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Customer and segment management

B2B Marketing
Ujjwal Phadnis

The pace of the leader sets the race of the pack

TITAN Industries - Precision


Engineering Business
Leveraging precision engineering core competencies from watch
making, Titan initiated a PRECISION ENGINEERING DIVISION in 2002,
catering to global majors across industry verticals like aerospace,
automotive, oil & gas, engineering, hydraulics, solar and medical
instruments. With an investment of over $10 million, the setup has four
main business units
Precision Engineering Components & Sub-Assemblies (PECSA)
Machine Building & AutomationSolutions
Tooling Solutions
Electronic sub-assemblies
Precision Engineering Division is ISO 9001:2000 and ISO 14001:2004
certified. Additionally the unit catering to Aerospace segment is AS
9100B certified and the unit catering to automotive segment is TS
16949 certified.
The Division has demonstrated consistent quality and delivery
performance through several customer accolades like the ford Q1
award and the Continuous improvement award received from the CEO
of UTC, Louis Chenevert.

TITAN Industries - Precision


Engineering Business
Rationale
Leveraging Engineering capabilities
B2B business balances risk of B2C businesses

The Opportunity
India growing as a manufacturing base for precision
products
across industries
Cost pressures and offset requirements guarantee a
long term
opportunity
High cost of switching for customers
Large & growing market: The global market for

TITAN Industries - Current position:


3 segments 3 streams
Three segments
offer
Precision
Components
Dash board
Systems
Subsystems
Domestic and
International

Three streams

Market

Automotive
Aerospac
e

Automation Solutio

Medical
Domestic

TITAN Industries - Precision


Engineering Business
The Global Customers
Eaton, US
Hamilton Sunstrand, US
Microtechnica, Italy
Pratt & Witney, US
Schlumberger, US
Ford, UK
Bosch, India
Timken, India
Lucas, India
Visteon, US / India
Tyco Electronics, India Stanadyne, India
Tata Motors, India
Turbo Energy, India

Market selection and entry - B2B


Marketing
Marketing Research Brief - new market entry
Federal Express wants to launch its operation
in India.
Prepare a marketing research brief based on
the above focus based on the global case study

Market selection and entry - B2B


Marketing
Marketing Research
- Difference between
Consumer & Industrial
More reliance on secondary data, exploratory
research.
Understanding of technical factors
More quantitative rather than qualitative
Examples are market share analysis,
competitor analysis, sales forecasting, new
product acceptance and testing, business
trends.

Market selection and entry - B2B


Marketing
Marketing Research
Example : Estimate Market potential of electric
motors
Smaller motors used by farmers and rural
customers
Medium size by industrial customers and
Large size heavy commercial applications like
cement, paper, power generation.
Information utilized for allocation of :
sales people
advertising budget
Capital expenditure

Market selection and entry - B2B


Marketing
Marketing Research
Market share analysis - product categories ,
new technologies
Sales analysis Territory, segment wise.
Forecasting year , territory, segment
planning
Competitor analysis perception of quality,
pricing, service.
Benchmarking leadership in each category &
performance
New product acceptance and potential
Business trend studies of end user markets
Territory and segment potential

Market selection and entry - B2B


Marketing
Marketing Research process
Data types
Primary data , directly from end users
Secondary data from Directories and
handbooks
E-business portals macro economic data,
industry , sector database

Market selection and entry - B2B


Marketing
Marketing Research process
Research methodology
Observational , end users are not asked any
questions
Exploratory , insights into customer problems
Survey based , most frequently used
Experimental , cause and effect relationship.

Market selection and entry - B2B


Marketing
Marketing Research process
Research methodology , Survey based
structured direct interview
Unstructured direct interview

Indirect interviews , open discussions for


exploratory research
Research methodology , Sampling plan
Personal interviews
telephonic interviews
Mail surveys

Market selection and entry - B2B


Marketing
Marketing Research process
Data Collection and analysis
Data classification
Tabulation
Descriptive
Inferential
Finally Presenting the research findings and
report recommendations relevant to the
marketing research objectives.

Market selection and entry - B2B


Marketing
Marketing Intelligence System
Marketing Research
Secondary data
Internal information system
All the above
development

guides

Marketing

strategy

Selecting the right customer


segment in B2B Marketing
Marketing Segmentation B2B Marketing
Demographic
Industry
Company size
Geographical
Operating variables
Technology
Size , heavy, medium, light
Service requirements

Selecting the right customer


segment in B2B Marketing
Example Hindalco, an aluminium co. first

undertook macro segmentation based on end


user
markets,
automobiles,
residential,
beverage containers. It chose the residential
market it determined the best product
application, semi-finished material, building
components or aluminium mobile phones. In
the building components , it chose large
customers versus small and medium.
They then undertook micro-segmentation,
within the large customer building component
segment, there were three categories, those
who bought on price, who bought on service,
and those who bought on quality. Because,

Developing a marketing
database system
Organized collection of data of customers /
prospects
Action for lead generation, sale , customer
relationship
Example - Banking Industry , Complete customer
profile for sale of multiple products
Great asset for any marketing communication
Tracks customer history, past purchase patterns
Creating a Marketing data base, exhaustive process
Successful
only
when
integrated
with
marketing communication and sales

Developing the right management


strategies in B2B Marketing
Identifying competitive advantages through value
chain analysis
logistics, operations, marketing and sales,
procurement

support
functions,
HR,
Technology
development, administration
The Boston Consulting Group Model
Volume industry construction
Stalemated industry steel
Fragmented industry
- small and medium
sized business
Specialized industry - Industrial gears .

Nurturing customer relationships


in B2B Marketing
How do you nurture customer loyalty to your
product / brand/ company?
Loyalty to technology
Loyalty to a product class
Loyalty to a company
Loyalty to a person representing the
company.

Nurturing customer relationships


in B2B Marketing
How do you nurture customer loyalty to your
product / brand/ company?
Factors
describing
the
strength
of
relationships
Economic factors, Volume, value, product
importance
Character of relationship, level and no. of
contacts, vendors
Cooperation between marketer and buyer,
technical , product
Distance between the marketer and buyer,
social, technical, time, geographical.

Nurturing customer relationships


in B2B Marketing
How do you nurture customer loyalty to your
product / brand/ company?
Approaches to customer relationships
Locking the customer in
Informality
Non financial investments
Avoiding dependency
Unilateral efforts
Limited opportunity cost
Repeat transactions
Key account
Strategic partnership

Pricing in B2B Marketing


Economic value to customer pricing
economic benefits to customer
direct and indirect benefits
measure value of the benefits
place a value on services and additional
features
services are a separate profit centre
warranties and service contracts
bundled offers to lure customers

Pricing in B2B Marketing


Economic value to customer pricing
pricing establishes your leadership in the
marketplace
price is the measure of the value you extract
from the customer
value offered to customer needs to be
quantified
customized pricing to bundle or unbundle
benefits
pricing guides clear customer segmentation

Pricing in B2B Marketing


Pricing and product life cycles
Updated technology
Repositioning of existing product portfolio
Competition pricing changes
New competition entry
Government Policy / Taxation benefits
Pricing in recessionary times

Channel development in B2B


Marketing
Channel - Selection and development
Role of Distributors
Product knowledge
Exclusivity in geographies, products
Qualified to handle technical requirements
Investment in technical sales force
Represents the brand adequately
Challenge is to turn them into Business
Partners
Excellent channel partners can be effective
marketing tools in superior execution

Channel development in B2B


Marketing
Channel - Selection and development
Distributors
Return on Investment for distributor
Focus on Distributor marketing efforts
Support the channel to deliver on results
Multi channel management challenges
Create WIN-WIN Relationships
Teach them HOW TO FISH

Channel conflict in B2B


Marketing
Channel conflicts are part & parcel of the
dynamic environment
Multi channel conflict
Similar channel conflict
Direct v/s Distributor sales
Redistribution of geographies
New government policies
Change in business and marketing strategy
Unclear roles and responsibilities
New product launch
Change management

Channel conflict in B2B


Marketing
Managing Channel conflicts

Sensitive
business
and
negotiation
implementation
Challenge is to successfully handle the
change inline with policy
Diplomacy
Mediations from top management
Closing of business relationships
Some
amount
of
channel
constructive for business

conflict

is

Best practices in Industry


CATERPILLAR
CATERPILLAR

Construction
equipment
business
- Premium Product policy , reliability
Extensive and best-in-class dealership, focus
on training , servicing and motivating dealers
Superior service , replacement parts available
across the world, competitive advantage
requiring extensive investment
Superior parts management , high margin
business
Premium pricing , communicate leadership
Full line product portfolio , one stop shop
Financing the customer , to negate high