Case Analysis of Standard Machine Corporation

Group 1 Members Pooja Singh Sankalp Garg Santosh Kumar Diwakar Shilpa Mahapatra Suhail Nasir

Roll No 26NMP34 26NMP46 26NMP47 26NMP52 26NMP55

----------------------------------------B2B marketing by Prof. Vinod Kalia (MDI-NMP26 Batch)------------------------------------

Context and Challenges

Standard Machine Corporation a vendor to Occidental Aerospace. SMC bid for computerized milling machine at $429000

Competitive Bids - Kakuchis bid under $390000, Akita over $400k.

Joanne Braker, Purchasing manager of Occidental asked for a reduction in bid by $22000. SMC has a fixed-price policy- price reduction not approved by regional manager.
----------------------------------------B2B marketing by Prof. Vinod Kalia (MDI-NMP26 Batch)------------------------------------

Spectrum of Behavior
Lost-for-good model Committed to one vendor at one point of time. Clear intent indicated by Occidental to continue relationship with SMC. Potential for continued future business.

Relationship Marketing as against Transactional Marketing followed.

SMC v/s competitors

Switching Costs: Many advantages provided
by SMC which might not be offered by competing bids. Switching might work out expensive for Occidental (can gather more data to analyze). Risk/Exposure: SMC is tried and tested and serving for long. Quality and reliability not a guarantee from new vendors.
Innovators Advantages of SMC Training After sales service On time delivery Exigency support Proximity to buyer

Possible Actions
Assuming that SMC is inflexible in changing price:

Establish relationship marketing by:

Providing cost benefits of services already offered by SMC thorough installation, training, rushing spare part etc. Offer additional services such as increased warranty period (if applicable), deals on spare parts, free software upgradation, add-on milling cutters.

Sankalp can help elaborate

Questions ?

Thank You

----------------------------------------B2B marketing by Prof. Vinod Kalia (MDI-NMP26 Batch)------------------------------------