01-B2B-HNDTS-Intro-Oliva8-23-12for8-27-12.ppt

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Dr. Gary Lilien, Research Director, ISBM

Dr.Ralph Oliva, Executive Director, ISBM

www.isbm.org 814 863 2782

Business-to-Business MarketingIntroduction –

The Value-Delivery Framework

Business-to-Business MarketingMKTG 533.101 Fall, 2012

http://www.isbm.org/




What’s in it for you?

You’ll be equipped with language, skills and tools

enabling you to better understand, create, deliver

and profitably harvest value in Business Markets.

…understand the differences between B-to-B and

B-to-C markets, and how to ―coach‖ B-to-B

…make better decisions, better allocate resources,

and generate more profit in B-to-B situations…

…you’ll qualify for employment in B-to-B Marketing.



Marketing…

Marketing is the activity, set of institutions, and

processes for creating, communicating, delivering,

and exchanging offerings that have value forcustomers, clients, partners, and society at large

- From the American Marketing Association



Another view of ―Marketing‖

Marketing is the set of activities that acts to

maximize the value of the firm's assets, by

connecting them to the exact right demand…

Marketing Endeavors to connect

these to The ―Exact Right:‖

• Customers

• Markets

• Demand patterns

• Willingness to pay

• Value proposition alignment

• Propensity to loyalty

• Brand equity

• Learning, Etc.

CapitalAssets

People/IP

Assets

Brands

Brands

Brands

BrandsBrand

AssetsOther

Assets



Business-to-Business

Manufacturing/Tech Culture

Market to value chain

Technical proposition

Value in use, quantifiable

Small number of customers

Large-unit transactions

Process linkage

Complex buying sequence

Web of decision participants

Consumer

Marketing Culture

Market to end of chain

Perceptual proposition

Value in brand relationship

Large customer segments

Smaller-unit transactions

Transaction linkage

More direct purchase

Consumer decides



(C) 2012, ISBM - Penn State

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However:

The increasing power of distribution channels, the

impact of supply chain innovations, and

outsourcing strategies are blurring distinctions…

B-to-C

Consumer

B-to-CB-to-B


http://slidepdf.com/reader/full/01-b2b-hndts-intro-oliva8-23-12for8-27-12ppt 7/42(C) 2012, ISBM - Penn State

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Source: www.census.gov/econ/estats/



YOUR SPONSOR –

The Institute for the Study of Business Markets Associate Membership in ISBM—access to ISBM

programs, networks, etc

Direct connection to ISBM Research—driver of

course content

All materials required provided for you…

11/11/2013

8


See www.isbm.org for more!





ISBM Mission

Sin ce 1983...

…A global netwo rk of leading edge researchers and

practitioners. All B-to-B . Headquarters at Penn State

OUR MISSION:

Expand research and teaching in business-to-

business marketing and sales in academia…

Improve the practice of business-to-business

marketing and sales for member firms in industry…

9



PracticalAcademic Field

Research

100 Researchers

Leading-EdgeB-to-B Marketing

Practice

76 Member Firms

Value:

• New Knowledge/Insight

• Analytic Tools for B-to-B

• Courses/Professional Development

• Networking/Interchange

• Benchmarking

• More…

10

ISBM Fellows

B2B Leadership Board



ISBM Membership

Actuant

Arizona Chemical

Arkema

AT&T

Avery Dennison

Bayer MaterialScience

Cardinal Health

Carpenter Technology Corporation

Celanese

CenturyLink

Ciba Specialty Chemicals

Cisco Systems

Closure Systems International

Control Components Inc.

Corning

Cox Business

Daikin

DellDeloitte

Dow Chemical

Dresser Inc.

DuPont

Eastman Chemical

ExxonMobil Chemical

FlowserveGallup

GE

GlaxoSmithKline

Grainger

Gyro:

Heil Environmental

Henkel

IBM

Innography

Kennametal

Kimberly-Clark Professional

Kodak’s Graphics Comm.

Lilly

Lonza

LORD Corporation

Lubrizol

Momentive

Nalco

National StarchNew Pig

NIST/Manuf Ext Partnership

Panduit

Parker Hannifin

Philips Respironics

PolyOne

Porex

PPG Industries

Radiator Specialty Company

RGL Forensics

Rio Tinto Alcan

Rogers Corporation

Ryder

Sabert

SAP

Saint-Gobain Corporation

Sealed Air

Sherwin-WilliamsSiemens

Swagelok

Thilmany

Thomas & Betts

The Timken Company

Tyco

UBSUSS

Valspar

Weir

WESCO Distribution

Westinghouse Nuclear

Xylem

ZS Associates

76 Members

11/11/2013



• Building Networks: Friendships/

Communities of Learning and Practice

• Education: The largest suite of B-to-B

thought leaders/ courses/learning

• Research: At our core. Rigorous,relevant, applicable new knowledge,

tools and insight in B-to-B

―Your Resource for Everything B-to-B‖

ISBM:





You are invited to attendour entire meeting on

September 11-12

Class on Sept 12 will be

at the meeting at the

Nittany Lion Inn – Pleaseattend as much of the

Meeting as Possible!

Debrief the following

Monday 9/17/12

Welcome to ISBM Membership!



Understanding Value*

Data Management/Market Research

ComputingValue*

Personal

Competencies

Marketing

Leadership

Business

Acumen

DesigningMarket

Strategy*

MarketSegmentation*

Market

Planning

Targeting*

SalesIntegration

Positioning*

Value andPricing*

HarvestingValue

New OfferingDevelopment

Market OfferingsManagement

Channel ConflictManagement

MarketCommunications

Source: ISBM Research

on ―Kernel Capabilities:‖

agreed by academics and

practitioners as critical,

Dr. Alan Stines





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Course Objectives:

Understand key Differences/ Similarities:

B-to-B, B-to-C

Frameworks for understanding the

B-to-B Marketing Process

The language/taxonomy of value

Tools for Segmentation, Targeting,

Positioning****



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Overview/Frameworks for

Management: B-to-B Channel Strategy

Critical Keys to Execution – the

Marketing – Sales Interface

Insights from cases covering a variety

of B-to-B Marketing situations…

Course Objectives (Cont’d):



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Honor Code…Critical to OurProfession/Professional Life…

―We, the Smeal College of business community, aspire to the

highest ethical standards and will hold each other accountable to

them. We will not engage in any action that is improper, or that

creates the appearance of impropriety in our academic lives, and

we intend to hold this to the standard in our future careers.‖

―I/We ______________________ have neither given, utilized,

received, nor witnessed unauthorized data on this deliverable,

and have completed this work honestly and in accordance to

the professor’s guidelines.‖



From the Playbook…

In the first class, Monday, 27 August, we will review the presentation cases (seeSection E of this document).

By no later than EOD Tuesday, 28 August, email us the following information:

If you have formed a team, let us know the team members, and your team's

case preferences for presentation— 1st through 4th choices. (One email

from the team is sufficient.)

If you are not part of a team, let us know you are unattached, and also your

preference for cases—1st through 4th choices.

During the second class, Wednesday, 29 August we will provide preliminary

team formation and assignment to cases. You have until EOD Friday, 31

August, to either change teams (with approval of both teams) and/or to swapcase presentations with another team (again, with approval of both teams)

We will try to accommodate your preferences as best we can, given the

limited time available, to finalize assignments.



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From the Playbook

We will be covering the following cases this term:

5 Sept Account Pricing for the ABCOR 2000 (I)

7 Sept Commercializing the Kunst 1600 Vacuum Pump (I, P)

10 Sept Amscat Corporation (I)

24 Sept Convergys Case (I,P)

1 Oct Hercules Fasteners (I)

8 Oct Precise Software Solutions (I,P)

I= Insight /Brief Case P=Presentation/Full Case

Note: All students will complete a Peer Evaluation Form to providepeer assessments of contribution to team assignments.



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Handing in Assignments – Please…

Email to [email protected] and [email protected]

with copies to all participants…

(…So that a ―reply all‖ will get comments

and grades to everyone...)

File name: assignment_team.doc (ppt/pdf etc.)

Put your name(s) on/in everything

No assembly required – put pieces together

―Accept‖ changes, delete comments and be sure

track changes is off when sending

mailto:[email protected]






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Marketing Value - Delivery Framework

1. Build Value Understanding

2. Strategy Formulation

3. Design Customer Value

4. Communicate and Deliver Value

5. Life-Cycle Management

Segmentation,

Targeting,

Positioning

Business Marketing Practice…

…is essentially the management of a

process for understanding, creating

and profitably delivering value;

following a value-delivery framework

such as the one shown here…



Strategic Marketing Plan Components

Following the Value-Delivery Framework Process leads to the

outline and format below for a B-to-B marketing plan.

1. MarketSituation

• Marketoverview

• Customeranalysis

• Company &competitiveanalysis

• Value chainanalysis

• Keymarketingchallenges

2. PrepareSTP

Analysis

• Identify

macro-segments

• Define micro-

segments

• Select &profile target

segment

• Writepositioning

3. MarketingStrategy

• Marketingobjectives

• Marketinggoals

• Marketingstrategy grid

4. MarketingDecisions

• Productoffering

• Value pricing• Distribution

• IMC

• Sales force

• Customer

caremanagement

5. Implemen-tation

• Launchmarketing

plan• Action plans

to achievegoals

• Marketing

financials

• Tracking, risk

analysis &contingencyplans

6. ResourceNeeds &Rationale

ISBM Planning TemplateThanks to and © 2011, Dr. Bob Thomas, Georgetown

http://localhost/var/www/apps/conversion/B2BF11/StratMKTGPlanOutlineSanitizedSuggested7-6-11.ppt





Gold

Standard

Skills

GE: Process and skill areas summary

Collect, organize and

use information to set

strategic directions

Identify & group

customers by needs and

prioritize segments

Create & refine products &

services to optimize customer& business value

Launch customer

solutions into the

market. Organize,

execute, and measureagainst needs

Quantify opportunities and

economic value, align

territories and resources, set

targets, and pay for

performance

Inform and influence the

stakeholders, enhance

the reputation and brand

of GE, enable growth

Identify and adopt cutting

edge tools, processes, and

technologies

Drive GE’s leadership

in attractive market

segments and

innovate to expand

boundaries



© 2010 Kennametal Inc. l All rights reserved. l Proprietary and Confidential l 26

POWER Marketing

• Our ―POWER‖ process is tobecome ―Best in Class‖

compared to peers in B2B

marketing in all 7 dimensions

above by FY13

• Baseline Assessment

completed using an in-housebuilt model. On criteria ranging

from ―Aware‖ to ―Best in Class‖

we score slightly below average

in most areas.

• Actions assigned and

reviewed monthly

Measure &Improve

MarketSensing

StrategicPlanning

TargetOpportunities

DefineBusiness

Model

ProvideSuperior

ValueOffering

Communicate& Deliver

Drive Kennametal To The Top Of Its Peer Group

© 2010 Kennametal Inc. l All rights reserved. l Proprietary and Confidential l 26

Target

Opportunities



11/11/2013 DUPONT INTERNAL USE ONLY

27

SMP 2.0 Framework




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Understand the language and concept of Value*

Understand Industry, Market, Competitive Environment

– Market Research

Develop Understanding of Customer Needs/Value

- Customer Research

Diagnose Sources/Potential Sources of Value

Inside/Outside Firm

Value-Chain Analysis

Clarify/Focus: Organization Mission, Objectives, Goals





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Identifying Trends

Want to be electronic hub in living room

Political

Changes

Economic

Changes

Technological Changes

Social

Changes

Opportunity

―I skate to where the puck is going to be, not where it has been.‖

– Wayne Gretsky



11/11/2013 DUPONT INTERNAL USE ONLY

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Political Economic

• Political stability

• Intellectual property protection

• Trade regulations

• Tax policies

• Anti-trust laws

• Pricing regulations

• Macroeconomic conditions

• Economic growth rate

• Unemployment rate

• Inflation rate

• Interest rates

• Sources of growth

Social Technological

• Demographics

• Culture

• Gender roles

• Attitudes (health, lifestyles, etc.)

• Environmental consciousness

• Land use

• Climate change/pollution

• Recent technological developments

• Technology’s impact on product offering

• Impact on cost structure

• Rate of technological diffusion/acceptance• Mobile computing

• Shift to cloud computing

• Voice technologies that enable you to locate

call centers around the world

• Technology that enables you to locate

resources where they are least costly

Identifying Macro Trends (cont’d)

Ecological



Market Analysis

1.CompanyAnalysis

CoreMarketingChallenges

4.ChannelAnalysis

3.Competitor Analysis

2.CustomerAnalysis

Customer

Analysis

Competitor

Analysis

Channel/

Value Chain

Analysis

Company

Analysis




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• An influencer map

contains roles

connected by

relationships

• Typical roles are:

• Approver

• Buyer

• Gate-keeper

• Influencer

• Sponsor

• User

Input Policy

Input

Management

Requirements

Short-list

Vendor

Requirements

Commercial

RequirementsUser Requirements

Reccos.

Reccos.

Direction/

Counsel

Approval

Gate-Keeper

External

Influencer

Internal

InfluencerBuyer

Sponsor Approver

Users Procurement

The B-to-B Buyer:The ―Decision Making Unit‖ (DMU)




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Need

Information

search for

options

Evaluate

optionsDecide Purchase

Use and

feedback

New Task

NeedEvaluate

optionsDecide Purchase

Use and

feedback

Modify Rebuy

Need PurchaseUse and

feedback

Straight Rebuy

• Customers often follow a buying process, which describes the steps taken by theorganization to acquire products or services to meet needs in different buying situations

Buying Process Analysis




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Segmentation

Targeting Positioning

Synthesis of Segment Strategies

Our Primary

Concentration in this

course


The ―Core‖ of Marketing Strategy:




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35

Market segmentation is a decision process that helps you finda market-based long-term sustainable competitive advantageand make better marketing decisions…

By identifying one or more groups of customers whose needs(or response) within-groups are similar and whose needs (orresponse) between-groups are different . . .

And who can be targeted and reached efficiently and effectivelywith a focused marketing program…

To build a strong brand position that achieves organizationalobjectives and goals.

Segment

Target

Position

The ―Core‖ of Marketing Strategy:

Segmentation, Targeting, Positioning

Thanks to Dr. Bob Thomas, ISBM Fellow, Georgetown



Segmentation

Segments are DISCOVERED or DISCERNED, not ―made‖

Segmentation is intended to let us treat clusters of

customers DIFFERENTLY

• Offering

• Channel

• Sales approach

• Cost to serve, etc…



Conceptualize Market Structure for STP

Think of Markets as Hierarchies of Customers

Customer Categorization

Classify customers into logical

categories then target and allocate

resources – geography, productusage, customer size

Segments

Classify customers by their needs,

problems, attitudes, and behaviors

then select targets and allocate

resources

Segments of One

Customize offering to each customer

– costly, but ultimate marketing!

Mass Market Non-Segmentation

After studying segmentation ofmarket decide to treat every

customer the same

376/13/11Thanks to: Dr. Bob Thomas, Georgetown




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New Product/PortfolioManagement Processes

Value and Pricing Strategy*

Brand Strategy and Management





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Quality...

Warranty...

Service/Experience…

Safety,

Regulatory, Social...

Brand Name...

Product

Functionality...

Offering

Decisions

Ancillary

services &

accessories… Packaging...

There are several design dimensions that can be considered to

address individual product/service gaps/opportunities

3. Individual Offering Decisions




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Integrated Market Communications

Channel/Distribution Strategy*

Sales Management/Support




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1. Conduct Situation Analysis

2. Establish Communication Objectives/Strategies

3. Focus on Target Audience(s)

4. Build ―Behavioral Timeline ®

Plan‖

5. Develop Key Messages Based on Value Propositions/

Prepare Agency Brief

6. Select and Orchestrate Communications Tactics

7. Build Budget and Execution Plan

8. Measure Results – Build Database – Learn/Iterate

Integrated Strategic Communications Planning Framework:

The Behavioral Timeline® is a Registered Trademark of Dr. Robert Lauterborn, USC 416/13/11



TM


Manage Customer Relationships

Measure/Track Performance

Process Management/ContinuousImprovement

Education/Professional Development


Documents

01-B2B-HNDTS-Intro-Oliva8-23-12for8-27-12.ppt