marketing and sales.

• Understand the various components of business-to-business marketing

and the marketing mix.

Through studying this subject you will:

• Be able to use various marketing techniques (e.g. positioning, price

and demand management techniques) to plan and execute a

marketing strategy for business-to-business organisations.

• Be able to analyse and implement a marketing plan to promote

business-to-business marketing.

4. National Qualification Framework specifications

This module forms an elective module for the Diploma in Marketing

Management and the BBA in Marketing Management.

In terms of the new National Qualification Framework (NQF) it is designed as

a 20-credit module offered on NQF level 7.


The IMM Graduate School of Marketing regards Business-to-Business

Marketing as an elective module.

5. Pre-knowledge

It is a requirement that you successfully complete principles of marketing

before commencing your studies of business-to-business marketing. What is

taught in principles of marketing is applied and expanded upon in this course.

It is also assumed that you will be sufficiently computer literate and that you

will be able to operate the internet when attempting this module. It is further

assumed that you would have had sufficient experience in producing

advanced assignment reports integrating diverse information in a coherent

purposeful report.

A sound knowledge in the use of the Harvard Referencing System is

compulsory before attempting this module.

6. Relationship to other modules

Business-to-Business Marketing is an elective that supports and augments

the core and fundamental modules offered by the IMM GSM. It enables you

to apply business-to-business marketing principles and helps to develop a

thorough understanding of the principles and practices of business-to-

business marketing.

7. Prescribed textbook

Prescribed textbook

The prescribed textbook for this course is:


Dwyer, F.R. & Tanner, J.F. (2009) Business Marketing: Connecting

Strategy, Relationships and Learning. New York: McGraw-Hill Irwin.

The prescribed textbook, Business Marketing: Connecting Strategy,

Relationships and Learning, focuses on the application of marketing theory in

business-to-business organisations and introduces issues unique to business-

to-business organisations.

This textbook also focuses on the players and relationships in business

marketing and delivering value to customers. You will be introduced to many

new concepts, some of which you would not have generally associated with

marketing management. Industrial an business purchases usually tower over

consumer purchases making the scope of business-to-business marketing is

very wide indeed, making it a very exciting area of specialisation.

To summarise, the prescribed textbook contains the following:

• Business to business boxes which are designed to encourage you to

reflect on the chapter material. These boxes will also help you to consider

ethical issues relevant to the business to business marketing environment.

• Key terms can be found at the end of each chapter. Each key term is in

bold print in the chapter’s sentence in which the definition is located. Key

terms can also be found in the glossary at the back of the textbook. Key

terms include both academic terms and jargon from the business to

business marketing field.

• Discussion questions including two or more ethical considerations that

generally attempt to integrate material across chapters.

• Caselets which include short cases designed to provide a greater

understanding than a discussion question, without the depth of analysis of

a full case.

• Comprehensive cases designed to integrate material across several

chapters are found at the end of the textbook.


• From the field boxes include original text based on interviews of business

marketing practitioners around personal profiles, technology and global

considerations.

• Additional readings represent the most recent and relevant research.

Additional reading

To really gain a thorough understanding of business-to-business marketing

and how to plan and execute marketing strategies for business-to-business

organisations, you are advised to observe how different business-to-business

organisations in your environment create value, and to read additional

textbooks relating to the topic of business to business marketing.

The IMM GSM recommends texts for each one of the subjects offered. The

purpose of these texts is to supplement the material in the prescribed

textbook. The following has been recommended for Business-to-Business

Marketing:

• Blythe, J. & Zimmerman, A. (2005). Business to Business Marketing

Management. London: Thomson Learning.

Resources

It is very important that, while reading the material, you always have a

dictionary handy. As you come across a term or word that you are not familiar

with, you should look it up and jot down the meaning, as these words are sure

to reappear in your study themes. There may be technical terms that are not

in your dictionary. For those, you will need to refer to your textbook or to a

business-to-business marketing book in the library. At the back of some

textbooks, you will find a glossary of terms.

Most libraries contain many reference textbooks on the subject of business-to-

business marketing. When researching a particular topic/theme, look at the


table of contents in the front of the book and in the subject index at the end of

the book to find out if what you are looking for is included. You will find that

most librarians are knowledgeable and helpful in assisting you in finding

information. They can also source books for you from other libraries (inter-

library loan).

Most libraries have a periodical section in which you can find useful

magazines and newspapers. These will help you understand the South

African and global business-to-business marketing environment.

Your appreciation of the programme will be enhanced through the use of the

Internet. It is strongly recommended that you use a well-known search

engine, such as Google (www.google.com). Type in the key concept and

refine the search by searching within results. This will be particularly useful

when doing your assignments.

8. Curriculum

This section addresses the overall content of the module. The Business-to-

Business Marketing curriculum is divided into six units. The six units with the

corresponding chapters in the prescribed textbook (Dwyer & Tanner, 2009)

are as follows:

Unit Description Relevant Chapters

1 Business Markets and Business

Marketing

Chapters 1 to 4

2 Foundation for Creating Value Chapters 6 to 7

3 Business Marketing Programming Chapters 8 to 14

4 Managing Programs and Customers Chapter 15 to 16


9. Specific learning outcomes

There are a number of specific learning outcomes for this module, as

indicated per study unit in the table below.

Unit Description Learning Outcomes

1 Business

markets &

business-to-

business

marketing

Identify the differences between consumer goods

marketing and business marketing and explain how

these differences contribute to the uniqueness of

business marketing.

Discuss the nature of demand for business

products.

Identify the types of customers in the business

market.

Explain the concepts supply chain management

and relationship management

Discuss the development of high-performance

criteria for relationships.

Sketch the Relationship Development process and

explain it in your own words by using examples.

Illustrate how relationships can be safeguarded

Explain how the purchasing department contributes

to the competitive advantage of a firm

Use the buy-grid model to explain the buy phases

and the buy classes in business marketing.

Illustrate the use of the multi-attribute decision

making model.

Identify and explain the most recent trends in

purchasing.

Explain how the organisational buying process

differs in the different buying situations.

Discuss the forces that influence organisational

buying behaviour.


Illustrate how knowledge of organisational buying

behaviour enables the marketer to make more

informed decisions regarding the marketing

programme.

2 Foundations for

creating value

Explain how organizations can maximise their value

from current customers

Discuss and compare the alternative means of

customer research

Segment business markets

Apply basic modules to evaluate the potential of

market segments

Identify and discuss the elements of a business

strategy

Discuss the steps in developing a strategy

Use the five forces model to explain the nature of

competition in an industry.

Discuss the requisites for a learning organization

Explain the role marketing plays in creating and

maintaining a market orientation.

Describe the internal partnerships that must be

developed with marketing

Identify the skills that marketing managers need to

build internal partnerships

3 Business

marketing

programme

Apply the product life cycle approach to managing

existing products.

Discuss the process of developing new products

Identify and discuss the factors that contribute to

the success or failure of new products

Provide guidelines on when and to harvest products

Identify the channel alternatives in the business – to

– business market.

Identify and describe the role of the different

participants in the business – to – business


marketing channel.

Provide a step – by – step discussion of the channel

design process.

Discuss the channel management tasks.

Identify and discuss the different classes of channel

systems

Discuss the steps in the IMC planning process

Explain the strengths and weaknesses of the

different IMC communication elements

Discuss the role of advertising in business – to –

business marketing

Discuss the decisions that must be made when

designing a business – to – business advertising

strategy

Illustrate the use of public relations

Illustrate how a trade show should be managed

Illustrate the role of sales in business marketing

Illustrate the role of sales in relationship building

Identify and discuss the components of sales force

management.

Discuss the role of price in the cost/benefit

calculations of organisational buyers.

Discuss the key components of the industrial pricing

process.

Discuss the following issues in price management:

Channel pricing

Product line pricing

Bidding

Negotiations

4 Managing

programmes

and customers

Select appropriate tools of control for specific

situations.

Explain the use of the balanced score card

Discuss how control processes contribute to other


organizational processes such as reengineering

and strategic planning

Graph the profit implication over a range of

customer retention probabilities

Describe the key avenues for bonding exchange

parties in a relationship

Discuss three avenues for strengthening

relationships

You are encouraged to use the above information for the planning in advance

of your studies and to avert “cramming”. It is always wise to set up your own

study timetable so that you can manage your time effectively. When planning

your studies, please keep the submission date for the assignment in mind.

10. Critical cross-field outcomes

The critical cross-field outcomes, also known as transferrable skills as

identified by the South African Qualifications Authority (SAQA), are essential

for your development as a student within the education and training system,

regardless of the specific area of learning. It is these outcomes that are

deemed critical for your development in the capacity of life-long learning.

The critical cross-field outcomes adopted by SAQA are as follows:

(1) Identify and solve problems in which responses display that

responsible decisions using critical and creative thinking have been

made.

(2) Work effectively with others as a member of a team, group,

organisation and community.

(3) Organise and manage oneself and one’s activities responsibly and

effectively.

(4) Collect, analyse, organise and critically evaluate information.

(5) Communicate effectively using visual, mathematical and/or language

skills in the modes of oral and/or written presentation.


(6) Use science and technology effectively and critically, showing

responsibility towards the environment and health of others.

(7) Demonstrate an understanding of the world as a set of related systems

by realising that problem-solving contexts do not exist in isolation.

(8) Reflecting on and exploring a variety of strategies to learn more

effectively.

(9) Participating as responsible citizens in the life of local, national and

global communities.

(10) Being culturally and aesthetically sensitive across a range of social

contexts.

(11) Exploring education and career opportunities.

(12) Developing entrepreneurial opportunities.

The transferable skills identified in this module are as follows:

Taught Practised Assessed

Problem solving X X X

Working in teams X X

Self-management X

Information gathering/research

skills

X X X

Communication skills X X X

Analytical skills X X X

Learning strategies X X X

Responsible citizenship X X

Cultural sensitivity X X

Career development X

Entrepreneurship X

Problem-solving X X X


11. Assessment details

There are two assessments involved in terms of the Business-to-Business

Marketing module:

• Assignment: The assignment contributes 20% to the overall mark for

the module. Assignments will focus on selected chapters, and need to

be typed. Please ensure that you adhere to the general rules of the

IMM Graduate School of Marketing pertaining to the style and format of

assignments. You will be issued with a separate brief in this regard.

• Examination: The exam incorporates all content covered in the

workbook and constitutes 80% of the final mark for the Marketing

Research module. The duration of the examination is three hours and

the paper will count 100 marks. The examination paper will consist

mainly of paragraph and essay type answers. Examination results are

usually released within six weeks of sitting the examination.

The final mark, consisting of an assignment mark and an examination mark, is

released in the form of a final percentage (mark out of 100). The grading

system is as follows:

Percentage Scale Description

75% or more Pass with Distinction

50% - 74% Pass

0% - 49% Fail

A timetable of the assessment programme for the semester, including dates

for the assignment to be submitted during the course of the year, is available

in the Calendar of Events for that year. Please refer to the current issue of

the IMM GSM Prospectus. This document and the Student Yearbook provide

details of the IMM GSM assessment policy.


SECTION B

Chapter 1 – Introduction to Business Marketing

1. Overview of Textbook Content

This chapter introduces the learner to the uniqueness of business marketing

and business markets. Business marketing is not the same as marketing to

consumers. It involves the marketing of products and services to other

businesses or organisations which quite often facilitate their operation. To

better understand this you will need to take a closer look at the entire

business to business system.

2. Topics

• The importance of business marketing.

• Similarities and differences between consumer marketing and business

marketing.

• Characteristics of business markets, types of customers, the products they

purchase, complex processes, standards of purchasing, the size and

location of customers and the nature of business relationships and

demand.

• The nature of demand for business products and services.

• The relationship between buyers and sellers.

• The entire business to business system.


3. Learning Outcomes

4. Reading References

Study Dwyer & Tanner – Chapter 1

After studying this chapter, learners will be able to:

� Understand the importance of business markets and the

uniqueness of business to business marketing

� Identify the differences between consumer goods

marketing and business marketing and explain how these

differences contribute to the uniqueness of business

marketing relating to:

• Buyer-seller relationships

• Distribution channels

• Selling

• Electronic platforms e.g. web

• Promotional strategy (consumption, knowledge of

the customers customer and marketing research)

� Discuss the types and nature of demand for business products (derived

demand and joint demand)

� Identify the types of customers in the business market (equipment

manufacturers, users, government agencies, institutions, industrial

distributors)

� Illustrate the uniqueness of business markets (types of customers, types

of products they purchase, size and location of customers, complex

procurement processes, standards of purchasing, nature of business

relationships and nature of demand).


5. Suggested Questions

1. Discuss the major differences between consumer marketing and

business marketing.

2. Discuss the different categories of business market customers.

3. Explain the concepts derived demand and joint demand. Use

examples to demonstrate your understanding of the concepts.


Chapter 2 – The Character of Business Marketing


This chapter points out that the business market consists of a line up of

different players that jointly create value through supply chain and relationship

management. It reviews a number of concepts; how effective pricing can

create value, how value is determined in exchange, conditions that impair the

performance of pure markets to coordinate business exchange, a range of

buyer and seller motivations in developing and maintaining an exchange

relationship, the relationship development process, complementary

mechanisms for coordinating business transactions, participants in the value

chain and marketing efforts.

Because no firm does everything in-house it is said that markets provide for

most business and individual needs. This is referred to in this chapter as the

co-ordination of markets. However, even though markets work to improve

productivity, quality and living standards, there are conditions that impair the

performance of pure markets. It is because of this that the concepts of Supply

Chain Management and Relationship Management become key to creating

value and motivations within business relationships between buyers and

sellers.

You need to develop a good understanding of how relationships develop and

how to manage and sustain these relationships. You need to be aware of and

considerate towards the stakes of both buyers and sellers. This is why the

preferences of both buyers and sellers are discussed in detail in this section.

After all is considered, managers want their relationships to be profitable and

will continuously strive towards developing higher standards and better

relationships. Know what is meant by this concept and ensure you can explain

not only what supply chain management and relationship management is but

also how to safeguard relationships.


2. Topics

• Supply chain management

• Relationship management

• Developing relationships

• Safeguarding relationships

• Types of relationships

3. Learning objectives


� Explain how value is determined in exchange between buyers

and sellers

o Buyers gauge value

o Sellers opt in or out

� Explain the concepts of supply chain management (efficiency

gains, effectiveness payoffs) and relationship management

(motives, transactional exchange, unequal and joint interest in

relating, key managerial implications of relationships)

� Discuss the development of high-performance criteria for

relationships;

o Preferences of sellers and buyers

o Designing new standards

� Internal assessments

� External measures

o Higher standards

� Sketch the model of Relationship Development and explain it

in your own words by using examples.

o Awareness

o Exploration

� Attraction

� Communicating and bargaining

� Power and justice

� Norms development



Study Dwyer & Tanner – Chapter 2.


1. Use the “Realm of buyer-seller relationships” model to explain how

buyers and sellers can differ in their motivation to relate.

2. Discuss Dwyer et al model for explaining the Relationship

Development Process.

3. Suggest and discuss methods that can be used to safeguard

relationships in business markets.

4. Explain the concepts of Supply Chain Management and

Relationship Management.

5. Explain how value is determined in exchange between buyers and

sellers.

o Expansion

o Commitment

o Dissolution

� Illustrate how relationships can be safeguarded

o House calls

o Trading places

o Managing dependence

o Supplier pledges

o Contracts

o Ownership

� Understand the dynamics of relationships in larger networks

and summarise the various types of business relationships


Chapter 3 -The Purchasing Function


The chapter provides an overview of the purchasing function; how effective

purchasing and materials management provide a competitive advantage,

strategies for supply, total cost of ownership, evaluating vendors, ethics and

differences with government purchasing. Purchasing is an extremely

important business function. This chapter highlights its importance and

illustrates various strategies that are available to buyers. You will need to gain

an in-depth understanding of this section and you will need to be able to list

and describe the steps in the buying process as well as the process that

buyers use to evaluate vendors and their offerings. Effective purchasing is

critical to any organisation and must provide appropriate levels of supply of

the right product or service at the correct level of quality for the lowest cost.

By reviewing various purchasing philosophies, processes and trends, you will

have a greater understanding of how to achieve this.

2. Topics

• The purchasing function’s contribution to the firm

• Purchasing philosophy

• Supplier evaluation

• Steps in the buying process

• Multi-attribute decision making

• Trends in purchasing

• Purchasing in government

• Ethics in purchasing




• Explain how the purchasing department contributes to the

competitive advantage of a firm

o Providing supply

o Correct quality (total cost of ownership, economic order

quantity, value analysis)

• Discuss the purchase philosophies that buyers may use to

guide their actions

o Adversarial purchasing philosophy

o Partnership purchasing or preferred supplier systems

o Single sourcing

• Use the buy-phase model to explain the steps in the buying

processes in business marketing;

o Step 1 – Recognition of a need

o Step 2 – Definition of the product type needed

o Step 3 – Development of detailed specifications

o Step 4 – Search for qualified suppliers

o Step 5 – Acquisition and analysis of proposals

o Step 6 – Evaluation of proposals and selection of a

supplier

o Step 7 – Selection of an order procedure

o Step 8 – Evaluation of product performance

• Discuss how buyers can use the multi-attribute decision

making model to assist them in making buying decisions.

• Understand the importance of selling to government and

what influences government purchasing policies most.

o Political and social goals

o Marketing to government





1. Explain how the purchasing function contributes to the competitive

advantage of a firm by supplying the right product at the correct quality

level for the lowest cost.

2. Describe step by step the steps in the buying process.

3. Use the multi-attribute model to rate two brands of desk printers and

explain how you would use this information to make buying decisions.

4. Discuss the most recent trends in purchasing.

5. Discuss the purchase philosophies that buyers may use to guide their

actions.

• Identify and explain the most recent trends in purchasing;

o Demand planning

o Globalisation

o Increased price pressure

o Outsourcing

o Stronger relationships with sellers

o Cross-functional teams

o Professionalism in purchasing

• Discuss the importance of ethics in business and

purchasing;

o Receiving gifts

o Encouraging ethical conduct

o Access to information


6. Why is ethics in purchasing so important and what should buyers be

on the look out for?


Chapter 4 – Organisational Buyer Behaviour


Understanding the dynamics of organisational buying behaviour is crucial for

identifying profitable segments of the market, for locating buying influences

within these segments and for reaching these organisational buyers with an

offering that responds to their needs. This chapter explores the stages in the

organisational buying process and the factors that influence organisational

buying behaviour including; how individual needs may override or influence

the rational decision-making process, predicting marketing action based on

the choice of a particular buying theory, describing the influence of risk on

buyer behaviour and how these theories work with partnering.

You have already explored the theories and strategies regarding procurement

in organisations. What you need to know and understand is that all decisions

are made by individuals and that individuals have their own agenda, quirks,

likes and dislikes. This section is all about people and focuses on theories that

are useful when faced with making decisions, especially about what products

to market, how to set prices and what communications and sales processes to

use.

2. Topics

• Buying determinants theory

• Role theory

• Individual buyer theory




� Discuss the buying determinants theory and the factors that

influence organisational buying behaviour;

o Environmental factors

o Market factors

o Organisational factors

o Individual factors

� Discuss role theory and the suggestion that people behave

within a set of norms or expectations of others due to the role in

which they have been placed including;

o Roles in the buying centre

o Dimensions of buying centres

• Time dimensions

• Vertical and horizontal dimensions

• Formalisation dimension

o Marketing to buying centres

o When buying centres occur

• Sources of perceived risk

• Using information to reduce risk

• Using loyalty to reduce risk

• Spreading the risk

� Address individual differences in buying using the individual

buying theory and by;

o Comparing behaviour choice and multi attribute

o Integrating behaviour choice and buying determinants

o Marketing and buyer behaviour choice

� Illustrate how knowledge of organisational buying behaviour

enables the marketer to make more informed decisions

regarding the marketing programme.





1. You are a buyer employed at Toyota’s factory responsible for

buying small components such as spark plugs, oil & petrol

filters, batteries, fan belts, etc. Discuss the factors that will most

probably influence your buying behaviour.

2. Explain how the composition of the buying centre evolves

during the purchasing process and how it varies from one form

to another as well as from one purchasing situation to another.

What steps can a salesperson take to identify the influential

members of the buying centre?


Chapter 5 – Market Opportunities


Opportunities are all around us. Often they are right under our noses.

Whether from existing customers or potential new customers, the ability of an

organisation to create and fulfil market opportunities gives business marketing

organisations a significant competitive advantage. This chapter explores the

opportunities for gaining increased business from current customers and new

customers and includes topics such as customer databases, customer

research, collaboration between customers and suppliers, segmenting

business markets and applying basic models to evaluate the potential of

market segments.

As a future business to business marketer, you will need to be able to identify

opportunities across all areas of the business and turn them into successes.

Not all opportunities will bring returns and not all customers will be equal in

their importance. Different groups of customers need different strategies.

Existing customers already have a trust with the company and may be more

open to the introduction of new products and services. In addition, good

relationships with customers could highlight new opportunities that you may

not have seen. The topic of customer data and research is touched on quite a

bit in this section. Data is very important and helps to support account

management activities.

Segmentation is also very important and you must be able to put your point

forward as to how segmentation can benefit the business to business

marketing initiatives of an organisation. If you wish to communicate effectively

with your customers, you must know who they are and what their needs are.

Segmentation can play a critical role in marketing communication and product

growth opportunities.


2. Topics

• Opportunities to grow business from current customers

• Finding opportunities with current customers using data and research

• The acquisition of new customers

• The search for look-alikes

• Market segmentation

• Segment criteria

• Market assessment tools

• Market share estimation

3. Learning outcomes


� Explain how organisations can maximise their value from

current customers.

o Best customers

o Customer maximisation

o New products

o Network payoffs

� Understand how to go about finding opportunities with

customers.

o Data warehousing

o Customer research

� Discuss and compare the alternative means of customer

research.

o Focus groups and surveys

o Joint development and testing

o Customer visits

� Explain how organisations can find opportunities through the

acquisition of new customers.


� Correctly segment business markets and use market

assessment tools.

� Apply basic modules to evaluate the potential of market

segments.




1. Discuss what marketers can do to grow their business and how

they should go about finding opportunities with current

customers

2. Discuss and compare the alternative means of customer

research.

3. Explain how organisations can find opportunities through the

acquisition of new customers.

4. Discuss the basic modules you would use to evaluate the

potential of market segments.


Chapter 6 – Marketing Strategy


All companies have to strategically plan and forecast their future growth and

returns. As a business to business marketer you will not only be required to

give input into the formulation of strategy, but you may also be required to

facilitate and oversee the gathering of relevant information to the various

elements that make up a business strategy and marketing plan.

This chapter examines how organisations in business markets develop

marketing strategies and formulate a marketing plan. Key discussion points

include developing a business strategy, conducting a SWOT analysis,

analysing competition while considering the five forces, the nature of

competitive advantage and the characteristics that enable learning and the

creation of a dynamic strategy.

This is one of the most important sections in this elective programme. You

can be sure that strategy will be included in your examination and

assignment. It is vital that you not only understand the various parts that make

up a strategy, but that you are also able to interpret your findings into a

recommendation.

2. Topics

• Elements of a business strategy

• Developing strategy

• Understanding competitive pressures

• Strategic implications of the five competitive forces

• The organisational context for competing

• Organisational learning and memory




� Identify and discuss the elements of a business strategy

o Product Markets

o Relationships

o Resources

o Objectives and plans

o Additional facets of strategy for a stable of business

• Resource allocation

• Synergy

� Discuss the steps in developing a strategy

o The process for strategies

o Situation analysis

o SWOT analysis

o The mission

� Use the Five Forces model to explain the nature of competitive

pressures in an industry and their strategic implications

o Rivalry in the industry

o Powerful customers

o Powerful suppliers

o Threat of substitutes

o Threat of potential entrants

� Understand and discuss the terms “Barriers to entry” and

“Barriers in flux” and how one would go about spotting and

defending against potential entrants

� Identify the limitations to competitive analysis of an

organisation

� Discuss the requisites for organisational learning and memory

o What is learning

o Managing organisational learning

• Visionary leadership

• Target and trajectory


4. Reading Reference



1. Identify and discuss the elements of a business strategy.

2. Explain step-by-step how you would develop a strategy for a

business market.

3. Analyse the competitive forces in a industry by using the five forces

model.

4. Outline the organisational characteristics that should enable

learning in an organisation.

• Information and value systems

• Creating and striving

• Execution


Chapter 7 – Weaving Marketing into the Fabric of the Firm


Like anything in life, you can either go it alone and be met with major

resistance, or you can learn to include people along the way to share in and

help develop your vision. Too often, good business ideas are met with

resistance and therefore fail because individuals, often marketers, fail to

include other areas of the organisation in their planning and strategy.

This chapter focuses on the role of marketing to carry the “voice of the

customer” to the rest of the organisation by building internal partnerships and

in so doing get the support and buy-in necessary for success. It looks at the

role marketing plays in creating and maintaining a market oriented culture and

the skills that are required by managers to build internal partnerships. The

concept of a learning organisation is also touched upon. Organisations learn,

marketing learns and even individual marketers learn. This process ensures

competitive advantage for the organisation. A culture of learning is therefore

essential for the long-term success of any business.

2. Topics

• Market oriented companies

• How market orientation impacts performance

• Internal partnering to create a market orientation

• Internal partners

• Partnerships in marketing

• Integrated marketing efforts

• Organisational structure - marketing partners

• Marketing orientation and organisational learning

• Organisational learning and competitive advantage

• How marketing learns

• The learning market-oriented individual






� Explain the role marketing plays in creating and maintaining a

market orientation.

� Describe the internal partnerships that must be developed with

marketing in order to “carry the voice of the customer” to the

entire organisation.

� Discuss possible barriers to internal partnering and the benefits

of internal partnering versus external partnering.

� Identify the skills that marketing managers need to build internal

partnerships.

� Understand how marketing learns and thereby gains competitive

advantage for the organisation.

o Cognitive mapping

o Experiments

o Learning laboratories

o Learning from others

o A commitment to learning

� Discuss the importance of the learning market-oriented

individual and the importance of internal partnering including

skills such as:

o Finance and accounting

o Questioning and listening

o Negotiation

o Analytical skills



1. Discuss how internal partnering can contribute towards a market

orientation.

2. Discuss the factors that contribute towards the integration of

marketing efforts.

3. Identify and discuss the skills that marketing managers need to

build internal partnerships.

4. Discuss the importance of the learning market-oriented individual.


Chapter 8– Developing and Managing Offerings


The ability of an organisation to put together a line of products and services

that provide superior value to customers constitutes the heart of business-to-

business marketing management. This chapter explores specifically the

managing of products over their life cycles and the new-product development

process. It is essential that you are able to apply portfolio and product life-

cycle approaches to the existing products and services within an organisation

in order to help you manage them. In addition, the process of being able to

develop products internally while considering partnering with suppliers and

customers is very important. Always remember that satisfying customer needs

is the objective for any product development or management process and that

successful product management comes as a result of successful integration

of many areas of the organisation. Working in isolation is not recommended if

you wish to be a successful product manager or business marketer.

2. Topics

• What is an offering?

• Managing products and services

• Product strategy and the Product Life Cycle concept

• Product portfolios

• Harvesting a product

• New product development

• New product success

• Accelerating the product development process

• Keys to innovation

• Challenges to new product success






� Manage the product strategy of existing products through each

phase of the product life cycle

o Development

o Introduction

o Growth

o Maturity

o Decline

� Discuss product portfolio and harvesting of a product

o When to harvest a product

o Challenges to harvesting

� Discuss the process of developing new products

o Generating ideas

o Screening and preliminary investigation

o Specify features

o Develop product

o Beta testing

o Launch

o Evaluate

� Identify and discuss the factors that contribute to the success

or failure of new products.



1. Some authors have combined the life cycle and portfolio matrixes

into one model. How would you do that? Explain the different

components of the model.

2. Discuss step-by-step the process of developing new products.

3. As a marketing manager how would you prevent the failure of a

new product?

4. Provide guidelines on how and when to harvest products.

5. As a marketing manager how would you accelerate the

development of a new product?


Chapter 9 – Business Marketing Channels


The channel component of a business-to-business marketing strategy has

important dimensions. First, the channel structure must be designed.

Second, the chosen channel structure must be managed to achieve

prescribed goals. This chapter focuses on the functions of a marketing

channel, the various intermediaries used in business marketing, customer

needs for channel service outputs, designing a channel system, the

challenges of managing channel relationships and coordinating activities

across organisational boundaries and various distribution system functions.

Marketing channels can be a major competitive advantage if organised

properly. They can save buyers the costs and frustrations of searching and

waiting for information. Marketing channels close many gaps between the

manufacture and use of products. The down side is of course the cost of

establishing and coordinating marketing channels and the difficulty associated

with adapting them to new environments. The big question is always whether

to make your own or buy someone else’s system. The positive is that if you

have the resources and funding available, your business could perform better

and more efficiently than your competitors.

2. Topics

• Channel and supply chain management

• Types of channel intermediaries

• Marketing channel design

• Channel management

• Channel relationships






1. Identify the channel alternatives in the business-to-business market

and explain the characteristics and role each alternative.

2. Give a step-by-step discussion of how you would design a channel

for a producer of chemical substances used by a variety of

industries.

3. Identify the different forms of channel conflict and discuss the

typical reactions to conflict.

4. What creates “power” in a channel? Discuss.

5. Identify and discuss the different classes of channel systems.


� Identify the channel alternatives in the business-to-business

market.

� Identify and describe the role of the different participants in

the business-to-business marketing channel.

� Provide a step-by-step discussion of the channel design

process.

� Discuss the channel management tasks.

� Identify and discuss the different classes of channel systems

o Transactional channels

o Administered channels

o Contractual channels

o Corporate channels


Chapters 10 – Creating Customer Dialogue


The focus of this chapter is to understand the process of customer

relationship management in relation to various marketing processes and how

strategy varies depending on the application of buying theory. Simply put its

all about communication between customers and marketers. Customer

relationships are one topic that you have already been exposed to. In this

section you will better understand how to integrate communication into the

customer relationship management process.

Business marketing communications have to be integrated and must form part

of the overall marketing plan. Remember that communication is not a one-way

street. Communication must flow both ways; from you to your customers and

back again. If you achieve this, you will understand your customers needs and

how best to meet them.

2. Topics

• The customer relationship management process

• Integrated marketing communication strategy

• The integrated marketing communication planning process

• Setting goals

• Roles for each communication element

• Create messages

• Strategies for customer retention and acquisition

• Budgeting for communications




� Discuss the steps in the CRM process;

o Segment & profile the market

o Design strategy

o Implement

o Evaluate

� Discuss the steps in the IMC planning process

o Setting goals

o Determine roles for each communication element

o Create messages

o Place messages in appropriate media

o Measure results

o Make adjustments in messages and/or media

� Discuss strategies for customer retention and acquisition

o Customer relationship communication

� Customer acquisition communication

� Discuss the benefits of communications budgeting

o Planning

o Coordination

o Control

� Explain the methods of budgeting for communication

o Breakdown budgeting methods

o Setting budgets to reach strategic objectives

� Explain the role, strengths and weaknesses of the different

IMC communication elements.

o Advertising

o Direct marketing

o Public relations

o Internet

o Trade shows





1. Why is it important for customer relationship management and

communication to integrate and form part of the marketing plan?

2. Explain the role, strengths and weaknesses of the different IMC

communication elements.

3. List and discuss the steps in the IMC planning process

4. What is the difference between customer relationship communication and

customer acquisition communication.

o Telemarketing

o Personal selling

o Marketing research

o Other touchpoints


Chapters 11 – Communicating via Advertising, Trade Shows and PR


As already discussed in the previous section, communication involves

dialogue that is not just one-way communication. In this chapter we begin to

explore communication tools via advertising, trade shows and public relations,

all of which are massive topics in their own rights. The focus is around setting

goals for each, developing strategies and also looking for synergies between

each of these.

These three methods of communicating are specific to business to business

marketing and are aimed at large audiences. Each are important elements of

a business communications mix and should be understood for their individual

pros and cons. The key to using either of these methods is strategy and

planning.

2. Topics

• Advertising to business

• Why advertise

• Advertising strategy

• Public relations

• Publicity

• Public affairs

• Trade show marketing

• The importance of trade shows

• Setting trade show goals

• Show selection

• Show marketing strategy

• Other events






1. How would you go about setting goals for advertising, public relations

and trade shows?

2. Develop an advertising strategy to support these goals.

3. Compare and contrast the types of advertising commonly used.

4. Discuss what the complete marketing mix of the trade show experience

would include.

5. What is the difference between publicity and public affairs?


� Set goals for advertising.

� Compare and contrast the types of advertising commonly

used.

� Illustrate how subscription to a particular buying theory

influences advertising strategy.

� Describe the principles of sound public relations.

� Set goals for trade shows, and develop a trade show strategy.

� Illustrate the complete marketing mix of the trade show

experience.

� Illustrate how a trade show should be managed.


Chapter 12 – The One-to-One Media


This chapter covers the different types of one-to-one media and serves as a

bridge between advertising and personal selling. This section emphasises

media that does not provide face to face contact. Media such as mail, e-mail

and all other electronic forms were developed to enable communication from

one person directly with another. In other words, these communications are

the next closest thing to personal selling as they are not the same as mass

communication methods as previously discussed.

As with most marketing objectives, you must seek to integrate as many of

these channels as possible to ensure maximum benefits. Also consider the

evolution of technology and the many social media platforms available to us.

2. Topics

• Direct marketing

• Lists

• Direct mail

• Telemarketing

• The synergy of one-to-one media

• Marketing on the worldwideweb






1. What is direct marketing?

2. Plan and execute a direct mail campaign.

3. Outline the key elements of a telephone marketing programme.

4. Discuss the use of e-marketing in business marketing by

referring to websites, virtual communities and e-mail.


� Define direct marketing

o Four essentials in the definition

o Definitional gaps

� Discuss direct mail and telemarketing as forms of direct

marketing.

� Discuss the use of e-marketing in business marketing.

� Explain how the www has revolutionised direct mail.


Chapter 13 – Sales and Sales Management


Selling is an area in most businesses that demands most of a companies

marketing budget. Furthermore, personal selling represents the most effective

force in a business-to-business marketer’s marketing communication mix.

Through the sales force, the marketer links the firm’s total product and service

offering to the needs of the customers.

The chapter focuses on sales force management and the need for defining

objectives, structuring the sales force, sales force allocation and controlling

the sales force.

2. Topics

• Nature of professional selling

• Sales role in the organisation

• Sales strategies and customer relationships

• Organising the sales force

• Directing the sales force

• Evaluating performance



� Illustrate the strategic communication role of sales in

business marketing.

� Understand the different types of selling used for different

types of relationships.

� Identify and discuss the components of sales force

management.

� Discuss ways of evaluating performance.



Study: Dwyer & Tanner – Chapter 13.


1. Select the types of selling used for different types of relationships

and outline the sales strategy associated with each type of selling.

2. Illustrate the role of sales in business marketing.

3. Discuss the stages of relationship building.

4. Identify and discuss the components of sales force management.


Chapter 14 – Pricing and Negotiating for Value


Pricing needs to be thought of in a holistic and comprehensive way. This

chapter describes the framework for pricing decisions. As a business

marketer, you need to be able to identify some of today’s pricing pitfalls. In

addition you must understand the key interest groups involved in the pricing

decision. Price is a strategic variable that is influenced by many factors; costs,

demand, competitors, channel coordination and regulations.

This chapter covers the meaning of price in a business marketing context, the

pricing process, pricing policies for new and existing products and price

adjustments. It also discusses the concepts of break-even analysis, channel

margins, simple pro forma income statements, and margin. All these concepts

are very important for setting and managing pricing for products and services.

2. Topics

• The principles and principals of price

• The scissors factors of price

• The nature of competitive markets

• Issues in price management

• A pricing system



� Discuss the role of price in the cost/benefit calculations of

organisational buyers.

� Discuss supply & demand as factors of price.


� Discuss the key components of the business-to-business pricing

process.

� Discuss the nature of competitive markets.

� Discuss the following issues in price management:

o Channel pricing

o Product line pricing

o Bidding

o Negotiations

o Pricing system




1. Illustrate the arriving at the optimum price level for a product. First

describe the factors that complicate the pricing decision. Second

outline the approach that you would follow in pricing a business-to-

business product.

2. Discuss the following issues in price management:

o Channel pricing

o Product line pricing

o Bidding

o Negotiations.


Chapter 15 – Evaluating Marketing Efforts


This chapter covers the elements of a marketing control system and focuses

on a framework that will enable marketing management to convert strategy

goals into performance measures. It also addresses the control process and

implementation skills.

2. Topics

• The importance of evaluating marketing efforts

• Control Systems

• The Balanced Scorecard

• Using control systems





• Select appropriate tools of control for specific situations.

• Explain the use of the Balanced Scorecard.

• Discuss how control processes contribute to other

organisational processes such as reengineering and strategic

planning.



1. Describe the relationships between and among the four central

perspectives represented in the Balanced Scorecard: financial,

customer, internal business processes and learning and growth.

2. Select appropriate tools of control for specific situations.

3. Determine the central components of the marketing control

process.

4. Describe the role of the control system in formal marketing

planning.

5. Discuss how control processes contribute to other organisational

processes such as reengineering and strategic planning.


Chapter 16 - Customer Retention and Maximisation


This chapter addresses the managerial challenge of retaining valued

customers and how to classify different customer relationships. You need to

understand what makes a good customer and what it takes to truly satisfy

customers. Just because you have conquered and gained a customer through

your marketing and communication initiatives does not mean that your job as

a business marketer is done. Customer retention is critical to the long term

success of a company for it is cheaper to retain a customer than it is to find

and acquire a new one. Compare customer retention to a leaking bucket. In

order to keep the bucket full, you need to be adding water into the top all the

time at a faster rate than that which it is falling out the bottom. You also need

to be looking at ways to plug the holes so that you can reduce your filling

efforts at the top.

2. Topics

• Conquest and after marketing

• The nature of a customer

• Retention probability and customer value

• Customer relationship management

• Building relationships

• Running relationships

• Strengthening good relationships






1. Describe the profit implications over a range of customer

retention probabilities.

2. Describe the key avenues for bonding exchange parties in a

relationship.

3. Discuss three avenues for strengthening relationships.


� Graph the profit implication over a range of customer

retention probabilities and customer value.

� Describe the key avenues for bonding exchange parties in a

relationship.

� Discuss three avenues for building and strengthening

relationships.

� Discuss how to prepare and run a customer satisfaction

surveys.

learner guide for business-to-business marketing...

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