BUSINESS TO BUSINESS MARKETING

TREMENDOUS BREADTH OF B2B

Value Chain of an Economy

First Second Third Fourth Fifth Sixth

Raw Material Material Manufacturing Final Distribution Retail to
Extraction Processing Assembly And Consumers
After Markets

Eg Eg Eg Eg Eg Eg
ONGC Indian Oil L&T Tata Motors Distributors Shopper Stop
Oil India Tata Steel Bharat Forge LG Dealers Big Bazar
Reliance Ind Sterlite Sudaram Fast. IBM Wholesalers Retail Stores
Coal India Hindalco Sona Steering Nokia
Tata Steel MRPL Rane Brakeline HUL
Domain Domain Domain Domain Domain Domain
B2B B2B B2B B2B B2B B2C
UNIQUE CHARACTERISTICS OF B2B

• Nature of Demand

• Buying Motive

• Buying Process

• Buying Centers

• Shorter Distribution Channels

• Concentrated Markets

• Relationship Depth / Duration

CHAIN OF DERIVED DEMAND IN B2B

Chemical Manufacturer

Plastic Liners Co Metal Drums Co

Electrolyte Acid Co Battery Manufacturer

Auto OEM (Hyundai)

IMPLICATIONS OF DERIVED DEMAND
• Expanding Overall Demand
• Toothpaste vs Radiator Caps (price elasticity)

• Demand Forecasting
• End Use Approach

• Promotion
• Telescopic Marketing

• Distribution
• Bullwhip Effect (inventory issues)
• Acceleration Effect
 ACCELERATION EFFECT
Per pack cost of eclairs Business for 10 packs Business for 9 packs
MRP 100 MRP 1000 MRP 900
Retailer Cost 90 Cost 900 Cost 810
GM/VA 10 GM/VA 100 GM/VA 90
Sales Price 90 Sales Price 900 Sales Price 810
Distributor Cost 85 Cost 850 Cost 765
GM/VA 5 GM/VA 50 GM/VA 45
Eclairs SP 85 SP 850 SP 765
Mfr Cost 60 Cost 600 Cost 540
GM/VA 25 GM/VA 250 GM/VA 225

Cocoa Sugar Wrapper Cocoa Sugar Wrapper Cocoa Sugar Wrapper

SP 32 22 6 SP 320 220 60 SP 288 198 54
Cost 25 18 4 Cost 250 180 40 Cost 225 162 36
GM/VA 7 4 2 GM/VA 70 40 20 GM/VA 63 36 18
Note each pack of eclairs will have 100 chocolates

Loss in Business to Retailer 1000-900 = 100

Marketing Implications
Loss in Business to Distributor 900 - 810 = 90
Loss in Business to Manufacturer 850 - 765 = 85
• Shorter Channels Loss in Business to Cocoa supplier 320 -288 = 32
• Hybrid Channels Loss in Business to sugar supplier 220 - 198 = 22
Loss in Business to Wrapper supplier 60 - 54 = 6

Reduction in consumer Demand Rs.100 Reduction in the supply side Rs.235

 WHO ARE BUSINESS BUYERS ?
Industrial
Resellers / Intermediaries / Middlemen
distributors/dlrs

Original
Commercial Buy parts / Components for use in their product
Equipment Mfrs
Enterprises
Industrial Buy products for consumption/use
Users in their process

Public Sectors ONGC, BHEL, BEL, BEML, ITI etc

Government
Business Government
Indian Railways, DRDO, Electricity Boards etc
Undertakings
Buyers

Public Government Hospitals, Prison,

Institutions Remand Home etc
Institutional
Customers
Private
Hotels, Schools, Colleges etc
Institutions

Manufacturing
Sugar Mills in Maharashtra, Amul
Units
Cooperative
Societies
Non Manufacturing
Co-op Banks, Housing Cooperatives
Units
 ORGANIZATIONAL CUSTOMERS IN INDIA
Category Total Nos
All Schools 3833261
Colleges 20760
Universities 382
Professional Institutions 7120
Government Organizations 1222
NGOs 180
Registered Companies 855516
Registered SMEs 2031910
Un-Registered SMEs 10811864
PSUs 1669
Total 17563884 (17.5 Mn)
Retail Outlets 12000000 (12 Mn)
Grand Total 29563884 (29.5 Mn)
Source “Strategic Brand Management for B2B Markets by Sharad Sarin
 B2B PRODUCTS CLASSIFICATION
Raw materials such as Iron Ore, Fruits, Vegetables, fish , crude

MATERIALS & PARTS

(Goods that enter the Manufactured materials such as steel, chemicals, acids etc
final product directly)

Component Parts (Bearings) & Sub Assemblies ( steering)

Heavy Equipment & Installations such as Machines,

Turbines, Furnaces etc

CAPITAL ITEMS Light Equipment or Accessories such as Hand Tools, PCs, Jigs
(Used in the production
process)
Plant & Building such as Office, Factory, Warehouse
Real Estate etc

Supplies for MRO – fuels, lubricants, electricity, oil etc

SUPPLIES & SERVICES
(Used to support the operations)
Services such as Legal, Security, Courier, Mktg Research etc
 BUYING SITUATIONS IN B2B

Variety Seeking

Dissonance Reducing
B2C?
Extensive Problem Solving
BUYING
Habitual Buying
SITUATIONS

B2B?

???
 BUYING SITUATIONS

Product

Existing New

Straight Modified
Existing Re-buy Re-buy

Vendor

Modified
New New Task
Re-buy
DIMENSIONS OF BUSINESS PURCHASE

Importance of Purchase

Purchase Philosophy & Implications

Purchase Situations & Implications

Purchase Strategies & Implications

Vendor Evaluation
 PURCHASING STRATEGIES
• Centralized v/s Decentralized
• Implications?

• Single Vendor v/s Multiple Vendor

• Implications

• Just in Time
• Implications?
 Problem / Need Recognition

Determination of Characteristics & Quantity of the needed

item

Description of the Characteristics & Quantity of the needed

item

B2B Buying Search & Qualification of Potential Sources

phases
Acquisition & Analysis of Proposals

Evaluation of Proposals & Selection of Vendors.

Selection of an Order Routine

Performance Feedback & Evaluation

B2B BUYING - SIMPLE MODELS

Minimum Price

Economic Models

Total Cost
Cost of buying + Cost of Using

Perceived Risk

Behavioral Models Self Aggrandization

Ego Enhancement
 JAGDISH SHET MODEL
Specialized Role
Life Style Situational
Education Orientation
Factors

Active Background of Satisfaction with

Search Individuals purchase

Autonomous Supplier / Brand

Information Decision Choice
Sources Expectations of
Users/Purchase
Dept/Engineers
•Salesmen etc
•Advt Joint
Industrial
•Trade Shows Decision Conflict Resolution
Buying Process
•Direct Mail
•Exhibitions
•etc Company Specific
Product Specific Factors
Factors

Perceptual
Distortion

Type of Organization Organization Degree of

Time Pressure Perceived Risk Orientation Size Centralization
Purchase
WEBSTER
&
WIND
MODEL
SOME ASPECTS OF BUSINESS BUYING

Buying Objectives
(Task / Non Task)

Buying Centers
(Initiator, Buyer, Influencer, Decision Maker, Gatekeeper)

Buying Involvement
(Horizontal, Vertical)

Conflict in Buying
(Resolution Techniques)
 SEGMENTATION BASICS
WHY
WHAT • Seller is in a better position to
• Group of Customers whose spot market opportunities
expected reactions to the • Can create separate marketing
company’s marketing efforts programs for different buyers
would be similar during a • Has a clear idea about the
specified time period. response

STRATEGIC IMPERATIVES
SHOULD LEAD TO
• Pricing
• Product
• Target Market Selection
• Media Selection
• Niche Market Identification
• Logistics
• Product Positioning
• Sales Organization
SEGMENTING BUSINESS MARKETS
Geographic

Industry Vertical
Macro Level
Segmentation Customer Size

Business Product Use

Markets

Purchasing Strategy
Micro Level
Segmentation
Purchasing Criteria

Purchase Importance

Personal Characteristics
 SEGMENTING BUSINESS MARKETS
Geographic International / National / Zones / State

Industry Vertical Sectors,

Small, medium, Large based on

Customer Size
Sales, Profits, Manpower etc

Product Use Heavy User, Medium User, Light User

Adversarial , Relationship, Centralized, Decentralized, Single Source,

Purchasing Strategy
Multiple source

Quality, Price, Delivery, Warranty, After Sales Service, Supplier

Purchasing Criteria
Reputation, Quality certification

Critical , Not Critical

Purchase Importance
High Ticket , Low ticket,

Personal Characteristics Decision Style & Risk Taking

 BENEFIT SEGMENTATION

Product Benefit Target Segment

Butterfly Valve Corrosion Resistant Chemicals (Acids)

Ball Valves Fire Resistant Petrochemicals

Ultrathin Light weight LCD Travelling Salesman for

Mobility
projector technology products

20 gm bath soap One use & throw Hotels

SEGMENTATION PROCEDURE

✓ Decide suitable Criteria (variables for Segmentation)

✓ Macro & Micro Level Variables

• Evaluate the Segment

• Size, Potential, Cost, Revenue, Profits

• Make Allocation Decisions

• Single or Multiple segments, Sales Force, Channels, etc
BOTTOMLINE FOR SEGMENTING

• Homogenous Response (within segment)

• Heterogeneous Demand Function (across

segments)
 PRODUCT MANAGEMENT

Product
Development

Product
Management

Market
Development
NEW PRODUCT PROJECTS

• Derivative Projects
• Incremental

• Platform Projects
• Fiat Engine

• Breakthrough Projects
• Internet, (Destructive)

• R & D Projects
• Creation of new knowledge (plastic)
DRIVERS OF NEW PRODUCTS IN B2B

• Customer Needs
• BPO , Make or Buy, Customization

• Technology
• Mechanical Exchanges to Electronic Exchanges to Fibre Optics

• Government Rules / Regulations

• Telex Lines, Emission Rules /Plastic bags
 B2B SOURCES OF INFO

• Salespersons / Account Teams

• Customers (OEM) / Buying Center Members

• Distributors / Dealers

• Product Management : Based on a priori

understanding of customer needs
THE TRICKY BUSINESS OF CUSTOMER NEEDS

• Felt / Not Felt

• Hunger
• Counselling

• Stated / Un-stated / Delight

• Good Mileage
• Good after sales service
• Surprise Gift

• Latent / Negative
• 250 km carburetor
• Life Insurance
 TACIT – UNMET NEED

Distributors credit notes

and dues not being Distributors are
processed in time not doing well

Company is
Company’s finance losing market
department is goofing up share

Accounts deptt is too loaded they are Company needs

processing too many transactions. Mistakes an accounting
are happening frequently software
 TACIT – UNMET NEED

In B2B Firms spend a lot of money getting

customers to realize their needs

Company is
losing market
This is sunk cost if the order is not secured share

Company needs
Hence one more dimension in B2B is an accounting
“Customer Development” after product software
development.
 B2B PRODUCT MANAGEMENT

• Each “deal” is customized

• Large quantities make it viable to customize

• Vertical Markets Vs Horizontal Markets

• Customers can have patents on products that are

outsourced.

• The role of Product Manager is more field based. (tactical as

well as strategic)
HOW RELEVENT IS BRANDING IN B2B?

• Global Markets

• Mergers & Acquisitions

• Establishing Credibility with Buyers

• Non-Regular Products / Undifferentiated Products

 B2B BRAND FUNCTIONS

• Risk Reduction

• Prestige / Credibility

• Information – Providing Functional Brand

association
• B2B buyers look for functional / economic value
 MODEL OF B2B BRAND EXPERIENCE

Performance Variables
• Quality
• Delivery
• Price
• Service

Brand Experience
Behavioral Variables
• Attitude
• Relationship
• Integrity
• Responsiveness
• Keeping promises
 B2B BRAND MANAGEMENT ISSUES

B2C B2B
• Branding at the Product • Branding at the
Level Corporate Level

• Focus on functional, • Focus on functional, risk

emotional and self- reducing benefits
expressive benefits

• Communication through • Personal Communication

mass media
USE OF DIGITAL IN B2B

• E-payments ( E-commerce)

• Emails

• Electronic Bidding

• Content Marketing
 CONTENT MARKETING IN B2B

• Involves creating, distributing and sharing

relevant compelling and timely content to
engage customers at the appropriate point in
their buying consideration process, such that
it encourages them to convert to a business
building outcome.
 NEED
• Long term relationships in B2B can be maintained
through content marketing at lower cost

• The readily available rich information for many

participants in buying – cut down selling cycles

• Brands vulnerable in Social Media ( Customers own it)

 NEED
• B2B Customers complete nearly 60% of their
purchasing process before contacting a seller –

• Anticipation/ Recognition of Problem

• Determination of Characteristics & Quantity of the needed item

• Description of the Characteristics & Quantity of the needed item

• Search & Qualification of Potential Sources

• Acquisition & Analysis of Proposals

• Evaluation of Proposals & Selection of Vendors.

• Selection of an Order Routine

• Performance Feedback & Evaluation

B2B MARKETERS HAVE REALISED THIS

• 86% of B2B Marketers use Content Marketing

• 47% have dedicated marketing group

• 31% say it is effective

• 21% are able to track the ROI

 Awareness Purchase

Emotional Entertain Inspire

• Quizzes • Celebrity Endorsements

• Competitions • Community Forums
• Games • Reviews
• Featured Videos

THE CONTENT MARKETING

MIX (LANDSCAPE)
• Product Features
• Guides • Case Studies
• Webinars
• Trend Reports
• Calculations
• Press Releases • Checklists
• Infographics • Interactive Demos
• Data Sheet / Price Guide
Educate Convince
Rational
 IMPORTANT POINTS
Accept Digital Marketing as a paradigm change
Acknowledge Importance especially in the context of B2B

Develop a Strategic Consider it a long term investment Focus on

Approach relationships and not on series of campaigns.

Ensure it fits in with other marketing activities

Have alignment and is aligned to the IMC plan.

Do not carpet Bomb. Chose the ones that are

Evaluate Techniques effective in the context of your business

KPI for people and ROI for the investments

Have Metrics
B2B PRICING
 MAPPING CONTEXT WITH STRATEGIES
Skimming

New Product Pricing Penetration When ?

Exp. Curve

Leader
Competitive Pricing Parity When ?
Low Price

Complimentary

Product Line Bundling When ?

Customer Value

Cost Plus
Cost Based When
Mark Up
 INFLUENCING FACTORS

Objectives Strategies
(Profits, market Share, (Skimming, Penetration,
Cost Recovery) Leader, Parity etc)

Influencing Factors

New Product
Competitive
Context Product Line
Customized Product
 PRICING IN B2B

DIFFERENCE No.1: B2B CUSTOMER VIEW

COSTS DIFFERENTLY
 B2B CUSTOMER VIEW OF COSTS

Expenses involved in seeking out prospective Prefer Existing

Search Costs suppliers. (Locating, credit checks, plant Vendors , Maintain
inspections, financial analysis etc.) a vendor file

Transaction Expenses involved in Negotiation, Expect Speed &

Costs Insurance, Installation, etc Agility

Site Ready, extra power sanction, initial Expect

Start – up Costs
run, Debugging etc Proactiveness

Expect good
Post-purchase Training, Maintenance, Repair, Interest,
after sales
Costs Depreciation etc
service

Expect AMC ,
Rate of Utilization, Decreasing
Lifecycle Costs Life cycle
productivity, Obsolescence, Disposal etc
management
 2. B2B CUSTOMERS BUY DEALS

• Product Price
• Advance Payment with Delayed Delivery

• Credit Period

• Warranty Terms

• Shipment Cost ( Distance)

• Rate Contracts
3. B2B CUSTOMERS BELONG TO A
SEGMENT BUT ARE NOT MASS MARKETS
 B2B PRING
• More Decentralized than B2C
• Case to case basis

Jan-17 Influencing Variables

Customer Price Rs. Qty Wrnty Pmt In/Out CTS
Customer A 3700
Customer B 3600
Customer C 3300
Customer D 3800
Customer E 3750

Customer A
Month Price Rs.
Jan-17 3700
Feb-17 3600
Mar-17 3300
Apr-17 3800
May-17 3750
 MOMENTS OF TRUTH IN B2B PRICING

Objective : Strategy :
Market Share Penetration

Micro
Economy Customer A factors
Pricing
Micro
Customer B factors
Tactics
Micro
Customer C factors
Micro
Customer D factors
B2C Segment Micro
Customer E factors
 B2B MICRO INFLUENCERS

• Long Term Relationships – Cost to serve

• Better fit on customers – customization requirements

• Current share at customer

• Well informed customer – Price Transparency

• Well informed competitor

• Perceived value of the product

 TACTICAL PRICING OPTIONS

• On Case to Case Basis….

• Match competition price

• Price above competition
• Price below competition
• Match or Raise Price
• Match or Lower Price
TACTICAL
CUSTOMER PRICE SENSITIVITY
PRICING
LOW HIGH

HIGH Match Competition Quote Lower

PRICE
TRANSPARENCY

LOW Match or Lower than

Quote High
Competition
TACTICAL
CUSTOMER PRICE SENSITIVITY
PRICING
LOW HIGH

Share Share
Low High Low High

Quote Match
HIGH Cost High Cost High a b
High Or High
To To
Serve Match Match Serve
Low Low c d
Comptn Comptn
PRICE
TRANSPARENCY
Share Share
Low High Low High

LOW Cost High e f Cost High i j

To To
Serve Serve
Low g h Low k l
 B2B PRICING POINTERS
• There is no “one” standard price.

• Price not emphasized mass media. (segment / individual

customers)

• For the same product the firms can have two different
pricing approaches.
• Eg: Customer Value Based / Parity Based

• For the same company two approaches at different points in

time.
• Mark Up/ Target Rate of Return
B2B CHANNELS
 B2B POSSIBLE TRANSACTION 1

Order Order
Manufacturer Distributor Customer
Title Title
(Billing) (Billing)

Material
(Shipping)
 B2B POSSIBLE TRANSACTION 2

Order Order
Manufacturer Distributor Customer

Material & Title

 B2B POSSIBLE TRANSACTION 3

Order
Manufacturer Customer

Sale
Credit Distributor

Material & Title

 SALE CREDIT – WHY ?

• Enquiry Generation

• Follow up for Order / Demo Support/ Payment

• Credit Risk by Channel Partner

• Installation / After Sales Support

• Account/Territory Protection
 CHANNEL ROLE IN B2B BUYING CASE 1

Raj Traders, a dealer for HCL, learns that KPMG has

requirements of 4 servers. He ensures that KPMG
sends a RFQ to HCL as they want to buy direct. HCL
sales executive quotes for the product, does
subsequent follow up and secures the order. Raj
traders is given the responsibility of after sales service.
 CHANNEL ROLE IN B2B BUYING CASE 1

Process Manufacturer Channel

Need Recognition ✓
Enquiry Generation ✓
Bidding ✓
Negotiation ✓
Order Execution ✓
Payment Collection ✓
After Sales Service ✓
Relationship Mgmt ✓
 CHANNEL ROLE IN B2B BUYING CASE 2

During one of his courtesy calls at LIC in Nariman

point, Ashraf, a sales executive for Voltas air
conditioners, found that they have requirements for
split ACs. He asked his dealer to bid for the same and
accompanied the dealer during negotiations. The
order was secured by the dealer executed the same.
Ashraf still keeps making courtesy calls at LIC.
 CHANNEL ROLE IN B2B BUYING CASE 2

Process Manufacturer Channel

Need Recognition ✓
Enquiry Generation ✓
Bidding ✓
Negotiation ✓
Order Execution ✓
Payment Collection ✓
After Sales Service ✓
Relationship Mgmt ✓
CHANNEL ROLE IN B2B BUYING – SUMMING UP

Process Manufacturer Channel

Need Recognition Yes Yes
Enquiry Generation Yes Yes
Bidding Yes Yes
Negotiation Yes Yes
Order Execution Yes Yes
Payment Collection Yes Yes
After Sales Service Yes Yes
Relationship Mgmt Yes Yes
 CHANNEL CONSIDERATIONS

• B2B
• B2C
• Organization Structure
• Techno Commercial Skills – Stocking, Warehousing
• Few or No complimentary brands – Logistics
• High Credibility – Location
– Many Complimentary Brands
 DIRECT or INDIRECT – When ?

• Direct • Indirect
• Large Order • Small Routine Orders
• Multi-Location Orders • Brand / Firm loyalty is
• Strategic Account high
• Customer Insistence • Dealer equity high
• Techno-commercial • Inconsistent Business
Complexity Practices
 CONFLICT SITUATIONS IN B2B

• Taking over a customer

– Customer grows / Dealer ineffective

• Pricing
– Large deal prices where customers may get lower than dealer
price

• Sales Support
– Joint calls with competing dealers

• Territory Issues
– Dealer encroachment
 CONFLICT RESOLUTION

Negotiation Use of Power

Both parties sit together • Reward Power
and resolve the • Expert Power
differences • Coercive Power
through discussion and • Referent Power
consensus. • Legitimate Power
 B2B CHANNEL CHOICES

Full Line Specialty

CASE 2
CASE 1
Entire Company B, among
Company A sells
Market other valves it makes,
Industrial oil
sells
Only through
only ball valves
channels
through channel

CASE 3 CASE 4
Company C sells Company D sells its
Segment All its motors low end ERP
direct in UK solution to small
but through an enterprises only
agent in Canada through channels
 SUMMING UP

• B2B Channels
• Have less linkages.
• Are Hybrid.
• Operate more like principal
• Stocking/Warehousing not very important.
• Negotiation / Personal Selling are important.
• Technical Competence is more salient.
 PROMOTION IN B2B

Includes all the activities that communicate and promote

products to the target market

• Sales promotion
• Advertising
• Sales force
• Public relations
• Trade Shows Promotion Mix in B2B
• Direct mail
• Telemarketing
• Internet
• Web page
• Social Media
• Blogs
• Email etc
 OBJECTIVES OF PROMOTIONS

• Secure customer leads

• Introduce new products
• Assess preliminary reactions of customers
• Obtain industry exposure
• Maintain an image
• Obtain favorable publicity in local press
• Develop goodwill
• Maintain corporate morale
• Solve current customer problems
 TRAPS IN PROMOTIONS

• What is the objective of promotions? Is it a must ?

• Is it being used as an easy way out to ‘buy’ sales?

• Are we doing it just because competition is doing it?

• Is it the right tool?

• Is the entire scheme being monitored for discipline?

• Is it becoming a routine?
MOST COMMONLY USED PROMOTIONS: B2B

• Personal Selling
• Salesman In-Charge
• High degree of personalization / customization

• Direct Mail
• Better fit on buying centers
• No shooting in the dark as in B2C

• Trade Shows / Road Shows

• Target ( Interested ) Audience
• Demos / Trial Use
• Enquiry Generation
• Several Platforms available ( industry associations
etc )
 DIGITAL MARKETING IN B2B

TRADITIONALLY B2B
COMPANIES SPENT LESS
ON MARKETING
KEY ACCOUNT MANAGEMENT (KAM)
WHAT IS KEY ACCOUNT MANAGEMENT ?

Employees

Govt
CRM
Type of Identify, Develop,
Relationship Maintain mutually
Stakeholders
Marketing profitable
relationship with
select customers
Channels

Customers
 NEED FOR KAM

• No Differentiation
• Big customers becoming bigger
• High Cost of Acquisition
• Customer Sophistication (Rationalization of seller)
• Value Perceptions Differ (Need for customization)
 UNDERSTANDING KAM

• Select Few Customers

Essence • Special Treatment
• Mutually Profitable

• Account Selection
• Analyze Buying Process
Elements • Developing Relationships
• Sales Co-ordination
 EXPLORATION - ACCOUNT STATUS

KAM AWARENESS

Know Don’t Know

High Build Develop

INTEREST
IN KAM

Low Transact
 ACCOUNT SELECTION

Capacity Price &

Prestige
Utilization Margins

Account
Selection

Order Maintenance
Growth
Patterns Costs
THE NEXT STAGE : ANALYZING & DEVELOPING

Understand Buying Process

• Buying Center For Account Mapping
• Power and best sales route
• Priorities

Designing KAM Structure

• Technical Group
For better coordination
• Top Management
• Marketing

Designing KAM Deliverable

• Incentives For the desired Value
• Investments Creation
• Process Adjustments
 STRUCTURE FOR KAM

Centralized Decentralized
Co-ordination Co-ordination
1 4
Centralized Account One man
Execution Teams Support

2 3
Area
Decentralized Matrix
Specific
Execution Structure Structure
 KAM DELIVERABLES

• Incentives
• Special Prices, Discounts, Free Service, Training etc

• Investment
• Volvo service center near to a customer (VRL )
• Special Assembly line or testing equipment (Tata Steel)

• Process Adjustment
• Inventory Planning ( P&G & Walmart) ( FedEx & IBM)
• Part Load Delivery
• Order processing based on Letter of Intent
• Sales Registration in new Territory
 KEY ACCOUNT AUDIT

• Enhance
Continue
• Status Quo

Periodic Assessment
•Revenue / Profit
Decision
•Growth
•Cost to Serve

No • Dissolution
 KEY ACCOUNT RISK

• Defection

• Competition of customers not happy ( why not we)

• Profit Leaks
• Using lots of valuable time (sales, service, technical)
• Using lots of valuable services (that we offered them)
• Demanding emergency support at peak times
 SUCCESS ELEMENTS

• Top Management Involvement

• Product / Process Capabilities
• Collaborative Culture
• Flexibility
• Focus on customer Problems
• Account Sales Executive
 BIDDING

• Formal Invitation to sellers to offer his products

& services

• Comes in different names

WHY BIDDING PROCESS

• Standardization
• Transparency
• Choice
• Control
• Image
 BID RIGGING
• Bid Suppression
• Not quoting so other party can get the order

• Complimentary Bidding
• Submitting bids with high prices so that other party can get the order

• Bid Rotation
• Market sharing by taking turns at winning the bids.

• Phantom Bidding
• One vendor submitting more than one bid. Only one is attractive
 E - PROCUREMENT
• Advantages
• Faster, Transparent ,Prevents Bid Rigging

USE OF NET
Physical Electronic
Invitation Advertisement Website
Tender Dockets Hard Copy Download
Bid Submission Physical Delivery Submit on Net
Negotiation Meeting Emails
Order Placement P.O P.O
RESPONSIBILITIES OF BID MANAGER (IT)
• Understanding the requirements clearly from the RFx

• Identifying right stakeholders - forming winning team

• End-to-end bid/proposal management

• Record, track and close all actions

• Minimize ambiguity and guess work

• Using varied pricing tools for commercials

• Ensuring strict adherence to proposal timelines and quality standards

• Providing innovative suggestions by having a deep involvement

• Ensuring win themes are resonated throughout the bid cycle

 BID JARGON

• Black Listing • Rate Contract

• Reservation Price • Buyers Consortium
• Earnest Money Deposit • Documents through Bank
(EMD) • Letter of Credit (LC)
• Performance Bank • Order splitting & Slab
Guarantee (PBG) pricing
• Liquidated Damages (LD) • Supplier Enrollment /
• Specking a Bid Registration
• Tender Scheme • Bid Rigging
• Letter of Intent
 BID PROCESS
Receive Enquiry Direct or Open

Buy Bid Documents If Required

Prepare the Bid Stick to a standard format

Submit the Bid Within Due Date & Time

Negotiate Scheduled

Re- Bid Earlier Bid becomes Null & Void

Re-Negotiate If called for

Finalize Order Receipt or Lost