Core performance indicator of prominent bus brand 1) Core competence 2) Quality

1A)Generic competitive strategies Cost Leadership-(OEM) lean manu practices & relaeconomy of scale
pursuit of cost reduction (exp, tight $, overhead control, avoidance of marginal customer acc)
cost minimisation in areas (R & D, service, sales force, advertising)
Differentiation -create p/service unique Design/brand image/tech/cust service/dealer network eg. IBM
Focus -conc particular buyer gp, segment of product line, or geog area with respect to a global industry
1B)Core Competence -collective learning/coordination exp&skills behind the firm's product lines
-CA differentiate fm competitors (POD) -how company manage its software(ppl)&hardware (mgt system)
superior skills employees--technologies mastered  unique technologies combinedglobal sourcing
market knowledge accumulated the values created from a customer’s perspective
seamless coordination btw design function, logistic coordination  relationship with vendor
Distinctive (X copies) Tangible-Intellectual property rights/exclusive licenses/statutory monopolies
Intangible-Strong brands/Superior leadership/Tacit knowledge &skills/Teamwork &spirit/Org culture/Bus
processes/Partnership
Non-distinctive Technical/Financial/Marketing capabilities, Explicit knowledge
penetrate diff product categories & mkts sustain (3Q) How rare core competence? How long will it take
competitors to develop the competence? Can source of advantage understood by competitors?
2) Quality dimensions (performance/features/conformance/reliability/durability/serviceability/ “fit&finish”)
Caterpillar quality perception control
1.conduct customer survey regularly which links customer perception to dimension of product quality
improvement and new product concept
2.calibrate product dimensions with customer satisfaction
Demonstrate quality (Invite trade shows/visits, displays, make actual product protocol, communicate
sincerity/attitude of sales rep)
Quality Movement Stages (consistently upgrade quality)
1 center on conformance to standards or success in meeting specifications (Vertical Integration)
2 emphasize quality>technical specialty & pursuit quality drive core bus processes (Seamless HR/prod/mkt/SCM)
3 examine firm’s quality performance relative to competitors & customer value perceptions-competing products
Value Benefit (Core, Add-on) + Sacrifices (Price, Acquisition costs, Operation costs)
4 Types of Business Product Lines
Proprietary or catalog products Standard products and services in company’s catalog
Custom-built products A customer designs its own product, gives specifications (OEM)
Custom-designed products
A customer subcontracts the design function according to customer’s instructions to your company(ODM)
Industrial services Provision of services (non/Branded services) (engineer inspection/certification services)
Four Dimensions of serving a Market
Customer function dimension: how to satisfy the needs of organizational buyers
Technological dimension: Is there a better way of performing the same function?
Customer segment dimension: How to serve different customer groups?
Value-added system dimension: Step into the value chain of your buyers
(Use) Channel structure accomplish desired marketing obj  selection of channel
• Numerous channel alternatives
• Marketing goals of potential channel members may be diff fm channel leader
• Existence of diff mkt segments often implies separate channels should employed concurrently
• channel structure specified, bus marketer must manage members to achieve prescribed goals
Criteria/Approaches of Direct channel sales office/ o2o mkting/ telemkting
1. customers are well defined and large in number . Demand? Reason?
2. customers insist on direct sales because of unique service requirements need tailor-made p/s
3. Sales/Customer involve/need extensive negotiations/ explanations/follow-up
4. Control of the selling job is necessary to ensure proper implementation of the total product package
and to guarantee a quick response to market conditions
5. Cost/benefits of establishing a sales office is justified Huge transaction cost
Criteria of Indirect channel (Distributor v/manu rep X title) automobile/fast moving consumer goods
Mkts fragmented &widely dispersed  Transaction amt vary Establish sales office X justified (sales, $)
Distributor General-line distributors trade extensive range of p/s DCH-automobile Specialists Focus on one
line or a few related lines Combination House Operates in two markets: industrial and cons products
(Role) serve customers more quickly & effectively, local mkt knwgereach customers in defined territories
serve customers via a group of field sales force that calls on customers externally and an inside group of
customer service representatives that receives telephone orders internallycarry inventories & provide all
supporting activities: credit, just-in-time delivery, order processing, and advicemay purchase material in
bulk, then shape, form, or assemble to user requirements/provide market information to manufacturer
Mana rep B2B Alibaba source of supply --General rules:
Assigned territory X too big/small  Stock X too much/little Watch capital constraints of a distributor
Provide more product variety to distributor Train distributor’s product knowledge
• A company’s products may not need that much after sale service
• The volume is small and the gross margin is small.
• A relatively small number of customers. These customers may be too far apart from one another
that don’t warrant the direct service of a distributor.
• Customers order relatively infrequently and allow fairly long lead times.
• For instance, airline agencies, real estate agencies, etc are examples in the commercial area.
Industrial agencies are in smaller scale when compared to distributors
Channel Design Process
Step 1 End-User Focus: Define Cust Segments
2: Identify and Prioritize Cust’ Channel Requir by Segment
3: Access Firm’s Capabilities to Meet Cust’ Requir
4: Benchmark Channel Offerings of Key Competitors
5: Create Channel Sol to Cust’ Latent Needs
6: Evaluate and Select Channel Options
Limitations: Availability of Good Intermediaries Traditional Channel PatternsProduct Characteristics
Company Financial Resources Competitive Strategies Geographic Dispersion of Customers
Size of market Customer needs (product information, customization, quality assurance, lot size,
assortment, availability, after sales services, Logistics) Government regulations (taxation, govt incentives)
Culture Cost and benefit analysis
Motivating Channel Members A partnership program Manu should make explicit statement of
policies in areas (product availability, technical support, training, pricing) assess all existing distributors as
to their capabilities for fulfilling their roles continually appraise appropriateness of policies guiding his or
her relationship with the channel members
Dealer Advisory Council Involves top mgt rep fm manu and fm channel members
exchange ideas / recognition/ identify &discuss mutual needs & pb/ overall improvemt of channel commun
Margins and Commission / Special event celebration/ Competition/ Complementary trip to another
country for travel/ Seminar
 Types of manufacturers
• OBM brand owner (e.g. Apple) responsible for all marketing activities
(R&D, product design, business and logistic planning, branding, target market identification, 4 Ps)
• ODM supplier of origin design product to OBM or customers
• OEM supplier of products to an OBM according to its specifications. For instance, FIH
Factors motivate firms to fall into their specific manufacturing category
Perceived bus risks Top mgt perceive bus risk in OBM too high (unpredictable mkt demand& secure OEM)
Perceived cost Costs of buying machineries, labor (predictable) VS marketing, branding, retail outlets
Expertise Top management may not have the marketing expertise to become an OBM
Can Apple (the iPhone OBM) switch its suppliers easily? NO
• All product specs are predetermined and tailored made for Apple that require a close coordination
and communication between the OBM and its OEMs.
• Even if Apple wants to find other suppliers, Apple has to spend huge efforts to locate and ensure all
things are ready between it switches to other suppliers
Env factor Derived demand relationship with consumer mkt Fluctuating demand seasonality factor
Stimulating demand anticipate future demand Price sensitivity (X only price) Suppliers’ pricing based on
ordering contracting system (quality of supplies, availability of supplies, market competition)
Demand elasticity order conditions (derived from the consumer market) place an order with supplier
Global Market perspective outsourcing
Relationship marketing Characteristic
All marketing activities directed establish, develop & maintain successful exchanges with customers:
Exchanges: Financial/ Services /Product knowledge/ Personal relationship

Buyers and sellers craft different types of relationships in response to:

a) market conditions
b) characteristics of purchase situation
Alternatives; supply market dynamism; purchase importance/complexity/ info exchange; operational linkage
Transactional Exchange Collaborative Exchange
• timely exchange of Commodity • Close information exchange, social, and
Products operational linkages,
• highly competitive market prices • Mutual commitments.
• Human factor is minimal • Human factors are very important
Emphasize on:
Trustworthiness/Commitment/Connection/ • Social exchange elements (Trust/commun)
Reliance/Understanding/Empathy • Operational linkage elements
JIT 6 sigma
Pre-criteria of delivering relationship mkting Zero inventory and quality improvement
• People (personal trust) minimization of waste
– Understand client’s (lean manufacturing)
organizational culture and the aims at improving a
client’s expectation. manufacturer’s
• Process (system trust) operational efficiency
– Should analyze the client’s by reducing its waste
process in great details. (transportation waste,
• Technology (system trust) lead time and inventory
– Should we buy new equipment level) close to zero
to fit in theirs? Cooperation commitment elemts SYSTEM TRUST
• Investment (capital requirement) • HARDWARE (a collaborative contract)
– How much money should we • SOFTWARE (working schedules, standards of
invest to build the relationship? expertise, rules and procedures)
• Return (Return on Investment (ROI)) Commitment Invest capitals/supplier pg/ trainings
– What is the ROI?
Factors for a supplier to adapt manufacturing philosophies acc to client’s requests
• Manu must generate a huge bargaining power on a supplier;
• A supplier must see economy of scale (vol) and profit potential when serving a particular customer;
• Maximum standardization and minimum product modification is required;
• Integration of manufacturing and computer systems between a supplier and a buyer is a must to
produce an operational linkage between a manufacturer and a supplier (automobile)
• Proactive rather than reactive in obtaining the manufacturer’s production schedule; &
• Two-way communication is important aiming at reducing conflict between the two parties.
Five Criteria for Evaluating Potential Mkt Segments (1>segmentation variables: product nature, mkt size)
Measurability/ Accessibility/ Substitutability/ Compatibility/ Responsiveness
Technological Environment Assessment
1. Product technology (Core Product Concepts) — a set of product ideas and concepts embodied in the
p/s dimension. Eg Is health concept a sustainable concept in the water market?
2. Process technology (How to Produce) —set of ideas or steps involved in the production of a product or
service. How to produce a product in term of economy of scale? How much to produce? Min size
Location of production facilities/ sources of suppliers/ warehousing/ size of production run
3. Management technology (How to Manage mkt) - mgt procedures associated with selling product.
macro Geo/Industry type Micro Vol purchase/Org size/Structure of procurement function: centralize? Buysi