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XIME / PGDM-B2B –RS–1118-February-2010
B2B Marketing
Managing The Product LinePGDM–B2B–RS–11
Amarnath Krishnaswamy
XIME / PGDM-B2B –RS–1118-February-2010
Plan for this Session (1)
• Core Competency– Identification– Exploitation
Not covered last session –
• Product Quality– Views– Total Quality
XIME / PGDM-B2B –RS–1118-February-2010
Plan for this Session (2)
• Product Policy– Types of Product Lines
– Product Support
– Defining the Product Market
– Assessing Opportunity
• Planning Strategy– Positioning
– Attributes
– Strategy Matrix
– Evaluation Matrix
– Developing a Strategy
XIME / PGDM-B2B –RS–1118-February-2010
Product Quality
XIME / PGDM-B2B –RS–1118-February-2010
Product Quality – Views
• Meaning can differ when viewed by:
– Within the organization
• Meeting the customers’ requirements
– Outside the organization
• Giving “value” to the customer
XIME / PGDM-B2B –RS–1118-February-2010
Total Quality Strategy
• Buyers evaluate suppliers on the basis of total offering
• There are 3 dimensions to this:
1. Product Quality• Specifications• Performance – Reliability, Durability etc
2. Support Quality• After-sales service
3. Delivery Quality• Delivery schedule• Response to changes in schedule
XIME / PGDM-B2B –RS–1118-February-2010
Product Policy
XIME / PGDM-B2B –RS–1118-February-2010
Some Definitions …
• Product
All the values & satisfaction that a customer gets – at the organization & personal levels
• Product Policy
Set of all decisions concerning the product lines (product & services) that the company offers.
XIME / PGDM-B2B –RS–1118-February-2010
Product Lines - Types
Four types
1. Proprietary or Catalogue Products
2. Custom-built Products
3. Custom-designed Products
4. Industrial Services
Standard products
Vanilla products, with add-ons as desired
Tailor-made
XIME / PGDM-B2B –RS–1118-February-2010
Product Support
• B2B marketing goes beyond supplying the customer with the product / service.
• It extends to:– Services that augment
• Technical services• Maintenance
• Problems in coordination may arise when these services are handled by separate departments – not by those in direct contact with the customer
XIME / PGDM-B2B –RS–1118-February-2010
Product-Market
• Definition should cover the ‘use’ of the product; not just the product
• Product-market should establish clearly the 2 dimensions:
– Customer Function: Define functions that would satisfy the needs of the user
– Technological: Define the various ways / methods by which the need is satisfied
XIME / PGDM-B2B –RS–1118-February-2010
Assessing Product-Market Opportunities
• Options for going international (Jagdish Sheth model)
Same DifferentProduct Configuration
Same Universal Product Market Segmentation
Different Product Segmentation
Specialty Segmentation
Market needs
• Work from the global market backwards, rather than taking a national product global
XIME / PGDM-B2B –RS–1118-February-2010
Product Strategy
XIME / PGDM-B2B –RS–1118-February-2010
Product Strategy - Tools
• Product strategy – a follow-up from defining product lines and identifying product markets (product policy)
• Two tools:1. Product Positioning
2. Product Evaluation Matrix
XIME / PGDM-B2B –RS–1118-February-2010
Product Positioning
• It’s the place the product “occupies” in the perceptions and preferences of the buyers vis-à-vis competition.
• B2B buyers’ perceptions & preferences usually focused on (attributes):– Price– Specifications– Quality
XIME / PGDM-B2B –RS–1118-February-2010
Product Positioning - Attributes
• Attributes, fall into 2 categories– Determinants: Important & Differentiating– Non-determinants: Important 0r Not important, Not differentiating
• Rate on a table
Note: A & B are competing brands
Determinant Non-determinant
Attribute 1 Attribute 2 Attribute 3 Attribute 4 Attribute 5
Important
Not Important
Non differentiating A = B
DifferentiatingA > B
A < B
XIME / PGDM-B2B –RS–1118-February-2010
Product Positioning - Strategy Matrix
• Having identified attributes of importance to buyer, and relative standing of brands, work on the attributes
Brand Difference
Increase Decrease Maintain
Importance
Increase
Decrease
Maintain
XIME / PGDM-B2B –RS–1118-February-2010
Product Positioning - Action
• If attribute is better than competition
• If attribute is inferior to competition
–Move from ND to D–Increase the difference
–Move from D to ND–Narrow the difference
XIME / PGDM-B2B –RS–1118-February-2010
Product Evaluation Matrix … (1)
• Developed by Yoram Wind & Henry Claycamp
• Integrates 3 measures:1. Sales
2. Market Share
3. Profitability
XIME / PGDM-B2B –RS–1118-February-2010
Product Evaluation Matrix … (2)
• The first step …
Company
SalesDecline Stable Growth
Industry Sales
Profit
Share
Below Target
TargetAbove Target
Below Target
TargetAbove Target
Below Target
TargetAbove Target
Growth
Dominant
Average
Marginal
Stable
Dominant
Average
Marginal
Decline
Dominant
Average
Marginal
• Plot the product attribute
XIME / PGDM-B2B –RS–1118-February-2010
Developing A Strategy
• 5 options for product / product line
OptionProduct Strategy
Marketing Strategy
1 Same Same
2 Same Change
3 Change Change
4 Drop
5 Add
XIME / PGDM-B2B –RS–1118-February-2010
Finally …
Go To Market
Cross your fingers and hope for the best!
Example: We need to up-date our strategy. The best bet is to go-to-market!
Peel An Onion
To conduct a layer-by-layer analysis of a complex problem and in the process, reduce yourself to tears!
XIME / PGDM-B2B –RS–1118-February-2010
Moving Forward
Next Session: PGDM-RS-12
Date: Tuesday, Feb 23, 2010
Subject: Managing Innovation
- Management of Innovation
- Technology Portfolio
- New Product Development
Process
XIME / PGDM-B2B –RS–1118-February-2010
