A Career Path in Marketing For Fresh

MBA/PGDM Graduates
Opportunity for Regional Manager/V-P Sales and Marketing
International moves
from here onwards
Territory Sales Manager/Senior Manager - Sales/
Branch Manager

Area Sales Manager

Sales Career Path in Marketing
Key Account Manager
• Advancement based on
performance, NOT tenure
Assistant Sales Manager/Relationship
Manager • Responsibility is given from
Day 1 - opportunity to learn
MT/ST and demonstrate ability

• Handling of large teams;

multiple stakeholders
 Job Skills and Management Skills that you will acquire in Year 1

• Time : 12 months (Year 1 of Service)

• Designation: Management Trainee or Sales Trainee

• Location of Work : (Trade) Non Metro town

• Training during the first 12 months of service will focus on two critical areas :

job skills and management skills

• Job Skills : 1. Building sales knowledge and sales competencies

2. Business knowledge of the marketplace

• Management Skills : 1. Selling Skills 2. Client Management Skills

3. People Management Skills

1. Building sales knowledge and sales competencies to handle the basic

task associated with field sales/non-field sales

• Product portfolio, value added services, tariffs and rate charts,

personal selling, tele-calling, direct marketing, sales tie-up, sales

budgeting

• sales targets, sales reporting, trade discount structure, services

portfolio

• field visits and joint-calling with seniors to observe and learn on the job,

Induction training
2. Training familiarizes the Management Trainee/Sales Trainee with the
marketplace

• Sales structure (sales organization, reporting, and staffing)

• Product offerings

• Market place (customers, partners, franchisees, creditors, competitors,

and investors)
• Selling skills (seven steps in personal selling, product knowledge,

budgeting, demand forecasting, catchment area management,

market development)

• Build client management and selling skills

• Company Policies and Processes (Manual of Service Rules)

• Physical, Electronic, and Digital Distribution Channels

• Foundation knowledge of people management

 Job Skills and Management Skills that you will acquire in Years 2 and 3

• Time: 36 months (Years 2 and 3 of Service)

• Designation : Assistant Sales Manager/Relationship

Manager/Credit Officer (Executive Grade)

• Location of Work: (Trade) Metro Town

• Training during the first 24 -36 months of service will focus on two critical
areas : advanced job skills and sales management skills

• Advanced Job Skills: 1. Sales Territory Management

2. HR Skills
• Sales Management Skills: 1. Sales data interpretation and analysis
• Advanced Job Skills: sales territory management and HR skills

• At the end of 36 months of service you should be competent to

manage and direct a small team of reportees ( 5-10 sales executives)

• You will be required to assign annual targets, review sales reports,

and monitor sales performance

• Sales territories: more complex and larger

• In terms of geographical dispersion, steeper achievement targets,

generation of new customer leads, and monitoring reportee sales
performance)
• HR Skills

• Sales Communication Skills; Sales Correspondence Skills

• Basic Sales Negotiation skills: customer management,

grievance redressal, delighting preferred customers

• Team Coaching Skills: sales force motivation

• Foundation knowledge of Leadership skills: vision and

direction to grow the business

•Sales Management Skills

• Quantitative tools for market analysis

• Merchandising Procedures

• Handle multiple data sources from field sales and generate

meaningful interpretations from the same to aid decision making

• Report sales performance of reportees and present analysis in

prescribed sales formats to your immediate reporting officer

Job Skills and Management Skills that you will acquire in Years 4 and 5

• Time : 48-60 months (Years 4 and 5 of Service)

• Designation : Key Account Manager (Junior Management)

• Location of Work : (Trade) Metro Town

• Training during the next 48-60 months of service will focus on two

critical areas : advanced job skills and sales management skills

• Advanced Job Skills: 1. Key Account Management Skills

2. Building Analytical Skill (market development and

growing the business)
• At the end of your fifth year of service in an organization, you will enter
the first managerial grade and scale and will be promoted to a key
account manager

• Exposure to Key Account Management

• deepening the existing customer base, reaching out to satisfied and loyal
customers

• scaling up value-added products and services

• fertilizing new leads and achieving conversion rates

• growing the business to new segments

• This will require building analytical abilities
• preparing self for negotiation meetings with large key accounts
(Corporate, Institutional, Retail)
• Reporting responsibilities and accountability
• technically accurate and timely inputs to the next level of management
• sales forecasts, quarter on quarter performance
• market potential, new market opportunities
• competitor activity
• proactive business planning
• Presentation skills
• Advanced Negotiation Skills
• Foundation knowledge of Financial concepts: financial statement
analysis, generating a profit and loss statement
 Managerial Skill Acquisition Phase
• Time : 72 and 84 months (Years 6 and 7 of Service)

• Designation : Area Sales Manager

• Location of Work : State level sales responsibilities

• ASM function: handle the larger territory based accounts and

functions with more sales reportees to manage

•Planning and monitoring skills will become critical in this role

• last six months of year 5 will be dedicated to preparing the key

account manager to handle an ASM role
• Advanced coaching skills: preparing the next line of sales executive to
transit to managerial roles

• Demonstrating core values: applying ethical practices in business

• Logistics Management : planning for the distribution organization

(Company owned vs Franchisees), identification and selection of
commercial real estate

• negotiating rental agreements, distribution strategy, relocating office

space, closing unprofitable outlets, branches, offices
• Territory and Sales Planning
• growing the business (volume, value, product) in new segments and
seeding new offerings

• handling integrated marketing communications, sales budgets,

collection budgets

• accurate sales and collection forecasts, designing pricing,

distribution, and promotion strategies
• Building customer management skills

• retaining satisfied customers and acquiring new customers

• collection of customer feedback

• acting on customer feedback in a prompt and timely manner

• ‘firing’ unprofitable customers

B2B Marketing
 10 types of entities marketed

• Marketer are involved in marketing ten types of entities: goods, services, events,

experiences, persons, places, properties, organizations, information, and ideas

1. Goods: physical goods constitute the bulk of production and marketing efforts.

2. Services: the Indian business sector consists of a 60–40 services to goods mix.

3. Events: marketers promote time-based events such as trade shows, artistic performances,

and the IPL.

4. Experiences: a firm can create and market experiences such as amusement parks,

Wonder La, Innovative Film City, Walt Disney.

5. Persons: celebrity marketing is a major business: film stars regularly promote

products and services.

6. Places: cities, states, regions, and whole nations compete actively to attract tourists:

TTD, Tirupathi attracts 60 million pilgrims yearly.

7. Properties: intangible rights of ownership of either real property (real estate) or

financial property (stocks and bonds).

8. Organizations: actively work to build a strong, favorable, and unique image in the

minds of their target publics. B-schools, companies, govt. agencies

9. Information: marketed as a product; databases, learning resources, market research

reports, courseware; schools, universities, and others produce information and then

market it.

10. Ideas: products and services are platforms for delivering some idea or benefit
• Marketer?

• a marketer is a business organization seeking a response

(purchase) from another party called the prospect

• Market?

• a market as a collection of buyers and sellers who transact over

a particular product or product class

 TOPIC 1 B2B

Product classification and marketing mix essentials:

industrial products and business markets

• Key Customer Markets

• Consumer Markets

• consumer goods and services sold to individual or family buyers

(soft drinks, cosmetics, cars, clothing, personal care products)

• Business Markets

• Companies selling business goods and services to other

organizations only ( business buyers such as Maruti Suzuki,

Crompton Greaves, TVS India, Tata Motors, software companies,

government agencies, PSUs, LCV manf.)

• Global Markets

• companies operate in global markets for products and services

(Microsoft, IBM, Caterpillar, McDonald’s, Novartis) and adapt

their products/services to the country

• Governmental Markets

• companies selling industrial products to government

departments (BMTC, Power Grid, BHEL)

• Marketing differences between consumer marketing and business marketing

• intended use of the product: consumer products vs industrial products

• Intended consumer: retail (households, individual) buyers vs industrial buyers (for

manufacturing, operations, production requirements)

• the most valued product brands in the world market to both retail consumers and

business markets

• General Motors, IBM, Hewlett Packard, GE, Caterpillar, Cisco, Intel, Tata, SAIL,

Toyota Motors, DuPont, Maruti Suzuki, Hyundai Motors, FedEx etc: spend USD 60

million a day on industrial purchases to support operations

• two product categories: consumer and business

• consumer products classification: convenience, shopping, specialty, unsought

• business products classification: (i) Input Goods (ii) Equipment Goods (iii) Supply Goods

– function as inputs for finished goods

• consumer product categories are classified based on characteristics of consumer

buying behaviour

• convenience products: staples; extensive distribution (retail outlets); minimal purchase

effort; frequent purchase – food and beverage, personal care products, home care

products, fast food menus

• shopping products: products for which consumers make a considerable effort in

planning and making the purchase; infrequent purchase

• compare and evaluate brands, prices, product features, warranties

• consumer electronics, home appliances, furniture, footwear, ready-made apparel,

automobiles

• websites, visits to outlet, word of mouth

• speciality products: possess one or more unique product feature; buyers plan the

purchase and do not accept a substitute – Mont Blanc pen, Ray Ban sunglasses,

diamonds, designer suits and bags, luxury automobiles

• unsought products: products that customers do not seek for purchase or are unaware

• heavy promotion and brand awareness

• Encyclopaedia Britannia set of 32 volumes, high security safety systems for homes,

garden equipment, emergency medical services, auto repair

• business products classification: installations, accessory equipment, raw materials, component

parts, process materials, MRO supplies, business services

• TYPE 1 : INPUT GOODS (raw materials, semi-manufactured parts – spare parts, compressors,

motors, pumps, nuts, bolts, castings, forgings, and couplings, basic chemicals, plastics, iron and

steel, rubber and finished goods – computers, servers, tyres, tubes, rubber mats, steering wheels,

etc.)

• TYPE II – EQUIPMENT GOODS (support the production process – Installations and Accessory

Equipment: CNC machines, machine tools, production line, boilers, separators, conveyor belts,

blast furnaces, cranes, fork lifts, electric transformers, grinders)

• TYPE III – SUPPLY GOODS (maintenance, repair, operating materials – machine oils, lubricants,

paints)
• Why do business markets exist?

• business organizations do not only sell products and services to retail customers…

• each buys vast quantities from manufacturing organizations (B2B): raw materials,

manufactured components, plant and equipment, suppliers, and business services

• principles of marketing also apply to business marketers

• business to business marketing; industrial marketing; organizational buying

• business marketers serve the largest market of all: industrial markets

• …for raw materials, components, parts, installations, office supplies, equipment, and

business services

• some of the largest business customers or organizational buyers…

• General Motors, IBM, Hewlett Packard, GE, Caterpillar, Cisco, Intel, Tata, SAIL,

Toyota Motors, DuPont, Maruti Suzuki, Hyundai Motors, FedEx etc: spend USD 60

million a day on industrial purchases to support operations

• What is a business market?

• business market consists of all the organizations that acquire goods

and services used in the production of other products or services that

are sold, rented, or supplied to others

• organizational buying or ‘business buying is defined as the decision-

making process by which formal organizations establish the need for

purchased products and services and identify, evaluate, and choose

among alternative brands and suppliers

• What is business to business marketing?

• B2B marketing is defined as the process of marketing products and services that are

bought and sold between three types of organizations: commercial, government,

institutional

• industrial marketing: products and services bought and sold among commercial

organizations only – Distributors, OEM, User Industries, Retailers

• Six ‘Ps’ of business to business marketing

• P1 : production specifications

• P2: Commercial terms

• P3: methods of distribution

• P4: promotion

• P5 : internal process

• P6: people
• P1: application specific product specifications; quality standards;

production quantity per run (micron measures, viscosity, parts per million

dilution)

• P2: Pricing and commercial terms need to be at par with competitive

bidding and rolled in

• P3: distributor based vs direct delivery to customer premises (Ex Works):

Heavy commercial vehicles, pumps, motors

• P4: promotion through product seeding in target segments (sampling of

prospects with new products); channel and relationship management

• P5: cohesion and coordination between the manufacturing, marketing,

and distribution divisions – batch sizes, made-to-order, customized

repeat orders (batteries, earth moving machinery)

• P6: professionally trained design and production engineers, site

engineers, MRO technicians, and customized solutions teams

• Crompton Greaves

• Crompton Greaves is part of the Avantha Group

• Rs. 4200 crores (2009-10)

• India's largest private sector enterprise in the electrical engineering industry sector

• leadership position in a range of industrial products: power transmission and

industrial solutions

• power & industrial transformers, HT circuit breakers, LT & HT motors, DC motors,

traction motors, alternators/ generators, railway signalling equipments

• manufactures the widest range of Power & Distribution Transformers and Reactors

in the world

• 60kVA to 415MVA, 500kV Class

• five of the largest business buyer segments for industrial products: Power Utilities,

Process Industries, Railways, Mines, Electricity Boards, Industrial users

• ABB
• RAILWAYS
• JAIPRAKASH
• JINDAL POWER
• JINDAL STEEL
• BHUSHAN STEEL
• L&T
• SIEMENS
• TISCO
• TATA POWER
• KIRLOSKAR BROS
• HITACHI LTD
• Fenner India Ltd.

• JK Singhania Group Company

• Fenner (India) Limited is the largest manufacturer

• Industrial and Automotive V-Belts, Oilseals and Power Transmission Accessories in

India

• Kinetic Motor Company; Indofarm Tractors; L & T - John Deere; LML

Mahindra & Mahindra; Maruti Udyog; Punjab Tractors; Royal Enfield

• Poly-V Belt and V-Belt Drive in a Wire Drawing Machine

• Banded Belt drive for Gas Compressor Application

• Poly-V Belt Drive for Dual Motors Application on Textile Ring Frame
• Finolex Cables Ltd

• flagship company of the Finolex Group was established in 1958 in Pune

• India's largest and leading manufacturer of electrical and telecommunication cables with a turnover

in excess of Rs.16 Billion (about US $ 320 million)

• PVC insulated electrical wires and Flame Retardant Low Smoke electrical wires

• PVC insulated single core and multicore industrial flexible cables

• Rodent Repellent Multicore Flexible Cables

• PVC Insulated Winding Wires

• Power and Control Cables, High Voltage Power Cables (Upto 33 kV)

• Polyethylene Insulated Jelly Filled Telephone Cables

• every cable is manufactured using bright annealed electrolytic grade copper –

99.97% pure manufactured in house and is insulated with virgin grade PVC
• Market leader is polyvinylchloride (PVC) thermoplastic resin

• versatility of processing and application surpasses all other thermoplastic materials

• Suspension  PVC 

• FS-6701

• Rigid and Semi Rigid applications: pipes, conduits, hoses and tubes, wire and cable coating,

calendared films/sheets, extruded profiles cable/footwear compounds etc.

• Emulsion PVC

• FP-120

Leather, conveyor belting and tarpaulin coating

• Caterpillar

• champion among b2b marketers

• the world's largest maker of construction and mining equipment, diesel

and natural gas engines, and industrial gas turbines

• 300 machines products

• 500 engine products

• world's largest manufacturer of medium speed diesel engines and

high speed diesel engines, with ratings available from 54 to 13,600 hp
(40 to 10,000 kW)

• Shipping, trucks, construction and mining, petroleum machines

MACHINES
Backhoe Loaders

Compactors

Wheel Loaders

Paving Equipment

Hydraulic Excavators

Off-Highway
• GMMCO

• As Caterpillar’s largest dealer in India, GMMCO offers world-class

standards of sales, service and support for Cat products

• GMMCO is a part of the CK Birla group of companies

• 1967

• GMMCO network includes: over a 100 establishments across the

country, 29 warehouses that stock over 22,000 line items of inventory
worth over US$ 20 million

• supports over 7000 machines and 8500 engines across its territory
• GMMCO’s range of Caterpillar Machines and Engines being sold and serviced in India include:
• Back Hoe Loaders
• Hydraulic Excavators
• Front Shovels
• Motor Graders
• Dumpers
• Front-end Loaders
• Track-type Tractors
• Asphalt Pavers
• Soil Compactors
• Tandem Rollers
• A complete range of gensets and engines for marine, petroleum and industrial applications
• Escorts Group

• India's leading engineering conglomerates

• agri-machinery, construction & material handling equipment, railway

equipment and auto components

• pioneered farm mechanization in the country

• a comprehensive range of farm tractors

• 45 variants starting from 25 to 80 HP

• material handling and construction equipment manufacturer

• cranes, loaders, vibratory rollers and forklifts

• railway equipment

• brakes, couplers, shock absorbers, rail fastening systems,

composite brake blocks and vulcanized rubber parts

• auto components

• shock absorbers and telescopic front forks

FT HERO
FT CHAMPION

FT 45
FT 45 DT

FT 50 EPI
• Escorts Construction Equipment

Hydraulic Mobile
Cranes
Forklifts
Compactors
• JCB India Limited

• India’s largest manufacturer of Earthmoving and Construction equipment

• a fully owned subsidiary of JC Bamford Excavators Limited (U.K)

• Controlled by the Swaraj Paul Group of Companies

• JCB India Limited started operations in 1979

JCB India has the World’s largest Backhoe Loader manufacturing facility at

Ballabgarh in Haryana
Backhoe Compact
Loaders Excavators

Vibratory
Single Drum
Compactors Wheeled Loaders
• TYPE 1 : ENTERING GOODS/INPUT GOODS: classification, industrial application,

marketing mix parameters

• also called standard industrial products group of products

• standardized components and basic inputs to manufacture industrial products and

consumer durables

• LDPE granules, rotary shafts, brake linings, rubber composite, welding rods, ball

bearing, bearings, castings, forgings, couplings, armatures, wires, cables

• marketing mix parameters are standardised

 B2C AND (B2B)
Dell Inc.

B2C B2B

Government
Consumer
Individuals
Market & Businesses Institutions
Customers Households
• Departments
• Global
• Large Corporations
• Universities
• SMEs • Hospitals
• Laboratories

Products PC’s
Printers PC’s
Consumer Electronics Servers
Simple Service Routers
Agreements
 Business Product Classification

FOUNDATION GOODS/FIP & CAPITAL GOODS

ENTERING GOODS/INPUT GOODS/SIP
1. Raw Materials
(metal ore, wheat, wood)
2. Manufactured Materials & Parts
-(steel, wire, tyres, microchips)
1. Installations
(buildings, factories, computers, machine tools)
2. Accessory Equipment
-(light factory equipment – cranes, pulleys, belts)
(office equipment – desks, PCs, phones)

FACILITATING GOODS
1. Supplies
lubricants, paper, paint, spare parts
2. Business Services
(computer repair, annual maintenance services, mgmt consulting)
• Entering Goods: raw materials and parts used in manufacturing finished products

• metal ore: becomes wire or rods

• sheet steel: becomes door panel of car

• GE spends $ 900 million a year on purchase of steel

• Black & Decker: hand tools leader, spends $ 100 million a year on plastic parts

• Foundation goods (fixed investment items used in manufacturing): machines, buildings,

factories

• Facilitating goods : supplies and services that support manufacturing

• Three types of business buyers

• Commercial Enterprises: direct purchase from suppliers

• Government departments : direct purchase from manufacturers

• Institutions: universities, hospitals directly purchase

Commercial Enterprises

Manufacturing Wholesalers
Construction
Transportation Retailers
 Topic 2 B2B

Business Market Segmentation

• market segmentation in B2B markets

• business segment: a group of present or potential commercial, government, and

institutional enterprises with common characteristics

• consumer product companies: demographic, psychographic variables

• business 2 business firms

• manufacturing firms (business vendors): size and end-use of buyer/customer

• business buyers : purchasing strategies/decision making process

• two segmentation variables in business-to-business markets

• used by business vendors to segment business buyers

1. Macro level segmentation: done by Business Vendors of Business Buyers

(Organizational Characteristics)

• size, end usage rate of bulk buyers, location, purchase situation

2. Micro level segmentation: done by Business Vendors of Business Buyers (Buyer

Characteristics)

• Purchase department level process: preference for single or multiple

supplier/vendors

• 20% of the segment delivers 80 per cent of profits

• two stage approach to business segmentation

(1) vendor firms identify macro segments of buyers based on size and
usage

(2) Divide macro segments into micro segments

 Example
Medical Equipment Market in India: BPL, Du Pont, Phillips, Ranbaxy (X Ray, BP, Intensive Care)
Macro segmentation: Public hospitals, Private Healthcare

Sub segments (type of buyer) : Medical College Hospitals, Speciality, Super Speciality, Nursing
Homes, Clinics

Micro segmentation (hospital departments): purchasing process of decision making departments

Radiology, Oncology, Pathology, Renal, Cardio Vascular, Gastro, Hospital Administration

Advantages: Salespersons can tailor presentations to decision makers ensuring orders; advertising
messages can be precisely targeted
 MACROLEVEL SEGMENTATION/ORGANIZATIONAL
CHARACTERISTICS OF BUYERS BY VENDOR MANUFACTURERS

BUSINESS VENDOR ORGANIZATION

BUSINESS BUYERS 3. GEOGRAPHIC LOCATION OF

BUYERS 4. PURCHASING SITUATION
1. SIZE: small, medium,
large Prospects (new buy)
VENDOR: Design of sales territories
First Timers (< 3 months)
Design of sales force
2. USAGE RATE: heavy, Modified Rebuy (repeat buyers)
medium, low buying Distributor selection
requirements
• geographical concentration of buyers is based on regional demand

and end use applications: case study

• UCIL (the vendor): uses three segmentation variables to segment

buyer-users of LDPE resin (30,000 plastic converters firms)

• manufactures grades of LDPE resins – a thermoplastic raw material

supply LDPE granules in 50 kg paper bags to plastic converters

1. Geographic location variables

• West zone converters (40% of business)

• Northern zone converters (30% of business)

• Southern zone converters (20 % of business)

• Other zones: 10% of business

2. Application based variables (LDPE in three grades)

• LDPE: injection moulding, blow moulding, extrusion machinery

3. End-user market

• injection-moulded products (furniture, cup-plates, drinking glasses,

nylon gears, bushes, auto parts)

• blow-moulded products (bottles, hollow products)

• extrusion machinery and moulds products (films, pipes, blocks, tanks)

 Segmentation strategies for UCIL: LDPE resin product range

Segmentation Variables of UCIL Plastic Converter Segment

Geographical Locations West: 40 % of volume

Applications-based variables
End-use market
- automatic injection moulding
North: 30 % of volume
South: 20 % of volume
East: 10 % of volume
- Injection moulding products
- Blow moulding products
- Extrusion products
- hand-operated segments
- semi-automatic segments
segments
MICROLEVEL SEGMENTATION / BUYER CHARACTERISTICS BY
VENDOR MANUFACTURERS

BUSINESS VENDOR ORGANIZATION

1. STRUCTURE OF BUSINESS DECISION
MAKING UNIT OF BUYER
Intra-firm customers: departments
generating orders (single vs multiple)
2. PURCHASING STRATEGIES OF
BUYERS
Satisficers: single regular supplier
Optimizers: selection based on quotations
bids
 STUDENT PRESENTATION TOPICS
1. DELL
2. XEROX
3. BLACK & DECKER
4. DU PONT
5. FANUC
6. BHEL
7. BPL
8. L&T
9. HITACHI
10. KOMATSU
11. EXIDE
12. AMERICAN POWER CONVERSION (APC)
13. HINDUSTAN CONSTRUCTION COMPANY (HCC)
14. ABB
15. SULZER
16. CROMPTON GREAVES
ORGANIZATIONAL BUYING BEHAVIOUR
• companies do not only sell

• also buy vast quantities of raw materials, manufactured components,

plant and equipment, office supplies, and business services

• business market companies

• mining, manufacturing, construction, transportation, communication,

distribution

• ‘ the decision-making process by which business organizations

purchase products and services and identify, evaluate, and choose
from alternative offers made by suppliers’
• vendor firms submit offers to buyers: tender, proposal, bid

• typical purchase order for input/foundation/facilitating goods:

1. Production data: product, specifications, quantity, delivery schedule.

2. Commercial terms: pricing, credit terms, discounts.

3. Methods of distribution: transportation, warehousing, packing, storage

and handling.

4. After-sales service: delivery, installation, servicing and maintenance.

• Two simple concepts in organizational buying

1. Organizational buying behaviour

2. Decision Making Unit of the buyer

• organizational buying behaviour (OBB) : 7 steps or buy phases and

three buy classes or situations to complete a transaction

• OBB: sequential activities through which DMU departments proceed

when making purchasing decisions with vendors

1. Problem Recognition 2. Product specification 3. Supplier and

Product Search 4. Evaluation of Proposals 5.Supplier Selection
6. Evaluation of vendors 7. Performance Review
• buy phases

• describes three buying situations in making a purchase by the ‘purchase

department’

1. Straight Rebuy: the purchasing department reorders on a routine

basis from suppliers listed on an approved list of vendors.

2. Modified Rebuy: the buyer modifies product specifications, prices,

delivery, after sales service terms.

3. New Task: a purchaser buys a product or service for the first time
(product, price limits, delivery terms, service terms, order quantities) –
office buildings, new security systems, new equipment and machinery
with no depreciation costs
• Decision making unit or buying centre

• group of professionals involved in the purchasing process

• input goods, foundation goods, facilitating goods from vendors

• engineering departments (production, design, quality, testing, inventory, supply

chain, maintenance and after sales)

• marketing department

• international division

• buying centre personnel assume any one of the seven roles in the purchase

decision process
1. Initiators: start the process of purchase via purchase indent -
engineering department (design, R&D)

2. Users: use the product or service and define the product requirement
(production/manufacturing/factory)

3. Influencers: influence the buying decision by defining specifications of

product (marketing, supply chain managers, quality and testing)

4. Deciders: departments that decide on product requirements or

suppliers (new product development/R&D)
5. Approvers: departments that approve the purchase requirements of
deciders (finance, senior management)

6. Buyers: departments with formal authority to select vendors/arrange for

purchase terms (procurement and purchase department)

7. Gatekeepers: persons regulating the flow of information and access to the

buying centre (purchase manager)

- determine access of sales reps to members of the buying centre

- control budgets and commercial terms of the purchase order

- control specifications of the purchase order

- determine final vendor selection

 Company example to illustrate buying centre
Madura Coats, Century Textiles, and Arvind Mills sell non-woven disposable
surgical gowns to hospitals.

Buying centre: vice president of purchasing, the operating room administrator,

surgeons.

Vice President, Purchasing plays the role of the initiator by analyzing the need for
purchasing disposable vs reusable surgical gowns.

Sends recommendations for purchase to operating room administrator who

evaluates vendor products and commercial terms and then recommends one or
more preferred vendors (user and decider)
The administrator evaluates parameters of quality such as

absorbency, antiseptic quality, design, competitive cost (buyer).

Surgeons influence the decision by reporting their satisfaction with

a particular brand of gown.

 TOPIC 4

CUSTOMER RELATIONSHIP STRATEGIES FOR

BUSINESS MARKETS
• profitable relationships rather than commercial
transactions form the basis of vendor-buyer B2B
relationships
• relationship between vendors and buyers is
characterized by:

1.Customer retention

2. Performance: quality, delivery, cost

competitiveness

3. High importance to collaborative exchange

• Key strategies : vertical coordination of vendors
into a buyers supply chain and inventory systems
• collaborative exchange

• Pantaloons, Shopper’s Stop

• Pantaloons and Shopper’s Stop: two largest retail

companies in India
• closely integrated vendors supply (quality, volumes,

delivery schedules) with the buyer’s routine-order

purchase cycle
• vertical coordination between vendor supplies and

buyer’s inventory and production cycles

• achieved by software tool that efficiently manages

supply chain management systems

• software tool: Automatic Replenishment System

• objective: reduce inventory to match store level demand on a

daily basis; reduce cost of storing unsold stock; improve

operational margins

• software tracks stock levels at 200 stores and 50 product

categories of Pantaloons (Big Bazaar, Home Town, e-zone,

Central) and Stopper’s Stop across the country

• automatically triggers stock replenishment orders from the

central warehouse located in Mumbai as and when the stock

levels of product categories reach the re-order level

• chain repeats continuously

• off-takes from store (sale) – store stocks reach re-order level –

triggers replenishment of orders from warehouse to store –

stock orders from warehouse to vendors

• the software links the warehouse manager to store manager
and supplier to warehouse manager

• vertically coordinated vendor-buyer relationship ensures zero

stock out situation

• depleted store stocks are replenished within 24 hours of sale

• ensures that customers do not go away disappointed

• Shopper’s Stop has been able to reduce stock levels from 5 weeks
per store to 2 weeks per store

• Pantaloons improved on-time deliveries to stores of stock by

an accuracy of 3 weeks per store

• resulting in a reduction of warehousing and storage costs for unsold

stock by 15 %

• efficient management of stocks

• collaborative exchange

• buying firm seek out vendors

• few, highly qualified vendors

• complexity of purchase decision

• close and long term supply relationship for routine order

purchases

• buyers of manufacturing equipment, enterprise software,

and critical component parts

 ClSCO is a champion of collaborative exchange

• Cisco ensure is that the networking equipment and enterprise

software built is the preferred choice of its buyers

• Cisco is the world’s largest manufacturer and supplier of

networking equipment

• created a virtual organization for business buyers

• designed to provide efficiencies to the value chain processes of its

buyers (customers)

• uses the internet, intranet, and extranet applications designed to

link all business buyer DMUs directly
•the company invites the engineers stationed at the buyers premises
to solve technical problems using Cisco’s self help web-based
technical support pages and network configurator software

• user-friendly web support pages reduce down time at buyer’s

installations due to technical breakdowns

• allow customer’s engineers to operate in a real time trouble

shooting environment with instant solutions at hand

• http://www.cisco.com/cisco/web/support/index.html
IBM’s customer satisfaction strategy for collaborative B2B

relationships

IBM deploys a number of employees to serve a customer

organization better through assigning customer contact roles.

Specialists: The IBM client representative is the relationship owner;

project leader is the project owner; problem solver troubleshoots for
Customer (problem resolution owner)

Now consider an IBM technical manager assigned responsibility for

installing CRM software in a bank.
IBM the vendor builds a collaborative relationship with the buyer based
on:

1. Responsiveness of vendor in meeting buyer needs.

2. Product quality and technical expertise.

3. Delivery reliability.
 TOPIC 5

PRICING OF BUSINESS PRODUCTS

• discussion on price takes place between buyer and seller

• best commercial decision: win-win situation

• DMU or buying centre managers play a critical role in price

negotiations with vendor and purchase process

• pricing of B2B products are determined by two criteria

• commercial terms:

1.Pricing Strategies

2.Tendering Contracts and Bidding Contracts

• DMU managers and role in pricing and purchase
Buying Centre Role of Caterpillar for purchase of PanasonicToughBook HD
Laptops for Field Engineers
Role Illustration
Initiator General Manager (IT) proposes to replace all portable
computer systems on field
Influencer Corporate Financial Controller and Vice President,
Electronic Data Processing
Gatekeeper Purchasing and data processing departments analyze
company needs for ToughBooks and recommend
identified vendors
Decider Vice President, Administration & Facilities and Senior
Commercial Manager (Purchase) finalize vendors and
laptop configurations for purchase
Purchaser Senior Commercial Manager (Purchase) negotiates terms
of sales via negotiated pricing for specific agreements
User All engineer divisions use the computers
• B2B Pricing Strategy 1: Geographical Pricing (International)

• vendor negotiates prices with the buyer on the basis of

where customers are located

• negotiations on price are fixed based on the distance of location

of buyer (includes shipping and transportation costs)

• Indian pharmaceutical companies often use geographical

pricing to market products in to hospitals in Africa, Nepal,

Middle East, South East Asia

• Life saving drugs, OTC drugs, veterinary drugs

• Pricing Strategy 2: New Buy Situation- Negotiated Pricing Strategy

• business firms must decide to source components and parts or

manufacture in house

• new buy is a situation requiring the buyer to purchase of a

product for the first time for a new vendor

• Ashok Leyland’s is a champion of product sourcing and actively

encourages new vendors to approach the purchase department

• let us first understand the new buy situation and then the pricing
strategy
• DMU at Ashok Leyland

• Decider & Purchaser: Corporate Materials Department (CMD)

• Influencer/Gatekeeper: Supplier Quality Assurance Cell clear vendor

components (21 components outsourced) recommends vendor selection

1. Dash Board Instruments 2. Front / rear engine oil seals, water pump seal
3. Distributor, Diesel Injection Pump (Rotary FIP), fuel filter, timer 4.
Laminated safety glass for windshield & glasses for other cab surfaces 5.
Rubber mounted propeller shaft centre bearings (Hardy Spicer type) 6. Air
brake equipment (compressor, flick valve, spring brake chamber, slack
adjuster) 7.Water and oil pumps
• Key role of DMU: Vendor Development and Strategic Sourcing
• Task of DMU: identifies the vendors, rates the vendors based on feedback
received from quality, sends drawings / specifications, calls for quotes with
detailed break-up of operation-wise costs, and negotiates the price at which
the parts will be supplied
• Negotiated pricing commonly used in new buy situations

• pricing is set according to specific agreements between a

buyer and vendor

• complex, large volume sales

• sales and marketing managers of the vendor are required to

understand product and service needs accurately

• quantities ordered, prices, and delivery schedules are set by

the buyer annually

• Metals and Minerals Trading Corporation and National Mineral

Development Corporation negotiate iron ore price increases of

80-97% with Japanese and South Korean steel mills

• iron ore price: USD 71 per tonne

• iron fines price: USD 61 per tonne

• iron ore fines: a powdery material that is converted into pellets

before being used by blast furnaces (80 % increase)

• iron ore lumps: used directly in furnaces without much

processing (96.5% increase)

• MMTC and NMDC (vendors) have negotiated 5 year contracts

(2005) with Japanese steel mills and South Korea’s POSCO till

2010 under which the quantities and prices are decided

annually

• Exports to mills in Japan and POSCO would remain at last

year’s level of 4.27 million tonnes

• CT 1: Tendering

• CT 2: Bidding

• Tender is best suited for purchase of business products and

services in straight rebuy buying situation from preferred

vendors

• straight rebuy: buyer is not searching for new vendors and goes ahead
with a purchase contracts with selected vendors on a routine re-order
basis as per previous terms

• the buyers floats a tender to preferred vendors for routine re-order

• preferred vendor companies bid for the right to supply products and
services to a buyer for a fixed period of time

• a buyer sets up a tender for procurement of input goods, foundation

goods, and facilitating goods from selected vendor (preferred
suppliers)
• ensures that the tender is awarded to the best competing

vendor among who meets all vendor selection criteria of

cost, quality, technical expertise, delivery

• tender document is published in daily newspapers or post on

website

• preferred vendors prepare and submit tenders as per specifications

• e-tenders
• Bidding

• bidding is a procurement process by which buyer purchase business

products and services in a modified rebuy buying situation

• modified rebuy bids are open only to new vendors (tender: preferred
vendors)

• buyer uses this strategy to ensure that new terms with new vendors are
competitive

• opens bidding to any number of vendors of to evaluate price/quality

offerings
• bid: a proposal submitted by vendors to a buyer for the sale of

business goods; bid is submitted by a set deadline

• pricing strategy of buyer: discount pricing from vendor

• discount pricing : vendor reduces the price of a good or

service on the basis that a buyer is committed to buying in

bulk and on specified credit terms

• payment terms to buyer: vendor to offer price discount on

quantities delivered in return for quicker payment cycles

• 5 % discount for payment within 7 days

• 2.5 % discount for payment within 14 days

 Buying Situation of Buyer Pricing Strategy of Buyer

New Buy Negotiated pricing with Vendor

Straight Rebuy Tender pricing
Modified Rebuy Bid pricing

http://tenders.gov.in/innerpage.asp?choice=tc5&tid=del302700&work=1
 TOPIC 6

MANAGING BUSINESS MARKETING CHANNELS

 Motorola’s Distribution Strategy for Consumers in India: B2C Marketing

Innovative distribution strategy to reach rural consumers for mobile

phone sets as 72 % of rural consumer have good access to mobile
Networks but poor access to distribution: mobile phone dealers and
connectivity. To reach out to India’s rural consumer, Motorola has
forged alliances with rural retailers such as ITC eChoupal, DCM
groups Haryali Kisaan Bazaar, and Godrej’s Adhaar outlets for sales
and distribution of handsets. This distribution alliance offers
consumers direct, over-the-counter handsets through a direct
channel of distribution. Motorola covers 248 districts out of a total of
593 districts in India.
•marketing channel: set of intermediaries (distributors, agents,
salesforce) who distribute a product or service for the place of
production (vendor) to the place of consumption (buyer)

• two types of business marketing channels: direct & indirect

• Direct channels of distribution: vendor (manufacturer) makes,

distributes, and delivers input goods, foundation goods, and

facilitating goods to the buyer

• distribution and delivery of the purchase order is carried out by the
salesforce to buyer premises or electronically via online marketing
(B2B portal)
• indirect: vendor distributes products to the buyer via channel
intermediaries (industrial distributors and dealers) who sells or
handles the products and delivers to buyer

• direct channel or direct distribution in business marketing does not

use intermediaries

• indirect channel or indirect distribution uses at least one type of

intermediary
 B2B Marketing Channels
Manufacturer (Vendor)

DIRECT DISTRIBUTION INDIRECT DISTRIBUTION

Direct Sales Online Marketing Industrial Distributors Agents

BUYERS
• direct distribution strategy: bulk supplies of input goods/SIP

• distribution of goods from the point of production (vendor’s

factory) to the point of installation and use (buyer’s factory)

• vendor contracts a distributor to provide localized servicing \

facilities for goods and replacement parts and spares

• preferred mode for bulk : chemicals (naphtha, industrial acids,

pharmaceutical formulations, furnace oil, coal, sheet and rod

metal, wire, cables)

• non-bulk SIP: indirect channel of distribution of goods

• compressors, motors, pumps, nuts and bolts, equipment

components and parts, raw materials

• indirect channel: vendor-distributor-buyer

• buyer purchases non-bulk items in small lots from industrial

distributors

• distributor buys goods in bulk, stores, repacks, organizes

the loading and unloading of goods from vendor’s factory

and delivers to stockists and agents in smaller unit sizes

• types of intermediaries: indirect distribution

channel

• channel/organization involved in the distribution

process of the physical delivery of business goods from

the vendor to the buyers

• manufacturers’ agents (vendor)

• sales agent

• industrial distributor

• broker

• commission agent
• Manufacturers’ agents are a distribution channel

appointed by the seller (vendor) on a contract

basis

• role: represents one or more sellers and single or

multiple product lines

• operates on a commission basis for stock

consignment

• handles smaller lot orders and frequent re-supply

of stocks to buyer (OEM, institution, govt)

• sales agent: appointed by vendor for distribution and delivery of
business goods to the buyer

•represents sellers only

•commission basis for consignments

•long term selling contract with the principal

• manufacturers’ agent and sales agent channels have identical

roles in the indirect distribution process

• significant differences as well: in terms of scope and function

1. Manufacturers’ agents sell only a portion of the vendor’s output and limit activities
to a geographical sales territory.

2.Sales agents on the other hand sell the entire output of the vendor to the buyer and
are contracted to sell and distribute across larger sales territories.

3.Sales agents carry large volume stocks and inventories of the vendor as the agent
covers the entire market.

4.Manufacturers’ agent do not carry inventories and contract for smaller volume of
distribution.
 Three-tier system of indirect channel distribution:
industrial products

• Indian manufacturers (vendors) use a three tier selling and

distribution structure
Tier 1: Redistribution Stockists
Tier 2: Distributors (wholesalers)
Tier 3: retailers

123
 Hydraulic and Pneumatic Pumps
PAINTS (decorative & industrial)

• Vendor company operating on an all-India basis could

have between 4 and 8 redistribution stockists (RS)

• The RS will sell the product to between 10 and 45

wholesalers (distributors)

• RS and wholesalers will service between 250-500

industrial retailers throughout the country

124
 ASIAN PAINTS: distribution strategy B2C

• Asian Paints (AP) is the market leader in the Indian paint industry
(1000 cr company, Choksi, Dani, and Vakil promoter families)
• 38 percent share in decorative paints and 33 percent overall
(industrial + decorative) = industrial product distributed via retail
channels
• manufactures coatings and ancillaries: decoratives, production
paints, and heavy duty coatings

125
 ASIAN PAINTS: distribution strategy

• Goodlass Nerolac the nearest rival commands an overall

share of 14 percent only

• Asian Paints, Goodlass Nerolac, ICI, Berger, Shalimar

• 4,000 crore industry; 5 lakh tonnes in volume

126
 Asian Paints success stories

• a story of distribution excellence

• AP in the early years of its existence AP introduced a wide product

range in the decorative range in terms of colour and pack size : a
crucial factor for success

• Company leapfrogged and overtook all its competitors with colours and
customising the paint mixture for customers at retail outlets

127
 Asian Paints success story

• brands: Tractor, Apcolite, Utsav, Apex, and Ace well

entrenched
• small packing size proliferated the product depth:
competitors were supplying paints in 500 ml or larger
sizes
• Business opportunity: 200 ml, 100 ml, 50 ml packs
suited for paints jobs of different requirements
• 2000 distinct items of paints: none of which was
strictly a substitute for the other 128
 Competitor focus: bulk buyer segment

• key challenge: foreign companies and their

wholesalers distributors dominated the business
(1980-1990)
• J&N, ICI, Berger appointed a few traders as their
wholesale distributors and allowed them to
perpetuate a situation of a monopoly
• Each distributor was assigned a large territory and
was given the right to operate as an exclusive
channel of the company in the assigned territory 129
 Competitor focus

• Credit term liberal with credit outstanding for

supplies made year round
• Low motivation for traders to invest in distribution
infrastructure and did not extend to semi-urban and
rural areas
• Poor market development by restricting sales:
prevented entry of new companies and controlled the
paint business in cities
130
 Elements of AP’s distribution strategy

• By passed the bulk buyer segment dominated by

foreign companies and w/s distributors
• entered individual customer segments: semi-urban
and rural
• went retail: established direct contact with hundreds
of retail dealers in the late eighties
• Open-door dealer policy: continuous expansion of
dealer network by enlisting dealers in II and III tier
towns 131
 AP’s distribution strategy

• 1990: 7,000 dealers; 2000: 12,000 dealers; 250 new

dealers annually
• endorsed nation-wide marketing and distribution
strategy: all geographical zones, states, and
business territories versus established paint
business practice of marketing to limited territories
and in the vicinity of point of production

132
 Implementation process: the key to success

• Creation of vast network of retail dealers: 15,000

dealers in 3,500 towns ensures easy of availability
of products to end consumers in the decorative
paints segment

• Establishes a network of company depots: no

wholesalers distributors only company-operated
stock points supplying stocks to retailers
133
 Managing high cost distribution

• Created a marketing organization that matched its

distribution strategy
• 4 regional sales offices and 35 branch sales offices
effectively controlled 6 regional distribution centres
supplying stock to 55 company-operated depots
• 2000 strong product line and three pack sizes
resulted in a massive distribution task accompanied
by a high cost of service
134
 High cost distribution: a challenge

• Successful management of cost-service conflict in

distribution
• achieved through effective inventory management of
stock and strict credit controls on trade
• high level of service delivery – 28 days inventory
level versus industry’s 51 days; stock of finished
goods as a percent of net sales is 7 percent
compared to 14 percent of industry
135
 Topic 7

New Industrial Product Development

• a key fact that we learn from the PLC concept is that products do not
last forever

• value to consumer segments to diminish as products reach higher

levels of market penetration during the growth and maturity stages

• technological changes render products obsolete: cast iron pipes vs

PVC pipes; mechanical meters and gauges vs digital meters;
fractional distillation technology vs microencapsulation technology
crude oil and lubricants

• adoption life cycles shorter: product reach higher penetration levels

faster due to strong distribution, adopt sooner
• new industrial products are planned, development, and introduced into
the market

• new product development is a complex process guided by a six stage

product development process

1. Idea generation

2. Screening

3. Specifying features

4. Product development

5. Beta testing

6. Launch
 AUGMENTING:
CREATING CUSTOMER SATISFACTION

• Objective is to customize a product for a customer to exceed their

expectations

• the first step in product management is to understand that a product is

viewed by the customer in terms of augmentation benefits

• product can achieve a significant competitive advantage

• augmentation benefits are added at four levels that transform a product into a
superior value offering
1. Product level.
2. Technology platform.
3. Product line.
4. Product category.
• Case of Minolta office photocopiers

• product: Minolta EP 300 copier (direct competition to RICOH and Canon

copiers in India)

• technology: micro toning system of inkjet distribution used in copier ink

cartridges ensured even and economical use of ink (water proof and anti-
smudge)

• product line: EP line of value for money copiers

• product category: plain paper copiers and colour copiers

 PRODUCT MANAGEMENT TOOLS

• THE PRODUCT DEVELOPMENT PROCESS

• THE PRODUCT LIFE CYCLE

• PRODUCT PORTFOLIO MANAGEMENT TOOLS

• BCG MATRIX

• GE MATRIX
 PRODUCT LIFE-CYCLE: A NEW LOOK

Product Kill the

Develop- product
ment
Repeat
Find New
Introduction Growth Maturity Decline Life
R&D Uses
Cycle

Test Find New

Marketing Markets
 PRODUCT DEVELOPMENT PROCESS

EVALUATION

LAUNCH

BETA TESTING

PRODUCT DEVELOPMENT

SPECIFYING FEATURES

SCREENING AND PRELIMINARY

INVESTIGATION

IDEA GENERATION
• idea generation

• basic idea of new product and a constant flow of new ideas

• 3M and Caterpillar are market champions in new product idea

generation for the engine and machinery segment

• 3M launches over a 1000 new products a year ( current portfolio

is 50,000 products)

• approaches employees and customers

• screening and preliminary investigation stages : examine new product ideas
and factors that contribute to market success

• customers and suppliers work together to create value through new products
and augmented services

• achieved via quality function deployment: is a process of creating a product

that links customer needs to product form, features and benefits

• Eicher Motors India Limited is a champion of co-creating product benefits after

studying user behaviour

• maker of HCV trucks 2 to 12 tonnes gross vehicle weight

• reduced development time for truck by 30 per cent by mining customer data
on use and acceptance of a truck
• Eicher trucks transport over 80 per cent of live poultry in India each day

• India consumers over 5 million chicken and over 30 million eggs daily

• Namakal in TN is the poultry capital of India

• EM learned that chicken mortality is directly proportionate to the time of the day of
transport

• truck drivers transport poultry at night as the temperature is cool but are forced to
stop often due to driving fatigue and poor cabin design

• resulting in higher poultry mortality due to longer waiting in cramped cage

conditions

• EM re-worked chicken truck cabins with more comfort features

• anti-glare wind shields, softer seats, air conditioning, sleeper bunks

• buyers were willing to pay more for driver comfort

 TOPIC 8

SALES AND SALES MANAGEMENT

 THE KEY ROLES OF
SALESPEOPLE
1. THE SELLING FUNCTION

2. MANAGE CUSTOMER RELATIONSHIPS

3. GATHER INFORMATION
– From Customers
– From Competitors
– About Market Forces
 DETERMINING THE SALES STRATEGY
OPTION TO FIT YOUR CUSTOMER

1. SCRIPT-BASED SELLING—Used when all

customers’ needs are similar

2. NEEDS SATISFACTION SELLING—Identifying

buyers’ needs and selling to them

3. CONSULTATIVE SELLING—Bring specialized

expertise for a customized solution

4. STRATEGIC PARTNER SELLING—Seller-Customer

joint effort for developing product solutions
 STAGES IN RELATIONSHIP BUILDLING
Commitment

• Secure
Expansion
complete
commitment
Exploration • Generate from both
reorders companies Dissolution
Awareness • Set correct • Upgrade • Manage
expectations • Full-line change
• Ensure proper sell
• Limited
initial use
relationships
• Follow up
• Failure to
• Make personal
monitor
visits
competitors
• Handle
or industry
complaints
• Complacency
• Achieve
customer
satisfaction
 PARTNERSHIP COMMUNICATION:
FROM SINGLE LEVEL TO MULTI-LEVEL

Buying Company Before Partnering Selling Company

Production Engineering
Marketing Marketing
Purchasing Sales
Department Finance
Finance Purchasing Credit and
Salesperson
Accounting Agent
Billing
Shipping Shipping
& Receiving After Partnering & Receiving
Buying Company Selling Company
Production Engineering
Marketing Marketing
Purchasing Sales Purchasing
Finance Finance
Accounting Credit & Billing
Shipping Shipping
& Receiving & Receiving
BUYING AND SELLING TEAMS STREAMLINE MULTILEVEL
SELLING

Buying Company Selling Company

Vice President Vice President
Of Purchasing Of Sales

Director of Account
Purchasing Manager

Product
Engineer
Specialist
 TOPIC 9

Customer Retention
and Maximization
 THE CUSTOMER RELATIONSHIP CONTINUUM

Customer Relationships can be found at any level

Always-A-Share Highest Level

Customer Relationship

THE KEY FACTOR:

SWITCHING COSTS

The Direct and Indirect

costs a buyer will have
to pay to go to another
supplier

Lost-For-Good Lowest Level

Customers Relationship
 PAYOFFS FROM
LONG TERM CUSTOMER RELATIONSHIPS

• GROWS ADDITIONAL BUSINESS OPPORTUNITIES for new

products or increased purchases

• PREMIUM PRICES result from giving first-rate service and product

quality

• REDUCED SELLING COSTS from tighter coordination of

production and logistics

• ADDITIONAL REVENUES POSSIBLE from customers’ referrals and

joint sales calls with customers
 SOURCES OF COMPETITIVE ADVANTAGE

TO BUILD CUSTOMER LOYALTY,

DEVELOP A COMPETITIVE ADVANTAGE BY PROVIDING

1. Superior performance

2. Quality products and support as defined by the customer

3. Distinctive and reliable service

 A TOOL FOR CUSTOMER RETENTION:
CUSTOMER SATISFACTION SURVEYS

REQUIREMENTS FOR A USEFUL SURVEY:

1. CHOOSE MAIL OR TELEPHONE TO DO THE SURVEY

2. DETERMINE THE KIND OF INFORMATION YOU NEED

• Ascertain satisfaction with overall relationship
• Measure specific aspects of the relationship
• The unspoken concerns of customers
• Determine what will get measured regarding
customer expectations (The TERRA model works well)
• Having meaningful and measurable ratings and scores
 4-QUESTION SATISFACTION SURVEY
1 General overall
Satisfaction question

Process 1 Process 2 Process 3 Process 4 Process 5

(Parts handling) (Parts reps) (Service manuals (Technical Support) (etc.)

Attribute 1 Attribute 1 Attribute 1 Attribute 1 Attribute 1

Attribute 2 Attribute 2 Attribute 2 Attribute 2 Attribute 2
Attribute 3 Attribute 3 Attribute 3 Attribute 3 Attribute 3
2 Suggest Suggest Suggest Suggest Suggest
change for change for change for change for change for
improvement improvement improvement improvement improvement

Loyalty questions
3 • Willingness to recommend
4 • Repurchase intentions