Business to Business Marketing.Pdf
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BUSINESS TO BUSINESS MARKETING This page intentionally left blank BUSINESS TO BUSINESS MARKETING U.C. Mathur Professor ofManagement Studies Amity University Noida Formerly, CEO, World Digital, CEO, Modi Telecom and CEO, Escorts Telecom PUBLISHING FOR ONE WORLD NEW AGE INTERNATIONAL (P) LIMITED, PUBLISHERS New Delhi· Bangalore • Chennai • Cochin • Guwahati • Hyderabad Jalandhar • Kolkata • Lucknow • Mumbai • Ranchi Visit us at www.newagepublishers.com Copyright © 2008, New Age International (P) Ltd., Publishers Published by New Age International (P) Ltd., Publishers All rights reserved. No part of this ebook may be reproduced in any form, by photostat, microfilm, xerography, or any other means, or incorporated into any information retrieval system, electronic or mechanical, without the written permission of the publisher. All inquiries should be emailed to [email protected] ISBN (13) : 978-81-224-2939-8 PUBLISHING FOR ONE WORLD NEW AGE INTERNATIONAL (P) LIMITED, PUBLISHERS 4835/24, Ansari Road, Daryaganj, New Delhi - 110002 Visit us at www.newagepublishers.com Preface Most persons in the country are buyers of consumer products, both the Fast Moving Consumer Durables and Consumer Durables. Besides, there is a large chunk of business of intermediary products that is the components, subassemblies and the raw materials needed by the manufacturers of FMCG and Consumer Durable products. However, the marketing of these products has been neglected to some extent as professional training has come about for B-to-B marketing only recently. This book is dedicated to the marketing of such products. Indian market has matured for being able to absorb the latest technology products as also can supply some of such products in the Indian markets and for exports as well. Most significant example is that of computer software promoted in India, is the latest State of the Art product and it comes to India the same time it goes anywhere else. Software development has come to centre stage in country’s business horizon. The development in software technology and the trained manpower strength in this area in the country are unsurpassed by most nations. In fact, Indian states like Karnataka, Andhra Pradesh are vying with each other for supremacy in software development. All this augurs well for Indian business and is a big plus for the country. Competition from multinational firms, more focused management, better-trained managers have become the norm rather than an exception. These new forces have had an impact on the most purposeful of all the management disciplines, marketing. A person can have the best of the manpower, technology, and finance but if he does not have marketing strengths he can just forget about any business today. It is not that these other functions of business are any less important; marketing can be considered as more equal among equals. Hence, the need for focused thrust in this key result area of Marketing Management, the B-to-B Marketing Management, is of paramount importance today. (vi) It is said that change is the only constant thing in the world and it is true for marketing, as well. As the number of marketing firms increase (for a product) so do the diversities in pricing, distribution channels, advertising and promotion techniques, and one can never be sure that he knows whatever there is to know in the field of marketing. The product, technology, competition, distribution channels, ways of advertising and promotion are all in a state of continuous flux. Hence the “How To Know And Where To Find” becomes extremely important to the students and the practitioners of marketing management. The focus of all these activities, the buyer, is at once thrilled to the core to witness an unprecedented growth of competitive products (see the number of colour TV sets in the market today) as also he is confused about a lot of things; which product to buy, what price is the right price or is he being cheated even by the known brands. Can a marketer take these situations as opportunities? If yes, then what are the parameters for him to look at, where can he get the best solutions to his typical situations? (It should be understood that each marketer’s situation is always unique). Questions like these and many more need to be answered and this book makes an attempt at doing just that. Internet, information technology, cellular phones, satellite channels for television and fast travel has made the earth a smaller place today, but for the political fissures, which distance one nation from the other. The world has been divided by religions so far and yet the economic divide has been the most significant one from the twentieth century as it has produced a world of haves and have nots. Even then the developing nations like India offer one of the biggest markets for the marketers of the world. For this reason alone, the developed nations have to forget their political beliefs and look for markets where they can find them. Chinese political philosophy and system is totally at variance with the political system of the west and yet the USA is ignoring the political rough edges to tap the large Chinese market and vice versa. When India was on the point of foreign exchange bankruptcy in 1991, the then government of the country with Mr. Manmohan Singh as the Finance Minister had gone to the World Bank and the IMF for obtaining loans. The West had already woken up to the huge market potential of India and the world finance bodies sought the opening of the markets of India, the second largest country on the basis of population and the largest democracy in the world, for the western firms before the loans could be considered. This resulted in the following major changes in the government’s business policy- (vii) 1. De-licensing for manufacture of most products 2. Easy entry of foreign firms in the country with their investments and technology 3. Lowering of customs duty on imports 4. Decrease in the importance of the government firms, the Public Sector Undertakings. The result of the changes can be seen eleven years down the line, in 2002 as follows— 1. Availability of multi brands for several products 2. Entry of Multinational firms 3. Increased choice of products for the customers 4. Heavy spending on advertising and promotion 5. Decline of stand- alone firms with indigenous technology (in fact Rahul Bajaj the doyen of Indian industry has been pleading for their cause with the government, which is in no mood to roll back any of the economic reforms; they want to move forward with more reforms now) 6. Excess production capacity generation by some firms in the hope of large market, where the actual sales figures belied the hopes. This could have been the result of incorrect market assessments by the firms. The firms are hoping that the demand will catch up with supplies and they would be better placed in the market then. Automobile firms are typical examples of over capacity in manufacturing. India faces other challenges like, the political turmoil with the terrorism at its peak, corruption in high places, financial scams, increase in rich poor divide, social revolution with the advent of foreign TV Channels. As it has resulted in increasing the complexity in marketing of products, firms are keenly looking for The Marketing Person who can wield a magic wand and continuously bring profitable business to the firm, which brings me to the purpose of writing the book. While books on marketing management are available in India, this one covers the latest methods of business analysis, marketing theory, policies; implementation processes in lucid, easy to understand language. With ten case studies, big and small, it should prove to be a veritable boon to the students, teachers and practitioners of the marketing discipline. The new opportunities for the buyers have created threats as well as challenges for the sellers. With on-line banking, on-line buying and (viii) selling outlets like bank branches, Bazee.com shopping malls may become redundant in foreseeable future. Present multi- storied super markets with central air conditioning and top brands, restaurants under one roof, which enchant the shoppers and window shoppers alike may even go in to oblivion, although today it is a little difficult to even imagine. Even a decade ago who would have believed that banking could be possible sitting at home through the Internet and the none could have thought of gradual erosion of the government owned Postal Department by the courier services. Today’s B-to-B customer is knowledgeable and wants more information from the sellers. Information technology is empowering the buyer with not only information but also comparisons within product groups, and customer wants products, which provide Value For Money to him. Earlier, the seller decided what he could make, with the available finance, technology, raw materials and manpower. And in those days of no or low levels of competition, in the seller’s market, the firms did succeed. Today the change is just 180 degrees as the firms must look at what exactly the market wants and that too before the competitor does it to be a success. Each chapter starts with the Aims and Outcomes expected out of the study of the chapter. At the end of the chapter a number of Questions for discussion have been provided for better understanding and for summarising the study of the chapter. Wherever possible the book uses interactive techniques by engaging the students and the teaching faculty into discussion to augment the learning experience. The book contains a unique learning process and a valuable experience with the help of a Marketing Game that starts with the first chapter end and runs through the book.