Week 1: What to make of B2B marketing?

Part 1: How is it different from B2C

Value Chain
- Example of Value chain: intel  dell  end user
Process:

Value Chain Marketing

- Doing marketing campaign to your customer's customers to influence them to choose a brand
and create loyalty and advocacy
- Activities, processes for understanding value, and creating, communicating, delivering, and
exchanging offerings that value for customers
- E.g. intel --> customer is computer brands (influence end consumers that computers with intel
are good computers --> computer brands like Dell have no choice but to buy from intel to
produce computers that consumers will want)

B2B Marketing
Business Model:
- promotes product from one business to another business
- E.g. Steel  Auto Manufacturer, Software  supermarket
Differences between B2B and B2C
1. Key Target Audience (biggest difference between B2B and B2C)
a. In B2C: decision making process can be decided by one individual
b. In B2B: decision making process is decided by more than one
i. Different managers have different goals and hence might have a conflict in
interest
ii. E.g. factory manager will want to keep the same suppliers to prevent mishaps
in the production but CFO may want to change supplier to cut cost
2. Value
a. Value of B2C smaller as compared to B2B
b. Cost is smaller as losing one customer might not be very significant as compared to
losing one company
Customer
- Separation of buyer and users
- Sales to resellers
o WHY?
o To know key users and stakeholders, a lot of practices is required (e.g. getting them
drinks) which a lot of MNCs cannot provide, hence reach out to 3 rd parties to do it
 o Alternative, in Asian context, there could be the existence of relations (e.g. relatives
in company) which makes it easier
- Sales to other companies
- Sales to institution
o Example of institution: NUS
o Long payment term due to the need to collate data (e.g. printer – how many copies
printed) and verification (is the number correct/true?), further consolidation is then
needed with all departments followed by finance department to approve and so on
o WHY do people still want to sell?
 Low risk of bankruptcy (black taps)
 Generally financially stable or supported by the government
- Few customers and niche markets
- Close relationship with customer
- Buyers are more rational (quality)
o Buy for 2 reasons:
 Anything that can help them save money or make money (includes time)
 Need not worry about the quality or quantity of product (a peaceful mind)
- Complex relationship
Example: Corporate bank provide multimillions loan to client organization
- Stakeholders involved: Finance Department, CFO, board members

Sales Process

1. Longer process cycle

a. Long process cycle from first contact till first confirmed commercial order
b. Prolong search required: research & identify customer, information search always
long
2. Stakeholder consideration
a. More thoughts about leadership & stakeholders
3. More complex, value selling & higher associated risk
a. More offering and services
 b. Complex decision-making process
c. Consultative selling and less price sensitive
d. Risk level is high
Professional Relationship
- Corporate buyer
o Adhere to key performance metrics
o Use formalized, lengthy policies and processes
o Qualification process
- Long term, value & needs based relationship
o Understanding their needs
o What’s important to the organization
o How we can best communicate with them
o What or who might influence their decision-making

Key Questions and wants of customer

Order to Cash (OTC)

The selling & delivering of materials and services
Steps:
1. Contract & order management
2. Order fulfillment
3. Delivery & Execution
4. Invoice management
5. Credit & Collection
6. Payment & Analytics

Process:
 - Companies do not like to engage in FoB (WHY?)
o No control on where the end product go to
 Customer can pick up the goods and ship to other country, turning them into
competitors
 However, when it touches down in the country, it will be harder to ship out
again without bringing any value to the country (there is a lot of regulation
regarding that)
- Payment term and shipment term are very important as compared to B2C
o Any fluctuation in prices can lead to customer not wanting to purchase anymore

Difference between B2B & B2B OTC:

- Rely less on packaging
- Order size is large & value is high
- Complex incoterms
- Open or secured payment term
- Regularity of orders
Basics of success of B2B sales:
- Product, service features and overall sales experiences
- Best practices:
o Know your customer
o Be honest & transparent
o Be relevant
o Establish an emotion connection to brand/people
o Collaboration

New Trend – Technology

 1. Decision making
Technology has changed the way customer make decision:
o More customers make their generic search
o Decision was made before they meet the salesperson
o Marketing automation has become more important
2. Customer experience
Technology also improve the B2B customer experiences:
o Real-time responsiveness and easy-to-use app
o Changing the process, customer tools, performance management and employee mind-
set
o Use of customer data to drive sales and deepen relationship

Five shifts in nutshell

Impact of COVID-19
- Self-serve and remote interactions
- Video and live chat
- B2B less linear – inside and outside
- More modular

B2B Marketer’s responsibilities

- Educating colleagues
- Ensuring seamless customer communication
- Being a brand ambassador
- Addressing customer’ needs
- Knowing your competitors and market
Week 2: The real world of B2B Marketing
Build a growing company’s structure and organization
1. Functional
Organized based on company’s key functions

2. Divisional
Organized based on company’s key products

3. Matrix
Organized based on cross-functional teams & functions
- Disadvantage:
o Lack of localization
o Face a lot of accountability problem (e.g. bad result in SG, everyone gets the blame)
 4. Flat
Organized based on self-management & a lack of managerial structure
- Benefit:
o Fast decision making

Commercial Organization
- Sales-Led
o Transaction-oriented
o Organization focuses on tactical sales/order taking
o Limited/no marketing
- Sales-Led with support Marketing
o Organization performs basic marketing activities to support tactical product and sales
needs
o Marketing is subordinate to sales
- Separate Marketing and Sales teams
o Organization performs most marketing activities
o Ownership is fragment across multiple functions
- Interactive Marketing and Sales
o Organization invests in consolidated, strategic marketing function
o Organization gives marketing responsibility to deliver need and long-term value
o Organization recognizes and values marketing & sales partnership
o Long-term: a lot of pipeline/visionary
- Market Focused
o Organization relies on marketing for strategy product development, pricing,
market/segment management etc.
o Organization builds customer-centric culture and processes

Companies with marketing culture have marketers who:

1. Find new customers to handover to sales
2. Create products to drive product development (innovation)
3. Create brand image
4. Value communication (internally & externally)
5. Build awareness

Marketing Culture
1. Marketing Knowledge
2. Attitudes
3. Behavior
Strong marketing culture produce:
o Higher levels of Marketing Performance (metrics of their marketing performance)
 Awareness, market share and customer satisfaction & loyalty
o Higher marketing profits
 Marketing ROI and ROS
o Superior financial performance
 Sales growth, operating profits, ROS, ROA, and ROC
Marketing Knowledge
1. Strategic Marketing [WHERE to lay your playing field (regions, industry etc.)  HOW are
you going to do so?]
a. Market/industry attractiveness and product life cycle
i. In B2B, sales get better as time goes by (life cycle)
ii. E.g. wire cable – track record of cable underground, longer it is, higher the
value is
b. Marketing Strategy
i. Standardization / differentiation?
ii. Value chain advantage?
c. Marketing Planning
i. Portfolio analysis/planning
ii. Competitive/market position
2. Market Analysis [Data required to put strategy in place  Know size, competitor, customer
portfolio, market dynamics that drive customers, trend]
a. Customer and competitor analysis
i. Customer needs/competitive position and benchmarking
b. Market Demand and segmentation
c. Market Research Tools and techniques
3. Market Profitability [Value]
a. Market-based pricing
i. Value pricing and product lifecycle pricing
b. Marketing metrics and profitability
i. Customer metrics and competitiveness metrics
c. Price-margin management
i. Margin management and price-volume relationship
ii. Cost structure
4. Marketing Mix Strategy [4Ps]
a. Product line strategy
b. Pricing strategy and product positioning
c. Promotion and place strategy
i. Push-pull
ii. Communication
iii. Direct/indirect strategy
Marketing Attitudes
1. Customer focus
2. Competitor orientation
3. Team approach
4. Pricing orientation
5. Profit orientation
Behavior
Sequence of activities for marketing organization

Marketing Roles:

Differentiated vs Standard
Major differences
1. Volume
2. Price
3. Organization structure
a. Highly skilled workers needed for specialty products
4. Packaging
5. Product lines
6. Sales/marketing manager capability
7. Produce in one dedicated plant vs formulated plant
8. Customer intimacy (Inside sales)
a. Inside sales: don’t have to go out to meet your customer / trying to do sales without
meeting customer
b. Only applicable to commodity sections
c. Outside sales required to expand business
9. Marketing mix, promotion is needed more in specialty
10. OTC – especially the payment term
11. R&D
a. A lot of investments and research for niche/specialty
12. Competitors – number of players
 a. Specialty products more sustainable for longer term (increases barriers to entry)
13. Sold on specification vs solution

Seven Drivers of differentiation

1. Unique product features and performance
2. Branding
3. Exceptional services
4. New technologies
5. Unique customer experiences
6. Exceptional skill or experience
7. Detailed information

Changes of organization
Week 3: Customer Segmentation
Why customer segmentation?
- Helps marketer allocate resources
- Different people have different needs and wants (they are not created equally) hence different
strategies are required to target them

Customer Segmentation in B2C:

Segmented by: Demographic Location Behavioural Psychographical

Examples Age, Education, Urban, Suburban, Relevant, Activities, Interest,

Religion, Rural Consistency, Benefit sought,
Occupation Frequency Attitudes, Values

Customer Segmentation in B2B:

- Uses a different approach from B2C. WHY?
o B2C usually buy what they want but B2B buy what they need
o It is a complex process (separate)
o Personal relationships play a huge role
 Might want to focus on buyer with good relationships or buyers that has been
buying for many years
- B2B Business need to first understand their goal (what they want to achieve) then proceed
to segmentation of customer
o Examples of choosing customers based on goal:
 Obtain certain amount of profit  look for customers who can pay you high
price
 Make a name  look for well-established customers (e.g. P&G, Coca-Cola)
- It can be: a) hard to define, b) Fuzzy and c) overlapping
o Certain customer can be into one or more group
o E.g. Company may be small now but will grow bigger in 2 years / buy multiple
products / different group of company buy with different needs

B2B Customer Strategy

Starts with the company strategic vision (present and long-term) and incorporate:
- “What” the customer needs
- “Who” are the customer groups
- “How” the customers’ needs are satisfied
Case Application – Readings
- Turning Point: they are the first company to go out there and understand truly what the
customers want (segment their needs and see if they can provide the needs) by conducting
market research & identifying customers
- Come up with a service level offering and offer it to their customers
Value Assessment – Customer Value
1. Outside - What is the customer needs?
a. Identify and select group of customers whose needs within-groups are similar and
whose needs between-groups are different
b. Examples:
i. Supply Chain (S)
ii. Commercial & Marketing (C)
iii. Technical & Product Performance (T)
iv. General & Relationship (G)

2. Inside – What is the lifetime value of the customer?

a. Revenue along the long period of time that the customer can bring to the company
b. Can be either Strategic or Commercial
Strategic
- Partnership and Innovation
o Innovative application development; record of innovative product launches
- Market Presence & Leadership
o Quality of promotions and recognition as a strong brand and market leader at the
regional level and across multiple applications
- Quality & sustainability consciousness
o Strong focus on product quality

Commercial
- Size
o Customer currently demand potential for growth
- Volatility in order behavior
o Order volatility
- Sales Margin
- Financial Reliability
o History of making timely payments, profitable & investing for the future
Application – Game/Exercise
Takeaway:
- A lot of companies these days focus purely on inside-out
- Need to also take into account outside-in (what the customer want)
o If customer focus on innovation, even if they are a small company that focus on local
scene, they may still be an important customer
- Important to match what they want and what you want, that way you can better allocate your
resources to achieve final goal
How to know customer needs?
- Refer to the 4 major category (supply chain, innovation etc.)
- Identify the metric that is important to you customer
- Identify driving force of the decision of purchase
- Quantify it through market survey, sales and value chain after obtaining the answer
- Don’t need to interview all, just use sampling (voice to represent the population)

Profile Segment – combining inside out and outside in

- Don't want anyone that is price sensitive hence cross out first column
- Don't want anyone with low margin hence cross out bottom row

- Looking at customer wants of technical support, if want to grow margin, focus on customers
that can bring about a high sales margin thereafter, think of strategy to grow them.
Week 4: Resources Allocation & Strategic Partnership
Dimension to consider
1. Competition
a. Products/service offered in target markets
b. Service levels (local vs. global players)
c. What is your competitors offering?
2. Customer base
a. Life-time value variation
b. 80/20 rule: do you still want to provide to everyone?
3. Internal Capabilities
a. Ability of organization to handle service level
b. Organizational readiness during ramp-up
c. Information flow between functions (e.g. roles & responsibilities of customer service)
d. Resources? Future/actual plan? Can you provide it?
Customer-Product/Service Segmentation
- To focus the organization and financial resources on the right, differentiating segments
o What if services/product the customer buy from you is not specific, how do you
segment them?
o How to bring into matrix? Customer Value:
- Usually based on differentiation level Strategic and commercial criteria,
- Helps design an offering so that customer perceive it the important needs of customers
in a distinct and valued way relative to competition
- Builds competitive advantage, value proposition and unique selling propositions
Customer Business Model Segmentation

- Characteristics:
o One or multiple customer segments can be in integrated business model
o Defined for customer-product combination

Application: Games/Exercise
Key Takeaways:
- Understand what the customer want / need and based on that, do benchmarking of competitor
- There is limited resources hence need to know what to prioritize

Value Curve
Differentiating Value Curves
- Ensure profitability of value curves by matching customer preferences with prices and cost-
to-serve
- Two types:
1. Standardized Services
a. Downgrade the rest and focus on providing customers the best in areas they
need/want (strengthen strengths)

Performance review:
talking about gaps /
improvements

Trend finders:
talk about strength
instead and further
strengthen it to better
differentiate yourself
(easier to strengthen
strength than work on
weaknesses

2. Differentiated Services
a. Want everything (improve on gaps)

- To ensure proper segmentation, both product priorities and customer value should be taken
into account
o Eliminate
 Values or services to be eliminated
 Less important factors
 Less competitive
o Reduce
 Values or services to be reduced below industry average
o Raise
 Values or services to be raised above competition strength finder
o Create
 Areas to be creates that the industry has never offered
 -

o Example: Singapore Airlines is good at this segmentation to come up with

differentiated service for their customers (different membership)

Strategic Business Partnership – Key Account Management (KAM)

Key Account
- Usually one-way traffic (advantageous to customer as they are big, strategic and are long-
term)
- Suppliers need to spend a lot of money to make them happy
o Need to manage carefully as you don’t want to lose them
- Have the leverage over suppliers
- Tactic they use:
o Find out what supplier is aiming for (e.g. volume, revenue)
o Centralize offerings
 E.g. Supplier is aiming for high volume, consolidate the volume of plant in
different locations into 1 and offer it
- Would want to go all the way out to satisfy Strategy Key Accounts
o E.g. In the event of factory catching fire, will want to give all remaining supply to
KA. For the others, declare force majeure to delay.
Elements to be consistently aligned
- 80/20 rule: large percentage of overall sales revenue typically comes from a small percentage
of large accounts
- These large accounts are major assets and should be managed like assets
- KAM designed for multi-functional account teams to follow a systematic approach will
deliver more and better results from/to these large accounts
Key Account Management (KAM)
- Key accounts need to be managed aggressively and competency to contribute to the company
long-term success
- Need coordination and cooperation as you are working with big companies
- Promoting KA as some people might not be interested in your KA
- Cultural learning is required to understand the needs of different companies at different
locations
Traditional Customer Planning vs KAM Planning:

Traditional Customer Planning KAM Planning

Sales-focused
Developed by selling organization
Discusses our revenue goals and objectives
Developed to meet our quota
Focuses on selling our product line
Customer-focused
Developed by cross-functional team
Discusses how to help account meet its’
business objectives
Developed to meet account’s business needs
Determines solutions the account needs

Process:

- Identifies our current relationship position

- Defines desired position
 - Develops strategy and actions plans
- Creates common language for account relationship strategies
*For cross-national, the problem might be that customer (e.g. P&G) may be important to you, but not
to those in other regions (e.g. India). Hence, need to convince them to prioritize these KA

Defining Criteria for KA:

1. Financials
a. Sales Revenue
b. Sales Margin
2. Relationship
a. Current Position
b. Future
3. Strategic Fit
a. Business Strategy
b. Culture

Customer Value
- By maximizing our value to the customer and helping them achieve their business success, we
build greater customer loyalty, which lead to higher revenue and profitability for us
- Customer Value  Customer Loyalty  Money

Role of Key Account Manager

1. Understand why customer buy from us vs others
2. Act as strategic orchestrator, harnessing company account team resources for success
3. Be the business/solution consultant to defined global key account
4. Champion Customer issues as the acknowledged long-term partnership
 5. Provide company with the competitive advantage thru the depth of relationship and Customer
knowledge
6. Deliver the value to Customer and create value for company
7. Influence to build Customer loyalty
8. Provide industry, Customer, and application expertise to setting successful global account
plans

Strategies
1) Strong KAM Strategy – Begin with the End in Mind
1. Focuses on goals important to Strategic Players of customer across regions
2. Based on customer’s opportunities driven by current trends where our strengths can add
value for the key account
3. Prioritize and focus our resources globally
4. Neutralizes impact of Anti-sponsors and our most significant vulnerability
Some questions to ask:
- What do you want to achieve in the future?
- What is the big picture? (Strategic player might be small now but what about the future?)
- How to align with colleagues in other countries when allocating resources globally?
- How to get support? Not handling by yourself, a lot of support is required across country and
departments

2) Offering Strategy

Takeaway:
Key accounts need to be managed aggressively and competency to contribute to the company long
term success
- Need coordination and cooperation as you are working with big companies  promoting it as
some people might not be interested in your KA as well
- Cultural learning required to understand the needs of different companies at different location
Week 5: Problem of Selling – Salesforce Effectiveness and Value Selling
Effective Selling
- It is tied to:
o Timing
o Patience
o Persistence and
o Sensitivity to the situation

Questions to ask when allocating salesforce:

- Market size
- Growth rate
- Trend
- Market share (Share of wallet)
Sales report don't tell u everything --> don't based your analysis on this only. Need to consider the
other important questions as well

Sales Management Process

1. Understand commercial marketing strategy
Define sales task:
o Customers
o Featured products and services
o Activities
o Resources to support team

Customer they need to look for, differentiated products to offer and sales activities they can
involve themselves with
o e.g. lead generation - projects, cold-calling, after-sales service (follow up),
negotiation, biddings, prioritization of selling, analyzing client needs, handling
complaints, information, reporting, make appointment

2. Create structure for sales team

o number of sales, organization, and measurement

3. Deploy sales team

o forecast revenue
o create territory and quota
o Measurement deployment

4. Create a compensation program

o Fixed and Variable
 Variable can be commission or year-end reward
5. Measure your performance as sales leader

Why aren’t sales reps calling on customers?

 - May require tools to call customers (e.g. training / promotional tools to be provided to them)
- Lack of sales and planning schemes
- Schedule issues (not fit timing to call)

Salesforce Effectiveness
Measuring Results
1. Inputs vs Outputs

o Only measure what matters the most:

 Ensure reps understand their evaluation
 Set performance standard
o High performance sales team


2. Customer Relationship
Own 3 key skillsets in this capability:
a. Political acumen to assess appropriate seniority / number / frequency of contacts
i. Understand structure and culture of the customer (what is the political
culture), find out how they make decision
b. A set of interpersonal & networking skills to initiate and develop contacts into loyal
customer relationship
c. Regular use of all internal resources to build multilevel, many-to-many relationships
as a barrier to competitive entry
i. Relationship levels need to be multi-level, not one-to-one
Driving Principles
1. Focus on customer
a. Understand the customer buying cycles rather than your sales cycle
b. What is valuable to the customers
 c. What’s in it for the customer?
d. Building the trust – aware of customer state of mind, situation and needs
Buying cycle:

Capability statement – talk more about benefits, less on features:

Things to offer (benefits) are usually either:

Increasing Decreasing
Product quality Cost of sales
Service quality Error rate
Speed of efficiency Price of supplies
Advertising effectiveness Customer complaints
Office productivity Maintenance problems
Employee benefits coverage Cost of capital
ROI Number of suppliers
Profitability
Shareholder equity

2. Earn the right to advance

o In each step of the buying process
o Customers’ concerns must be addressed at each step
o Aware of customer’s needs and problem
o Collaborate with customer to make sure that it is what they really want and that you
have the solution the customer can appreciate. So that you can advance to the next
step to work on the implementation. (ACTION)
High-Gain Questions
 a. Evaluate or Analyze (open-ended question  come up with statements to evaluate or
analyse
i. How would you evaluate success?
ii. 3 most difficult thing you face?
iii. What caused you in a loss of opportunity?
b. Speculate (Things that would not happen but if they can, what would they include?)
i. if you could organize this operation in any way you desire, how would you
do it?
ii. suppose you have no financial constraint in the next two years, how would
you do with....
iii. suppose you could write an idea specification for this product, what would u
include?
c. Express Feeling
i. how do you feel about the trend towards certain things in your company?
(e.g. trend towards sustainability)
ii. how do people in your company feel about the company's goal to achieve
iii. how does top management feels about the problems you have been describing
in relation to the project?
3. Persuade through involvement
a. Persuasion is the process of involving the customer – not giving dazzling sales pitch
b. Getting information and giving the customer a choice as important as giving
information
c. Good listening skills; talk less and listen more
d. Opposition is a sign of involvement
e. Information need to be important to your customer as well (don’t share useless
things)
Presenting Value Benefits
- Features, Advantages and benefits
- E.g. we have 3 highly skilled technicians, because of that, you’d get a quick response to
breakdown / we can give you the one-hour response time that is urgent to you
Value Proposition
- Value benefit proposition must:
o Respond to the information found
o Address the customers’ requirement or
o Provide customer with a new view point

Closing guidelines
- Use a direct close: call to action for the next action
o Conclusive question – yes, pending, no
- Close with confident
- Do not be afraid of silence
- Affirm the decision to buy