B2B session 1- Sec 4- Subhasis Ray (Legend)

Examples

B2B: if the buyer and seller are both businesses.

Deloitte/PWC/EY: B2B domain: sales are consulting services to businesses.

Boeing: Boeing is also a B2B.

Coca-Cola: sales to corporates such as McDonalds/railways.
B2B has nothing to do with the product.

MotherSon sumi: is a B2B for automotive electrical wire harness

many major B2B are not known to us, generally we focus on B2C in B schools

Generally, Alibaba like e-commerce are also in B2B. Large order quantities are normal for B2B

XIMB buying from a trader is also a B2B.

Hitech, High value (specialized) products are mainly our focus

Why Apple chose Largan Precision?

B2B companies need to understand what the end user wants. For Apple camera, Largan achieved
what was required by the end customers. Their expectations!

Apple would never share their market research data by asking to build what is required. The supplier
would have to come from its own! Or else apple’s competitor would get to know research data

Another example of BASF and HUL

BASF to be a good B2B player had to conduct market research for HUL products like surf excel for
which it supplied raw chemicals. To know what exactly HUL needed, it went for a primary research
door to door asking users of surf excel the problem with the detergent and came up with solutions
to that.
 B2B session 1- Sec 4- Subhasis Ray (Legend)

Wipro has B2B and B2C, the B2C segment talks about you and me buying a laptop, it got channels
like retailer, distributor etc.

B2B: business/ins/gov have direct channels

How will the approach be different?(B2B vs B2C)

1) Volume/transaction more in B2B
2) Pricing is more flexible for B2B due to more volume
3) Customization more possible in B2B
4) B2B the relationship is very imp for re-order(personal visits year after year), B2c is mainly done
through CRM software like birthday messages, discount

Job Role

B2C: manage distributor & through distributors to retailers. In ITC, we don’t need to understand the
atta or noodles
B2B: personally, understand the company and build the rapport and relations: more strategic,
technical problem solving.

B2C: social position, age, gender, income all play a role for selection, impulsive buys

B2B: rational decisions based on specs, purely based on tech driven.

 B2B session 1- Sec 4- Subhasis Ray (Legend)

• Demand: for B2C it is impulsive based on discounts, colour. But A B2B like Nalco/Rourkela will ne
bought if there is an organizational demand.. which is a derived demand. A business
requirement only. Demand cannot be generated on their own.

• Buyer behaviour: impulsive, depends on demographics, b2b: industry characteristics

• Environmental influence: For Example:

1) Tiktok, the product was hugely successful yet out of market due to political/legal
environmental impact.
2) Similarly for Huwaei it is a leader in 5G Telecom, but USA and UK have stopped allowing it.
India too.
3) Same thing for Renault.

The 70% demand is created with the B2B industry itself. Trade show/exhibitions/research papers/
journals to generate the other 30% of demand

Product innovation & technology innovation:

Product innovation may not be due to tech innovation. Product innovation is like showing another
use of it. The core tech doesn’t change. The technology innovations are costlier and riskier and give a
margin in the long run. In the world, which had success in mobile: android & Microsoft built two
platforms

How to be successful in building a proper platform?

• Platforms can succeed only if it is good network capability.

• Platforms needs to be compliant with regulatory compliances.
• Platforms needs to have standards for being accepted by other B2B. Inter-operability
 BBM 2nd Session- Prof. Subhasis Ray
What do you think customer buying behavior or reflect on the buying process of the customers?
for Indian railways to buy a bullet train

1) There are different macro points one must take care of for the organizational forces,
2) The govt may change its policies
3) Technological aspects like acceptance of what technology it is running on

Concept phase:
a concept phase is needed to make the gov realize that they need it. Smart city project is such concept which
needs to be sold first before selling the technology. Conceptselling first and then technology second. Sellers
need to engage and educate customers.

Smart sellers try to engage with the customers as early as possible.

 BBM 2nd Session- Prof. Subhasis Ray

Customers don’t know about technology so they print a vendor requisition add to ask for presentations. The
vendors accept and give a presentation to secretary which is a big picture. It doesn’t talk about the technology
in details. The customers then ask how is it possible? How will they do it? With information from the
customers the vendors give soln. like traffic management and water source digitization. So now request for
proposal is done or installing intelligent traffic system and a rough idea is shown. The customer decides
technology 1/technology 2. Next notice inviting tender is done... Interaction with the govt is primary
importance out here.

Individual relationships are very important because they can influence buying behavior. One typical example
given from sir’s own experience was of a purchasing decision done in IIT Kharagpur, where one of the profs
who had significant technical knowledge and industry experience chose Lucent and not cisco citing strong
network experience of Lucent.
 BBM 2nd Session- Prof. Subhasis Ray

B2B sales procedure in high value sales

1) Problem recognition: A problem that has been identified, like some faculty members are saying that there
is a cooling issue with the classes. That’s a problem identification
2) The description of need: what is the problem definition? Why it is not cooling? What needs to be done?
3) Product spec: What product to buy? Is it a standing ac? Or a bigger fan?
4) Supplier Identification: Who are the vendors of the market who can provide such products? Suppler o
5) Proposition/ quotation/bid: what is the guarantee? Warranty? Price? and comparison is done
6) Supplier Selection: Yes, we want to buy and have some conditions. Eg: 10 should be delivered in ximb and
xub. They should be checked by your maintenance guy and payment would be done after 15 days.
7) Conditions of delivery and conditions of maintenance
8) Performance Review: Blacklisting and bucketing like Tata steel keeps track of performance of the suppliers
for identifying which ones can be trusted for bigger and better products.

If you are a sales manager, you need to be aware about who your customers are? Are you meeting with the
purchase manager? Or the engineer or the customer end. For B2B the best practice is to actually know who
the guy is the real user in the customers place.

The third stage is most important for today’s session. Mainly it is known as pre-sales/soln architect etc.
• You need to know your tech
• Knowing what kind of tech, the customer needs
• And the tech which is the best in that space

Companies like Deloitte/EY/TCS/McKenzie perform a twostep bidding process:

➢ In technical Bid, no price is mentioned. You give a technical bid for a core solution, the products going to
be used, the SLA’s.
➢ The next level is commercial bid/tendering

Companies often would often open a dedicated chatroom. Its fairly transparent and in the next level they go
for price bid. In general, if it’s a govt, the lowest bidder is contacted and negotiated. Sometimes govt. may
identify three lowest bidder and ask the other two bidders to match the price of the least one so that a shared
project can be initiated.

All B2B purchases happen in group, fundamental difference than B2C. There is a user, an influencer, a decider,
a purchaser. What is the common mistake we do? We will target the purchase manager because of
 BBM 2nd Session- Prof. Subhasis Ray
comfortability. He can appreciate or he can simply turn you off. In the org we must know who are the people
in the buying org with those specific roles. You can be an influencer not just because you are good in tech!
Sometimes the influencer is much above my role. In this case gatekeeper methodology can be followed to find
information such as email id and other contact details can be retrieved from people who are information
sources.

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 B2B- Session3-Prof. Subhashish Ray

How B2C try to establish relationships with end customers? How is it different for B2B?

B2C use branding, campaigns, digital media, social media to build relationships. Whereas, in B2B, it is personal
selling. Most of the CRM in B2C is software driven while that in B2B it is personal visits, regular visits to
customers.
For B2B, the personal relationship is most important for any org to start building a relationship.
Exhibitions, trade fairs, LinkedIn posts are done but it’s the personal relationship which drives the value.

What is the motivation of purchase for a B2B customer?

The way the product is used, the importance of the place for the customer is highly critical. That criticality
makes it a highly valued product.

What is the connect between relationships and purchases based on criticality of the product to the business?

You should not love all your customers equally. Its wastage of resources to love all your customers. Do not
spend too much time and effort on customers for one-time purchases.

Transactional exchnges: Reckitt supplying a cleaner, the volume is important, the price range is important

VAS: If I am looking for a product which is needed in ICU, I need to be very careful about the vendor. Can he
live up to the promises? Can he hold some inventory for me? In a hospital scenario the timing is critical, the
value added purchase is more about the quality, people working for the org, experience rather than price.

Collaborative :Reckitt created a product for fortis. Reckitt scientist, doctors may formulate the product
specially for the partner, high end of customization.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)
 B2B- Session3-Prof. Subhashish Ray

You cannot love every customer equally, whom should we love more and whom should we less?

Sselling plastics to colleges, selling switches to schools, very standardized products, customer is only interested
in price. No point to build a long term relationship. But you should also understand not everybody cam provide
value and service every time and perfectly. So its better to love more of the VAS and Collaborative customers
to concentrate there to build a relationship for better margins. The incetive or bonus as a sales manager is a
top line target and bottom line target. If you join as a manager in the sales team, you have two types of
targets, you not only have to sell but sell profitably.

In a transactional exchange, you are basically doing order processing rather manage the process, I will have
Large no. of channel members like distributors and I will manage the channel mainly. The more commoditized
the product, sales is outsourced to retailers and distributors but I will have managers to keep a check on that.

For Value added/collaborative I need to have a control on the seller. More qualified/technical expertise and
literally zero or thin channel members.

Companies spread the relationship & love equally and that is why it is inefficient. Most of the companies
would go about prices. The customers can be very big but they are always buying on price. Should I not reduce
my resource? This resources are travelling, hotels… these can be excluded to drive better margins.

In transactional exchanges, margin tends to be less for each product. But, what if the market is huge and
economies of scale coming into place, we can do better with collaborative exchanges. How do we prioritize
our customer then?

If we are making money by just producing products and low cost and selling it at decent margin, there is no
problem at all. Only very few will be able to sustain that margin. Because, this margin comes from operational
excellence which can be copied. That’s why most companies want to get into branding and marketing.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)
 B2B- Session3-Prof. Subhashish Ray

If you are making 100 ruppees profit, 20% actually drive the Rs 80 profit, 10% customers give you most losses
and the rest 70% just break even. (Paretto Principle)

Your biggest customer can be also a loss making customer. If you look at top line you would think he is the best
customer, but you need to take decision by seeing the bottom line.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)
 B2B- Session3-Prof. Subhashish Ray

To get the order, we say yes to everything, it would not very suprising to see that the product is not creating
any profit with the customer deal. Every company will hold you responsible for top line as well as
bottomline.

Pricing of Japanese restaurant: japanese food are expensive, the point is if you are japanese restaurant, it is
perfectly fine if you find customers who are ready to pay more. You cannot operate with customers who want
to have japanese food with a chinese benchmark in mind

If you are a sundaram fastener supplying to tesla, its most possibly not a problem

The bigger customer not paying in time is a major problem because the block a large amount of money and
very often they are unpredictable. Very reputable companies may not pay in time or ask for credit extention. If
you don’t have a window to balance this problem. It is not possible to factor this.

The simplest and worst thing as a sales man is something tangible, easiest and sometimes the worst way.

Social relationship building

Structural Rms:

You try to convince the customer that it is not just profits, deals and other things. The research says that
companies like cisco/caterpillar have these things, but they focus more on increasing efficiency of your
employees. Can I tell the customer how their competitors are getting better? Training on resources,
technology can be availed by smart customers to get ahead than their competitors. So B2B firms like
cisco/caterpillar help on knowledge, trainings. But one thing to keep in mind is that they need to be seen as
technology companies who can bring in advanced knowledge and expertise to work in such situations.

-Soura & Anubhav! (Das of course not Jogi)

(dua o mein yaad rakhna)
 B2B-session 4-Prof Subhasis Ray
How can B2C sector use structural RM’s to build relationship?

Structural RM is only applicable for top customers. Why are they buying I need to ask? They
may buy because of investing/connoisseur/gift. If I want to increase their perceived value, I
need to know the intent and customize the offerings.
If the customer is a collector in that case, possibly home delivery can be done to take
advantage or how to maintain them and to protect it.
If the customer is an investor I can help him with tax benefit.
Giving knowledge /expertise to increase customer efficiency. Local jewellers cannot be
considered here because you can’t trust them. Capgemini has some customers like HSBC.
What sort of knowledge can be shared with HSBC to increase its efficiency? Very difficult to
implement.

Segmentation: starting point of marketing. If we can divide the customer with age/sex etc.
Divide the markets in groups.
Target: Then ask two questions? Do I have the resource for all groups? Or some specific
groups?
in B2B, the STP is different, we can think B2B: in terms of 3 groups
Business/institutes/government.

In all three B/I/G there is degree of variability and cannot be considered as segments. While
it is quite attractive to go for large customers, many of these large customers will give us
sales, but then it doesn’t give us much of profit. It may delay payment, its bureaucratic, its
asks for bigger discounts. Just by the size don’t agree for business. Because most of the
times the bigger segmentations are more loss making. Don’t jump because its Nalco/Jindal
steel. There are companies with worse process than government. The entry barrier is also a
challenge to get in and you have to invest a lot to build the relationship.

How can I decide my segments, whether I should go or not? (atleast2, preferably 3 to click)

Is it possible for me to know the exact potential of a segment? E.g. loreal hair dyes are used
by low end saloons, but can I know the exact potential of this market? 1.So measurability is
tough to find without an extensive market research? 2. Can I reach these shops? 3. What is
the volume required by the segment? 4. Responsiveness: Will a barber be ready to put a
loreal hair dye, because they make more margin from products used than the service? Is he
ready for a new tech/vendor?

Lockheed martin is one of the biggest defences and Indian Govt is the buyer. 2. Accessibility
tough. 3. Substantiality/volume very high for Indian govt. 4. Responsiveness not an issue for
Lockheed martin is not an issue, but it has high entry barrier.

B2B/B2C difference in segmentation?

A brand like Tata Himalaya vs a Bisleri bottle. They are closely looking at demographics most
importantly, very closely at different attributes of a customer. These sort of segmentation
like TATA consumers to position the brand, think about type of advertisement. Will they go
to reliance retail or neighbourhood kirana store?

-Das & Poddar

 B2B-session 4-Prof Subhasis Ray
Now the company making the plastic bottle is supplying to a large no, of customers like
Kinley, Aquafina, IRCTC, Himalaya and multiple local mineral water brands. They are not
interested for demographics, they are not interested at the benefits, they are primarily look
at the size of the market. Look at how they buy? Look at criteria of buying? So, the same
water bottle is profiling the market very different from B2B and B2C.

Think of a company which makes uniform for workers. If I want to be in the industry, how
should I segment?

Macro segmentation: Industry, customer, geography (1st level of seg) I need to find which
market I will go geographically. Within a location I may look at different type of factories.

Customer types

Size

Where’s the product used: peculiar use? The material should be such that it prevents from
skin touch.

Micro segmentation: It is more tough to comprehend. More precise.

Based on the importance of the customer it will change. A hotel like Taj, will stress on a
designer uniform rather than the functionality of the uniform. (purchasing strategy)

How important is the dress for the functioning of the customer? (functionality)
Suppose I have hotels in South India, diff hotels give diff treatment to uniforms.

Whether I go for some or all of them would be decided by Sales & Distribution information.

Ideally you should do Macro & micro and then check other smaller points.

ELGI CASE

They say customers in India only concerned about price

Customers outside are more on performance
Efficiency is changing
How B2B product selling is getting converted to B2B service selling
Total cost of ownership?
How the lifecycle cost is important to sell the customer
Usage of AI

If you sell a machine now, with IOT machines can talk to each other, it also takes to sales
people, after 8000/10000 runs it sends an info saying it has 2000 runs to go, an email goes to
distributor, company to plan a next service and to sales manager that this machine is nearing
end of life so you can do something.

The main point is the customers are asking for service rather than a product. For example, in
XIMB an ac is not working, traditionally the ac needs to be bought. But now customers want

-Das & Poddar

 B2B-session 4-Prof Subhasis Ray
the classrooms should be for 365 fays cool between certain hours… can you give me a
quote? Now you whole B2B concepts are changing. You have to come with a service model
than a product selling. Customers just wants cooling. Its not my headache to decide what
and where. You give me a quote.

If you are a sales manager of air conditioning company now, how will the sales process
change in terms of pitching to customers (based on Elgi article)?
Ans: Service selling is difficult because we cannot touch the service, it is perishable and is
variable. We have to counter these issues in mind of customer. Service marketing requires
three additional P’s :
a) Process- We can explain how system can be maintained so that there is no breakdown
b) Physical evidence- We can provide a checklist, app, visit to customer site, virtual
simulation, showing that services are as per certain standard. We provide physical
evidence about reliability of service.
c) People- sales guys need to have higher level of technical knowledge because customer is
interested in function rather than product. Everything that the customer wants to
understand about the function must come from people. So smarter, skilful sales people
are required

Other Question & answers:

All jewellers use Financial relationship management through discounts etc, but some are
also getting involved in social part by using pictures, deposit scheme etc. How can a smart
manager in Tanishq use idea of Structural Relationship marketing?
Ans: It can be applied to top customers
Questions to be asked:
a) Who are top customers?
b) Why are they buying?
c) Who are coming for gifting?

Based on the answers, perceived value can be increased. For example, explaining how good
service can be given and gifting can be done. Home jewellery maintenance program. If
customer is an investor, tell customer the tax benefits. We have to know how to increase
perceived value.

Structural RM is used to give knowledge as to how to increase customer efficiency and

business.

Often in the business market, segments that appear strong (that is, they produce a lot of
volume) often do not contribute as much to profits as they should. Why ?

Ans: Taking the example of Indian railways purchasing chairs for platforms. In such cases,
there are multiple reason for seller not making profit:
a) Huge discounts are asked for high volume
b) Delay in payment especially in government orders

-Das & Poddar

 B2B-session 4-Prof Subhasis Ray
c) Slow decision making
d) Bureaucratic red tape
e) Modifications and iterations asked by buyer consume lots of resources and time

Industrial uniform manufacturer. How to segment this market in India?

Ans:

Macro Segmentation can be done easily. Micro Segmentation requires proper market
research
Micro Segmentation:
a) Importance- How important is the uniform for the functioning of the customer. It can be
an important way of segmenting of customers
Ex- Different types of hotels may give different importance to the way its employees
dress and its relationship with branding and customer perception. Some hotels believe
that they way its employees dress talks about their brand, therefore they will give more
importance to its design. They will be different than restaurants who look at uniform as
just another cost.
b) Purchasing Criteria, strategy, characteristics- Based on strategy, purchasing criteria will
change.
Ex- If one is looking for low cost product, they might want vendors who give the
uniforms at low cost that have low delivery, maintenance. But, for Taj, the criteria would
be the aesthetics of fabric, the comfort the employees get by wearing that, etc.

Criteria of segmentation in Hospital Industry?

-Das & Poddar

 B2B-session 4-Prof Subhasis Ray
Ans: Design in not in mid of hospital owner. But, safety, wear ability, fabric that is less likely
to catch bacteria, etc. Hospitals may give have different level of importance to a dress than
nursing home. In nursing home, they may not even need a dress.

As a dress provider, we need to know, in a geography, how many nursing homes and how
many hospitals exist. Who buys on price, who looks at quality of fabric, for whom purchase is
a strategy and for whom purchase is only on cost.

-Das & Poddar

 B2B-Session6-Prof. Subhashish Ray

The below companies were never a part of discussion in IIMs. Because only the top companies were
a part of discussion when the term MNC’s came into picture. It is a talk about multinational
companies. Below companies were nowhere some 15 years ago, but the companies from developing
countries like Bharat forge and essel have become multinationals recently.

A historical context of global marketing:

It is very old in some sense and in some not so. China, India were trading some 2000 years ago and
colonial trading also took place in between India, Africa, china and imperial powers. East India
company was probably one of the biggest multi national in those times. But we will be talking about
post world war era. US and European companies developed lot of manufacturing capabilities after
world war. So, when the war was over, they thought what to do with extra production capabilities.
They started thinking about expanding to other countries and going global.

-Das & Poddar

 B2B-Session6-Prof. Subhashish Ray

International

Based in US, Innovate in US, once it is saturated in US it expands to other countries. Whether you
are selling in Brazil, Pakistan doesn’t matter if you are taking management and strategic decisions in
the same country.

Multinational

Once Gillette products were popular, they found out that a lot of products are getting sold outside, it
was only logical to create decision making in the partner countries as a subsidiary. There will be
broad strategy alignment between the countries and the HQ but they would work independently.

Trans-national

As this continued for some time, the next thing they realised is France & Germany may be different
in requirement, but does it require whole process to be different or they can share something like
transnational companies like a head quarter for Western Europe with local customization. The
question was to standardize 60-70% but rest customize the rest. The marketing may be different but
the product essentially stays same.

Global

In the mid-90s a Harvard prof, Mr, Ghosal found out that if they view the whole world as a single
market, where they can make it a global competency like china as a global manufacturing hub, for
R&D they may still be in US/western Europe. The logistics can be best addressed in Germany.

Not every company has to be global, its more of a strategy outlook. They needn’t or should not
transfer to Global.

International: All Key decision from home market

Multi-national: Key decisions shared with respect to different countries.
Global: Whole world as a single platform, centres of competency based on resource.

Brazil MNC: Petrobas

Russia: GrassProm,

-Das & Poddar

 B2B-Session6-Prof. Subhashish Ray

Companies enter a foreign market when they see:

1) Growth advantage (young pop, large pp, stable gov)

2) Integration advantage: Network of players: supply chain, logistics, marketing. question is can
the existing network be expanded, or it can help the expansion. Idea is to leverage the
current network to expand. From India it can be easily expanded/ or it can support for
Srilanka, Bangladesh etc.
3) Early days international companies when they went to global markets, they wanted to go to
markets which were similar in STP, brand love. etc. they were looking at sameness of home
country to new country. They will expand geographically. So, US to Mexico or Japan to
Korea. BCG tells that sort of similarity is less. If there is diversity in market, then a new
product can be taken there. BCG argues. That more than sameness Many-ness will work
better because of the
4) Resource access: What kind of resource am I trying to grow. Which country is going to
provide me with that growth
GE has a division called GE healthcare! It is one of One of the products is baby warmer. If a
baby is given premature birth, the baby warmer helps keeps the warmer. It’s a B2B product,
parents don’t buy, hospital buys it. Trigger 2 for GE to expand in India was to put a R&D
centre in India. Its not very often they open R&D in other countries. They realized that India
would need a India specific R&D. They asked whether they should adapt it. They asked
whether they can be product defeaturing to arrive at less cost. GE decided to build it for
India, buy Indians. They took inputs from every stake holders ike nurse doctor, designer etc.

Indian pool of innovative engineers, for a new market like rural health care. 30 years back the
international companies wont touch this because they were happy with what revenue was being
generated. When they see it is working in India, it might have potential in Peru, Pakistan, Nigeria and
other similar markets. This is known as reverse conceptualization. A product is now thought in
developing countries and then added up for poorer population in US/Western Europe.

-Das & Poddar

 B2B-Session6-Prof. Subhashish Ray

How do I enter these markets?

For most comp. the lowest risk/return is export import. If I want to sell in India from Italy, I will find
a trader in India. Management contracting is you taking charge of my brand, marketing,
manufacturing logistics and I will train you in know-how. The company is not there directly. Pierre
Cardin gave this management contracting to Flair. Waterman is a French writing brand, which has
given license to Luxor to manufacture. In strategic alliance, two companies come together for
developing something like Mahindra & Ford for EV. It is a strategic alliance. Joint venture has a legal
basis which is extra.

Huawei is facing unprecedented résistance from India, USA, UK, Australia. The issues are not about
technology or firm only, hence globalization may be cool but comes with a cost. A very Indian
company can also face political issues going global. The competitors may influence this also. This is
an act of buying time or taking time to match the external competitors and hence can be relaxed
when they have caught up.

Extended Notes

1) How to adapt baby warmers to large booming B2B market in Indian healthcare? (6 mins)
Ans: Taking an example:
GE Healthcare created Product development team that consisted on only Indian stakeholders
when they wanted to bring baby warmers into Indian market. Language was a big problem in
India. Display panel should not have any word but graphics. Developed a completely new
product for Indian market from scratch.

-Das & Poddar

 B2B-Session6-Prof. Subhashish Ray

2) What is the importance of labour to the type of value created in the product?
Ans: If labour component in overall value creation is low, then we have to choose to produce
that product in home country. But, if the labour component is very important in terms of cost or
value, then maybe we can look at markets like China.

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-Das & Poddar