Zurin Case

Sourcing in B2B Context

Sourcing is a strategic process where buyers select suppliers to create a competitive edge. It
focuses on:

1. Supplier Selection: Choosing suppliers that deliver optimal benefits or a combination of

benefits. This could include quality, reliability, or cost efficiency that aligns with the
buyer's needs.
2. Cost-Benefit Analysis: Ensuring the charges for the supplier’s offerings create value for
the buyer’s customers, ultimately enhancing profitability.
3. Collaboration: Establishing robust communication between buying and selling teams to
co-develop and refine solutions tailored to the buyer's evolving requirements.
4. Value Delivery: Delivering the promised benefits consistently, often requiring joint
efforts, such as co-creating solutions or sharing expertise.

Key Insights
Procurement decisions are not uniform and depend on the product's impact on the buyer's
organization. Fisher’s Model provides a framework to categorize purchases based on:

● Commercial Uncertainty: The level of market unpredictability surrounding the product.

● Product Complexity: The technical or logistical challenges involved in procuring or
integrating the product.
This segmentation guides procurement managers in deciding the nature of buyer-seller
relationships, such as transactional versus strategic partnerships.

Exercise
How do you convert a transactional relationship into a solution-based relationship?

● Identify mutual goals and explore areas for collaboration.

● Develop tailored solutions to meet the buyer’s specific needs.
● Foster trust through consistent value delivery and communication.

Brand Pipe Case

Segmentation in B2B
Segmentation involves dividing the market into groups of organizations with similar needs. This
helps tailor strategies effectively. Examples from Brand Pipe:

1. By Application/End-Use:
○ Plastic pipes for water transport, turf irrigation, or industrial needs.
○ Tinplate for battery cases, edible oil packaging, or crown caps.
 ○ DMC products for oil pumping, paper production, or mining industries.

Key Factors for Segmentation:

● Size of Segments: Assess potential market size for each application.

● Growth Potential: Analyze whether the segment is expanding or declining.
● Competition Dynamics: Understand the level of competition in each segment.
● Geography: Evaluate the segment's concentration regionally or globally.

Advanced Segmentation Considerations:

● Buyer Size: Larger buyers (e.g., industrial customers) may have resources like testing
facilities and require extensive support. Smaller buyers may demand simpler solutions.
● Technology Use: The type of equipment (e.g., automated or high-speed) may dictate
different product specifications.
● Purchasing Approach: Centralized versus decentralized procurement models.
● Buyer-Seller Relationships: Determine if interactions are transactional or involve
deeper partnerships.
● Order Types: Assess if orders are rush-based or planned.
● Buying Situations: Consider whether the purchase is a new task, a straight rebuy, or a
modified rebuy.

Outcome:
After identifying segments, companies must evaluate which to target based on alignment with
corporate goals. For Brand Pipe, segmentation highlighted losses due to:

● Inefficient product mix.

● High transportation costs.
● Frequent changeovers.

The solution involved targeting critical applications like potable water and turf irrigation while
focusing on profitable products like PVC pipes and customers in Washington.

Exercise
Segment the markets for the following companies:

● Indigo: Based on passenger demographics, travel frequency, and route preferences.

● Maersk: Segments by cargo type, shipping frequency, or customer industry.
● Google Cloud: Segments by business size, industry, or cloud service needs.

Key Account Management

What is a Key Account?

A Key Account refers to a strategically important customer that contributes significantly to a
company’s revenue, profitability, or market position. Key accounts require tailored strategies and
greater collaboration than standard accounts.

Differences Between Key and Regular Accounts:

1. Focus: Key accounts demand a long-term, partnership-driven approach, while regular

accounts may operate on transactional interactions.
2. Purchasing Scope: Key accounts may engage in single-sourcing, while others could
use multi-sourcing strategies.
3. Management Style: Key accounts have dedicated account managers responsible for
driving collaboration and fostering trust.

Challenges Faced in Key Account Management (Case of ABB and Caterpillar):

Dan Ahern, the Key Account Manager for ABB, failed to gather essential details on Caterpillar’s
sourcing strategy (e.g., single, dual, or multi-sourcing). Instead, he escalated tensions by
involving top management prematurely.

Skills Required for a Key Account Manager:

● Technical and Commercial Expertise: To understand the product’s applications and

benefits.
● Relationship Management: Build trust and transparency between buyer and seller.
● Conflict Resolution: Overcome internal and external resistance.
● Strategic Thinking: Align organizational goals with customer needs for mutual benefit.

Best Practices:

● Collaborate with multiple divisions to support the customer effectively.

● Align sales efforts with the customer’s long-term objectives.
● Develop a joint roadmap to evaluate opportunities and mitigate risks.

Exercise

1. How do you convert a large account into a key account?

2. If a procurement manager requests a quote based on specs that differ from your
capabilities, how would you respond to secure the order?

B2B Buying Process

Overview
B2B organizations buy goods/services to grow their businesses and serve customers. Their
decisions are influenced by external factors (e.g., government policies) and internal dynamics
(e.g., cross-functional requirements).
Key Concepts:

1. Buying Situations:

○ New Task: Buying for the first time.

○ Modified Rebuy: Re-purchasing with altered specifications.
○ Straight Rebuy: Routine, unchanged purchase.
2. Decision-Making Unit (DMU):

○ The group of individuals involved in the buying decision.

○ Roles include users, influencers, deciders, buyers, and gatekeepers.
3. Process Stages:

○ Awareness: Identifying a need.

○ Consideration: Evaluating alternatives.
○ Purchase: Selecting a vendor.

Insights (DMC Case)

Changes in external factors (e.g., tariffs) can shift decision-making power within the DMU. For
example, an electrical engineer in DMC gained influence due to tariff revisions, highlighting the
dynamic nature of B2B buying.

Exercise

1. What strategies can you use to retain an existing account?

2. How do you approach an account that currently doesn’t buy from you?
3. As a startup with limited resources, how do you convert a product into cash flow?

Pintura Case

Importance of New Products in B2B

New products fuel growth and ensure a company stays competitive. However, in B2B, they
require significant planning, including:

1. Rationale: Why is the product needed (e.g., market demand, revenue growth)?
2. Investment: What resources (financial and non-financial) are required?
3. Target Market: Which segments will benefit the most?
4. Marketing Mix: How will the product be positioned and promoted?
5. Cannibalization Risks: Will it affect sales of existing products?

Case of Pintura
Pintura’s water-based coatings initially targeted the furniture segment but faced growth
stagnation. Lessons included:
 ● Aligning product benefits (e.g., stain resistance, durability) with end-user needs.
● Stimulating consumer demand for features appealing to high-end markets.
● Developing backward strategies to drive adoption across the supply chain.

Key Learnings

● Types of New Products: New-to-market, new-to-company, or new-to-world.

● Planning: Secure management consent, develop prototypes, and create detailed
marketing plans.

Exercise

1. Propose new services Maersk could offer.

2. Suggest ways for Maersk to improve profitability or vessel turnaround.
3. Can Maersk create specialized container vessels for niche markets (e.g., airtight coffee
containers)?

Pricing in B2B

The Role of Value-Based Pricing

Price is not just a cost-plus margin; it reflects the value delivered to the customer. According to
Anderson, "Value" includes economic, social, service, and technological benefits.

Key Approaches to Pricing:

1. Cost-Plus Pricing: Focused on internal costs and corporate goals.

2. Value-Based Pricing: Centers on the value perceived by customers.

Case of Atlantic
Despite being junior, Jason aimed to implement a value-based approach. Challenges included
gaining buy-in from colleagues and management and aligning efforts to target the right
customers effectively.

Key Strategies:

● Identify customers who would benefit most from the product.

● Gain internal alignment and support for a unified sales approach.
● Involve senior personnel to assist in the first conversions.

Exercise

1. How do you calculate value for different customer segments?

2. Suggest methods to ensure successful implementation of a value-based pricing strategy.
DMC Case Analysis - Answers to Questions
Key Questions
Q1: What triggered the Buying Situation?
 The change in the political environment led to a change in tariff regulations for motors used
in oil-pumping applications.
Q2: How does the change impact buyers of motors for oil-pumping applications?
 The buying situation shifted from a Straight Rebuy to a Modified Rebuy, where customers
needed to review and evaluate product specifications for efficiency and cost-effectiveness.
Q3: Which customer stands to gain the most if they have a new product that yields the most
savings?
 Hamilton, as they buy more than 240 motors annually, representing 30% of the buying
potential.
Q4: Which stage of the Buying Process were Hamilton and others in their journey?
 Hamilton and others were in the upper part of the buying process, specifically in the
Modified Rebuy stage, where they were reviewing product specifications to adapt to the
new tariff environment.
Q5: Who are the participants at this part of the customer journey?
 Technical personnel, such as electrical engineers, were the key participants responsible for
evaluating product specifications.
Q6: Which customer has electrical engineering personnel?
 Hamilton is one of the customers that employs electrical engineering personnel.

Other Questions
Q8: Why was "Torque" chosen as the criterion for the right solution to save energy costs?
 Torque directly impacts motor efficiency, especially in oil-pumping applications where energy
savings are critical. Motors with higher torque can reduce energy consumption and meet the
new tariff regulations.
Q9: Which supplier has the maximum Torque?
 Spartan has motors with the highest torque capabilities, giving them a competitive
advantage under the new regulatory requirements.
Q10: Why did DMC not come to know of the tests being conducted by Bridges in October 1984 but
only in March 1985?
 Bridges likely did not inform DMC of the tests due to confidentiality and a desire to evaluate
other suppliers (like Spartan) independently before sharing the results. DMC's lack of
proactive engagement with customers also contributed to the delay in obtaining this
information.
Q11: As an in-supplier, what should sales personnel have done when they met Hamilton in
October 1984 to get the information that "Torque" was the criterion?
 DMC's sales personnel should have:
1. Proactively engaged Hamilton's technical personnel to understand their evolving
needs and priorities, especially given the new tariff changes.
2. Asked specific questions about evaluation criteria, such as efficiency, cost savings, or
performance metrics (like torque).
3. Provided consultative support by offering data on how their motors could meet new
requirements.
 4. Strengthened their relationship by conducting joint assessments or offering trials to
show their commitment to solving Hamilton's challenges.
As an out-supplier (like Spartan):
 Spartan effectively leveraged "torque" as their unique value proposition to highlight cost
savings and energy efficiency, positioning themselves to convert the Modified Rebuy into a
Straight Rebuy for their motors.

ManagingAccounts

B2B Marketeers , cannot communicate the same Value to Ignorant customers to that of the
knowledgeable customers . Once your product got qualified the sales person of DMC focussed on
the "user" of the product to ensure that the results of the product was realised.In other words in
the ignorant stage ,as a supplier you need to educate the user till he becomes well versed and gets
the output.Thus the emphasis is on functional benefits.

Once the operator knew how to use the product ,they dont need the suppliers support as they are
'Educated" and hence as an in supplier you need to convert the same customer to modified rebuy
lest the customer stagnates . Thus the supplier should have used their strength ( R&D) and improve
productivity with the same motor ( New Value or New Benefit ).With this you get Production
Manager and Marketing Manager to realise their goals.

Once that is achieved you now to move to reduce " Energy consumption costs" even before NEMA
announced their policy .This new Value would appeal to Bridges .Thus in Managing Accounts you are
constantly making your customer grow ( not stagnate) and if they dont they will be preyed upon by
competition . DMC never used their strength to grow their accounts .With relationships built with
user,production ,marketing and Electrical Engg you are increasing the " Switching Costs "
Managing Accounts thus is Managing relationships so there is free and fast flow of information
from customers to suppliers to solve their problem or exploit opportunities .

In Managing Accounts we learnt if the customer becomes knowledgeable he doesnt need the
supplier who just seeks repeat order.Thus suppliers shud bring new knowledge based on their
strength or develop new capabilities that enhance their current customers.If Customers become
stationery irrespective of them buying an Entering,Foundation or Facilitating Good pls dont expect
repeat orders.Secondly monitor the environment as that alter buying situation .

"Imagine if the government allows import of goods or services from China shud we not know how
we will be impacted .Which of the customers will make a switch and how do we retain .

Zurin Case
 Of the two suppliers to Zurin Ericsson and Gordier one of them increases their price by 3
times completely upsetting Zurins growth .How do we manage suppliers ?
Brand Pipe
 A loss making Plastic pipe manufacturer has been asked to develop a marketing
approach .The product is a commodity product .
Assignments can be submitted on line and here is what I want the group to be creative

The first blockage is the demand for your product or service doesnt orignate from your
customer.Example a charity hospital buys a CT Scan but poor patients footfall reduces to the charity
hospital as more number of smaller nursing homes have come up and they are charging less for the
scans .CT Scan provides a service and the good is a foundation good for which they need a return on
the investment or a payback to recover costs .The challenge therefore is " What are ways of
stimulating demand in B2B
 even take the case of DMC off season revenue short fall .This the real problem with derived
demand

B2B Marketing Framework: Impact of Key Factors on Choosing the Right Solution and Vendor
1. Environmental Factors
Environmental changes, such as regulations, tariffs, or economic shifts, can directly influence the
customer's buying decisions by altering their priorities or needs.
Example from DMC Case:
 The political environment led to changes in tariffs for motors used in oil-pumping
applications. This shift forced buyers to reconsider their existing motor specifications and
adopt solutions that aligned with the new requirements.
Impact on Choosing the Right Solution:
 Regulatory or environmental changes often compel buyers to evaluate energy efficiency, cost
savings, or technical compliance, making product specifications a critical factor in selecting
vendors.

2. Buying Situation
The type of buying situation—Straight Rebuy, Modified Rebuy, or New Task—determines how much
the customer is willing to review and adjust product specifications and vendor preferences.
Example from DMC Case:
 Buyers like Hamilton moved from a Straight Rebuy to a Modified Rebuy due to the need to
review motor specifications for compliance and cost savings.
 Vendors with better solutions (e.g., Spartan's high-torque motors) had the opportunity to
disrupt established buying patterns and win business.
Impact on Choosing the Right Solution:
 In a Modified Rebuy, buyers are open to considering new specifications and evaluating
alternative vendors. This is an opportunity for suppliers to differentiate themselves by
demonstrating superior product features.

3. Buying Process Stage

The customer's stage in the buying process—awareness, specification development, or decision-
making—dictates the approach a vendor should take.
Example from DMC Case:
 Hamilton was in the upper part of the buying process, reviewing motor specifications based
on torque and energy efficiency.
  DMC missed the opportunity to influence specifications early, while Spartan identified
"torque" as the key factor and used it to position themselves effectively.
Impact on Choosing the Right Solution:
 Vendors need to engage early in the process to influence product specifications. By aligning
solutions with the customer’s evolving needs, they can shape purchasing criteria to their
advantage.

4. Decision-Making Unit (DMU) Participants and Their Roles

The DMU consists of key participants like users, technical experts, and decision-makers, each playing
a role in evaluating and selecting solutions.
Example from DMC Case:
 Technical personnel, such as electrical engineers, were the primary evaluators of motor
specifications.
 Spartan targeted these personnel with their high-torque solution, effectively influencing the
DMU.
Impact on Choosing the Right Solution:
 Vendors must identify and engage the technical influencers in the DMU, providing data and
insights to demonstrate how their solution addresses specific customer challenges.

5. Scenario-Based Responses
Scenario 1: Customer has predetermined specifications and asks for a quote
 If specifications are predetermined, the customer is likely in a Straight Rebuy or the final
stage of decision-making.
 Action Plan:
o Provide a competitive quote but seek opportunities to differentiate your offering
(e.g., superior service, faster delivery, or additional features).
o Establish a relationship with technical personnel or decision-makers to influence
future purchases.
Example from DMC Case:
 DMC could have engaged with Hamilton earlier to understand the reasons behind their
specifications and highlighted areas where their motors offered added value.

Scenario 2: You have a better solution than the one the customer is using. Can you get them to
change specs?
 If your solution offers superior benefits, you can attempt to influence the customer to
consider a Modified Rebuy by demonstrating how your product better meets their needs.
 Action Plan:
1. Educate the DMU: Share technical data, case studies, or cost-benefit analyses that
demonstrate the superiority of your product.
2. Leverage key influencers: Engage technical personnel to highlight how your solution
aligns with their priorities (e.g., energy savings, torque, or compliance).
3. Position as a consultant: Offer free trials, audits, or demonstrations to show the
tangible benefits of switching to your solution.
Example from DMC Case:
  Spartan successfully shifted Hamilton to a Modified Rebuy by emphasizing torque as the key
performance metric and positioning their motors as the superior solution.
 DMC could have avoided losing ground by proactively addressing the customer’s evolving
needs instead of waiting for feedback.

Summary
The key to success in B2B marketing lies in understanding the customer’s buying situation, engaging
early in the buying process, and influencing the DMU with data-driven insights. By aligning your
solution with the customer’s priorities and demonstrating superior value, you can win business even
in competitive or predetermined situations.
Those who have no work experience in particular and wanted an easy way to remember the
challenges faced by a B2B Marketeer here are the answers

Challenge 1
 How do we stimulate demand for our goods and services because of the influence of derive
demand
Challenge 2
 Having identified the end product customer whose demand is growing and you may be an
entering,foundation or facilitating good supplier ,is the goods and services that you supply
important for the immidiate buyer ( impact on sales and profit example cleaning agent) then
who does one meet and what value need one propose to trigger a buying process
Challenge 3
 How do we get orders quickly ?
Challenge 4
 Once we get orders how do we ensure repeat orders and safeguard the customer from
making a switch or how do we get a new account to switch
Challenge 5 .Digitisation has nullified the information imbalance with buyers becoming more
knowledgeable .In such cases how does Marketeers get the power back and get theese
knowledgeable buyers to search for you

Key Account Management (KAM) in B2B Marketing

1. What is a Key Account?
A Key Account is a strategically important customer for a business, often contributing significantly to
revenue, profitability, or market influence. These accounts typically require a higher level of attention
and customization to maintain and grow the relationship.
Key characteristics of a Key Account:
 High purchase volume or revenue contribution.
 Strategic value due to brand reputation, market influence, or potential for growth.
 Long-term partnership potential.
 Complex decision-making processes requiring specialized solutions.

2. How Do We Choose an Account as Key?

The process of identifying Key Accounts involves evaluating multiple factors, such as:
1. Revenue Contribution:
 o Accounts that contribute a substantial portion of the company's revenue (e.g., top
20% of customers generating 80% of revenue).
2. Profitability:
o Accounts with higher profit margins or the potential to become profitable in the
future.
3. Strategic Fit:
o Accounts that align with the company's strategic goals, such as entering new markets
or building credibility.
4. Growth Potential:
o Accounts with opportunities for cross-selling, upselling, or expanding into new
geographies.
5. Customer Loyalty:
o Existing customers with strong relationships that can lead to recurring business.
6. Competitive Advantage:
o Customers whose partnership strengthens the company’s market position or
differentiates it from competitors.
Example in B2B Context:
A manufacturer of industrial machinery might consider a large oil and gas company as a Key Account
due to high volume purchases, long-term contracts, and the potential to influence other customers
in the industry.

3. Challenges Faced by a Key Account Manager (KAM)

1. Understanding Complex Customer Needs:
o Key Accounts often have unique and evolving requirements, demanding a deep
understanding of their business, industry, and goals.
2. Balancing Multiple Stakeholders:
o Managing relationships with diverse decision-makers and influencers within the
client organization (e.g., technical, procurement, and executive teams).
3. Delivering Customized Solutions:
o Developing tailored solutions while ensuring profitability and operational feasibility.
4. Intense Competition:
o Competing with other suppliers offering innovative solutions or lower prices.
5. Maintaining Long-Term Relationships:
o Continuously nurturing the relationship while demonstrating value over time.
6. Internal Coordination:
o Collaborating with internal teams (e.g., sales, marketing, R&D, and supply chain) to
deliver on customer commitments.
7. Performance Pressure:
o Meeting high revenue and profitability targets associated with Key Accounts.
8. Managing Expectations:
o Ensuring that the customer’s expectations are aligned with what the company can
realistically deliver.

4. Skills a Key Account Manager (KAM) Should Possess

1. Strong Communication and Relationship-Building:
 o Ability to build trust, maintain long-term relationships, and communicate effectively
with stakeholders at all levels.
2. Customer-Centric Approach:
o Deep understanding of the customer's business, challenges, and goals to deliver
tailored solutions.
3. Strategic Thinking:
o Ability to identify growth opportunities, align account strategies with business
objectives, and anticipate future customer needs.
4. Negotiation and Influencing:
o Strong negotiation skills to secure profitable contracts while maintaining a
collaborative partnership.
5. Analytical and Problem-Solving:
o Proficiency in analyzing data, identifying trends, and providing insights to add value
to the customer’s business.
6. Project Management:
o Coordinating cross-functional teams to ensure timely delivery of products or services.
7. Technical and Industry Knowledge:
o Understanding the customer’s industry and technical requirements to provide
relevant solutions.
8. Adaptability and Resilience:
o Ability to navigate changes in the customer’s business environment or market
dynamics.

Example in Market Analysis

a) Size of the Market Volume and value helps of the money being spent and the volumes being
procured
b) How much of that money are we getting and from which type of customers is important to know
c) Is the Market Growing Stagnant etc is to be known as the approach will differ based on the
Markets growth ,stagnation
d) Post the test shud DMC focus on large Accounts or Small Accounts
e) Which Type of Customers are more vulnerable to a shift once they become knowledgeable ( Large
or small accounts )

Buying of Motors

This is important as every purchase has a process starting with a "Trigger" ,participants in Product
qualification and Vendor qualification . If as an "in supplier DMC were to call on Hamilton when
Hamilton is knowledgeable what should DMCs sales personnel have done

Zurin Industries – Air and Gas Compressor Division (A)

1st Group Questions
a) Key Issue in the Case:
  Whether Ericsson should be retained as a supplier despite ongoing delivery and quality
issues.
b) Facts Supporting the Key Issue:
 Delivery Delays: Ericsson consistently fails to meet delivery deadlines, causing disruptions in
production schedules.
 Quality Issues: Several batches of components supplied by Ericsson do not meet Zurin's
specifications.
 Dependency: Ericsson supplies critical components that are hard to replace immediately.
 Rising Costs: Delays and rework are increasing operational costs for Zurin.
c) Should Ericsson be dropped?
 Not immediately, as Ericsson supplies critical components, but Zurin should explore
alternatives while pressuring Ericsson to improve quality and delivery performance.

2nd Group Questions (Team-3)

d) What Does Ericsson Bring to the Party?
 Technical Expertise: Ericsson has the capability to produce specialized components required
by Zurin.
 Established Relationship: A long-term supplier relationship offers some stability.
 Custom Solutions: They understand Zurin’s specific requirements.
e) Should We Look for a New Supplier?
 Yes, Zurin should start identifying potential alternative suppliers to reduce dependency on
Ericsson while negotiating better terms for immediate improvements.
f) Where Does the Problem Lie—Ericsson or Zurin?
 Ericsson’s Responsibility: Delivery delays and quality issues.
 Zurin’s Responsibility: Poor supplier management and lack of contingency planning.
g) Recommendations:
1. Short-Term: Work with Ericsson to resolve current quality and delivery issues.
2. Mid-Term: Start identifying alternative suppliers for critical components.
3. Long-Term: Develop a robust supplier evaluation and management process.

Brand Pipe Company

1st Group Questions
a) Key Issue in the Case:
 Brand Pipe is facing losses due to poor market positioning and ineffective segmentation
strategies.
b) Why is Brand Pipe Making Losses?
 Undifferentiated Approach: Targeting broad markets without understanding specific
customer needs.
 Price Sensitivity: Competing on price rather than value.
 Operational Inefficiencies: High production costs and low profitability.
c) Which Markets is Brand Pipe Targeting?
 General Construction Industry: A highly competitive and price-sensitive market.
 Municipal Infrastructure Projects: Where competition is intense, and Brand Pipe has limited
differentiation.
d) Who Are the Competitors in the Chosen Market?
  Large Players: Established companies with economies of scale and lower costs.
 Local Manufacturers: Offering lower prices and quick delivery.

2nd Group Questions (Team-5)

e) What is Market Segmentation?
 Market Segmentation is the process of dividing a market into distinct groups of buyers based
on common needs, characteristics, or behaviors to tailor marketing strategies.
f) What Are the Ways of Segmenting B2B Markets?
 Macro Segmentation: Based on organizational characteristics such as:
o Industry.
o Company size.
o Geographic location.
 Micro Segmentation: Based on specific buying behavior or decision-making units, such as:
o Buying criteria (price, quality, service).
o Purchasing process (centralized vs. decentralized).
o Relationship expectations.
g) What Should Brand Pipe Do?
1. Refine Segmentation: Focus on markets where Brand Pipe can differentiate based on quality
or service (e.g., niche infrastructure projects).
2. Improve Positioning: Develop a value-based strategy rather than competing on price alone.
3. Operational Improvements: Streamline production to reduce costs and improve margins.
4. Target Key Accounts: Build strong relationships with large, repeat customers in specialized
markets.
ManagingAccounts/Suppliers

KnKnowledgeable customers are a challenge to manage if they are currently buying from us as they
could choose other options ,evaluate and switch .As buying cycles are long ,Managing Accounts
would mean converting your own accounts from straight rebuy to modified rebuy using your
strengths.A Organisation customers wants to grow and not stagnate .Retention of large buyers with
their own resources and skills are the most challenging to retain
2.Managing Suppliers for critical products require the buyer to keep the suppliers providing the skills
and resources to be motivated .If the Buyers grows and suppliers dont grow relationshsip strain does
take place .The Case we did today introduces us to a few concepts

Takeaways from DMC

.Managing B2B Customers involves getting a steady and increased source of revenues and we
learnt that when the Markets enter the growth stage and custsomers become knoweldegable
thru repeat purchase ,it is the large Accounts having their own skills and resources which shifts
loyalty and takes risk .Small Accounts having limited resources buy from branded suppliers .
Thus we asked a number of questions to also know how we evaluate options and why we did not
get information on time when the large Account decided to test motors to save costs

Takeaways from Zurin

 Managing suppliers of critical products require a open and transparent relationship with multiple
linkages to grow each others business .There was no transparency in the relationship between
Zurin
Ericssion .Zurin required 3 skills to register a competitive advantage and ERicssion needed a
customer
whose growth strategy was thru New Product Development .We learnt Sourcing , and what the
Sourcing Mix and Maketing Mix overlaps indeed make the best choices for buyer seller relationships
Types of relationships, single ,dual ,multisourcing were discussed too

1. Sourcing and How It Is Different from Buying

Sourcing:
 A strategic process of identifying, evaluating, and building relationships with suppliers to
procure goods or services that align with business goals.
 Focuses on long-term partnerships, supplier quality, and cost optimization.
 Often includes evaluating suppliers’ technical capabilities, compliance, and innovation
potential.
Buying:
 A transactional process of acquiring products or services to meet immediate needs.
 Focuses on price and availability rather than long-term relationships.
 Typically involves routine or operational decision-making.
Difference:
 Sourcing is strategic and relationship-focused, while buying is transactional and operational.

2. Sourcing Process and Its Linkage with the Growth Strategy

The sourcing process directly supports a company's growth by ensuring:
1. Cost Efficiency: Lower procurement costs improve margins and fund growth initiatives.
2. Innovation: Strategic suppliers can offer cutting-edge solutions or co-develop new products.
3. Supply Chain Resilience: Reliable sourcing minimizes disruptions and ensures consistent
delivery to meet market demand.
4. Market Penetration: Sourcing from local suppliers helps in entering and scaling in new
geographies.
5. Sustainability Goals: Aligning sourcing with environmental and ethical practices enhances
brand reputation, attracting more customers.
Steps in the Sourcing Process:
1. Identifying business needs.
2. Supplier market research and identification.
3. Request for proposals (RFP) and supplier evaluation.
4. Supplier selection and contract negotiation.
5. Performance monitoring and relationship management.
Example: Zurin could align sourcing strategies with its growth by sourcing innovative components
(via R&D partnerships) while ensuring price versatility for competitive markets.

3. Scenario Building
Scenario Building:
  A method of forecasting future events by creating multiple plausible scenarios based on
current trends, uncertainties, and external factors.
 It helps in preparing sourcing and marketing strategies under varying market conditions.
Example in Sourcing:
 Zurin could build scenarios for:
1. Supplier Risk: Assessing the impact of Ericsson failing to improve performance.
2. Market Dynamics: Preparing for fluctuations in raw material prices or regulatory
changes.
How It Helps Growth Strategy:
 Identifies risks and opportunities in advance.
 Improves decision-making under uncertainty.
 Ensures proactive supply chain resilience.

4. Sourcing and How It Is Linked to Marketing

Sourcing and Marketing Linkage:
 Marketing depends on sourcing for delivering value propositions like price, quality, and
innovation.
 Sourcing impacts:
1. Product Differentiation: High-quality inputs or unique components create
competitive products.
2. Pricing Strategy: Efficient sourcing reduces costs, enabling competitive pricing.
3. Brand Positioning: Ethically sourced products align with sustainability-focused
marketing.
Example:
 Zurin can market its compressors as reliable and innovative by sourcing high-torque
components from trusted suppliers.

5. Relationship Types: Transactional to Collaborative

Types of Relationships:
1. Transactional:
o Short-term, price-focused, low collaboration.
o Example: Commodity suppliers.
2. Partnership/Collaborative:
o Long-term, value-focused, high collaboration.
o Example: Co-developing innovative components with suppliers.
Transition from Transactional to Collaborative:
 Shift requires trust-building, shared goals, and mutual investments (e.g., joint R&D or cost-
sharing agreements).

6. Meaning of Switching Costs

Switching Costs:
 The costs incurred by a customer or company when changing from one supplier/product to
another.
Types of Switching Costs:
1. Monetary: Termination fees, price increases.
 2. Time/Effort: Effort required to identify, evaluate, and onboard new suppliers.
3. Relational: Loss of trust or rapport with the existing supplier.
4. Performance: Risk of quality or performance issues with the new supplier.

7. How to Increase and Decrease Switching Costs

How to Increase Switching Costs:
1. Custom Solutions: Offer tailored products that are difficult to replicate.
2. Service Integration: Provide value-added services, e.g., maintenance contracts.
3. Data Dependency: Use proprietary software/tools that integrate deeply with the customer’s
operations.
4. Strong Relationships: Build trust and long-term partnerships.
How to Decrease Switching Costs:
1. Standardized Products: Simplify switching by using industry-standard designs.
2. Incentives: Offer onboarding discounts or flexible terms to attract new customers.
3. Trial Programs: Allow customers to test products before fully committing.

8. Zurin’s Competitive Skills: R&D, Price Versatility, and Security

For Zurin to remain competitive:
1. R&D:
o Innovate new technologies to differentiate products (e.g., energy-efficient
compressors).
o Stay ahead of competitors like Spartan by improving torque performance.
2. Price Versatility:
o Offer competitive pricing while maintaining profitability through cost-efficient
sourcing.
o Customize pricing based on customer segments (e.g., premium vs. cost-sensitive
markets).
3. Security:
o Strengthen supply chain resilience by diversifying suppliers and reducing
dependency on Ericsson.
o Ensure consistent delivery to meet customer expectations.

Summary
Zurin can align its sourcing strategy with growth goals by fostering collaborative relationships,
leveraging R&D for innovation, and improving supply chain resilience. To achieve competitive
advantage, it must balance cost-efficiency, innovation, and customer-centricity while preparing for
market uncertainties through scenario building and effective marketing collaboration.
The three types of buying situations and the supplier status shud be known for your placement and
so also you know how to choose markets that best meets customers goals.LIke Brand Pipe wanted to
eliminate losses and they had seven lines so this indeed would influence the target that you
choose .Thats is why we say the three criticial functions of a marketeer to know how to choose the
right market ( thru segmentation and targeting)
and differentiate your oferrings in the chosen market from competition.This if we wish to be be the
lowest price supplier and fastest in delivery ( 2 key differentiators) what shud we have done .I
mentioned the " Mantra" of a loss making company .This may not be feasible that we buy on credit
and seek payments for our products so what could we do .

Segmentation

Market Segmentation is about partitioning Organisational buyers based on the " Needs" they have .
Organisational buyers vary from each other based on what they are going to use they are going to
put the product to . In Brand Pipe some Organisational buyer use the Plastic pipe for Irrigating
Agricultural land .These needs vary from those who buy Plastic Pipe for potable water and likewise
there were 11 different needs for which Organisational Buyers use Plastic Pipes for .

Each Segment or Buyers who buy it for attaining the same end result should be
measurable,substantial and accessible .Thus we measure the value , or all buyers buying the pipe for
a similar outcome how much do they spend YOY and the growth rate apart from the competitiors in
each segment .

The challenge is which criterias to use to further segment and then choose the right target wherein
Brand Pipe becomes the preferred supplier .

What does Brand Pipe want ?

Eliminate Losses - for this we have to identifiy the source of losses like 7% excess consumption
of resins, stop changeovers, save the 15% transportation cost , look at products which make
profitsLoad all the 7 lines Load them with products that have large volumes
Having done this we turn our attention to the 4 Ps to see who we can implement without incurring
costs

Learning

Needs can vary on a number of crierias but "Needs " shud be different .Like Organisations having
Centralised Purchase will have different needs as opposed to decentralised ,those who have just
entered the market ( Buying Situations) ,those who use diffferent techcnologies in making their
product
and the people in the DMU who participates thus selecting the criteria for purchase .

We dont have to use all segmentation bases in the Nested Approach or as given by the Macro or
Micro but without datas we cannot segment markets

Tinplate learnings:
Marketing in Emerging markets needs to factor implmentation issues that we discussed in the
Tinplate case .
Following the uniformity of customs duty from differntial duty ( Prime and Secondaries) Edible oil
from wjere Tinplate was drawing revenues from got impacted the most .Immunity lied in choosing
a) Market which are Metal Dominant
b) Have automated Foundation Goods so that Prime Tinpate would be used even if it be non food
like Battery
c) supply to Global brands

Change in the Environment ( drop in duty) also showed how Crown Caps where Tinplate had market
leadership was taken by surprise wherein new Tinplate suppliers got the specs chnaged by
approaching new entrant Global brands .The specs disqualified Tinplate .This is the gist of the
discussion we had

In Tinplate case demand stimulation was done by late entrants who defined " Fizz" and linked it to a
feature in the manufacturing process by going to the two large global brands who Tinplate did not
access.
Each segment required a different Tinplate ( enetring good) and a different Foundation Good .The
Equipment for battery casings cannot be used for making Cans for Packaging Processeed Food

Marketing Strategy in Emerging Economies – Tinplate Case

1. Where Does Tinplate Get Their Revenues From?
 Tinplate India generates revenues primarily from:
o Domestic Demand: Used in packaging for processed foods, beverages, and paints.
o Export Markets: Global markets with higher demand for packaging materials.
2. Which Markets Should Tinplate Choose (Target) and Why Given the Government's Lack of a
Regulatory Framework?
 Target Markets:
o Food and Beverage Industry: Growing demand for packaged foods in emerging
economies.
o Paints and Chemicals Industry: Industries requiring corrosion-resistant packaging.
o Export Markets: Export to countries with better regulatory frameworks and demand
for tinplate.
 Why Target These Markets?
o Lack of government regulation in India impacts domestic growth, making export
markets more attractive.
o Untapped domestic demand in segments where tinplate's properties are critical
(e.g., food safety).
3. What Differentiates Marketing Goods and Services in Developed Economies from Emerging
Economies?
 Developed Economies:
o High focus on branding, differentiation, and quality.
o Customers are price-insensitive, favoring value-added products.
o Regulatory compliance and environmental sustainability drive innovation.
 Emerging Economies:
o Customers are price-sensitive; affordability is critical.
o Infrastructure challenges can limit supply chains.
 o Lower brand loyalty; decisions often influenced by cost or availability rather than
brand differentiation.

Key Account Management – ABB & Caterpillar Case

1. What Is a Key Account?
 A Key Account is a high-value customer that contributes significantly to a company's revenue
and strategic growth.
 Key accounts typically require customized solutions, consistent engagement, and long-term
relationship management.
2. Is Caterpillar a Key Account Going by the Definition?
 Yes, Caterpillar qualifies as a key account for ABB:
o Caterpillar is a global leader in its industry and has a significant demand for ABB’s
products and services.
o The relationship has potential for mutual long-term value creation.
3. What Should Dan Ahern Do When Appointed as a Key Accounts Manager?
 Build Relationships: Establish trust and rapport with Caterpillar's decision-makers.
 Understand Needs: Gain in-depth knowledge of Caterpillar’s business, pain points, and goals.
 Develop a Custom Strategy: Align ABB’s offerings to Caterpillar’s specific needs.
 Coordinate Internally: Work with ABB’s teams to ensure seamless service delivery and
responsiveness.
4. What Are the Challenges Faced by a KAM?
 Resource Allocation: Balancing resources for key accounts without neglecting smaller
customers.
 Complex Decision-Making: Handling multiple stakeholders in the customer’s organization.
 Performance Pressure: Delivering consistent results while meeting revenue targets.
5. Did Dan Ahern Possess the Skills?
 Dan had strong relationship-building skills and industry knowledge, but he needed:
o Better internal coordination to align ABB’s teams.
o Improved strategic planning skills to handle long-term account growth effectively.

Pintura Corporation – The Lena Launch Decision

1. What Is a New Product?
 A new product is an offering that is significantly different from existing products in terms of
features, benefits, or technology.
2. Types of New Products and Where Does Powder Coating Fall Under?
 Types of New Products:
1. New-to-the-World Products.
2. New Product Lines.
3. Product Improvements.
4. Repositioned Products.
 Powder Coating: Falls under new product lines because it introduces a novel technology
compared to Pintura's existing offerings.
3. What Are the Challenges a B2B Marketing Manager Faces in Getting a New Idea Approved and a
New Product Launched?
 Internal Resistance: Convincing stakeholders of the product’s potential.
  Budget Allocation: Securing resources for development and marketing.
 Market Uncertainty: Estimating demand and ensuring customer adoption.
4. What Was the Reason for Pintura to Launch the New Product?
 Strategic Reason: Capture new market segments and differentiate from competitors.
 Market Need: Address increasing demand for environmentally friendly and cost-efficient
coating solutions.
5. Which Market Would Benefit the Most?
 Industrial Applications: Markets where powder coating can provide durability, cost savings,
and environmental benefits (e.g., automotive and appliances).
6. What If the Market Was Already Using an Existing Product of Pintura—Wouldn't It Cannibalize
Sales?
 Cannibalization is possible, but:
o The new product can help capture customers shifting to greener technologies.
o Premium pricing for powder coating could offset revenue loss.
7. What Should the Marketing Mix Be for the New Product?
 Product: Focus on performance, environmental benefits, and durability.
 Price: Penetration pricing for industrial customers to encourage trial adoption.
 Place: Target distributors in high-growth industrial areas.
 Promotion: Emphasize environmental compliance and cost savings in B2B communications.

Summary
For Tinplate, targeting export markets and high-value domestic niches can address regulatory
challenges. ABB’s case shows the importance of strategic KAM practices to manage key accounts like
Caterpillar effectively. Pintura’s Lena product launch highlights the need for targeted marketing,
innovation-driven positioning, and managing potential cannibalization risks.

Pinturapoints:
a) Ideas and how they are evaluated .As every product has a life cycle marketeers need to have ideas
in their pipeline for converting into Products .To qualify an idea as good what are the determinants ?
b) Products may be new to the company to the market or new to the World
c) Here the product was new to the Market and the objective was to increase sales by 5% and also
demonstrate Technology leadership based on the strength .
d) New Products in B2B require investment and hence Managment consent or involvement will be
there and in this case to attain the objective the requirments
are 1.The chosen Target Market and why ?
2.The Marketing Mix

A New Product if it appeals to all the constuents from the end consumer to the dealer to the
manufacturer ,demand will be stimulated with different value propositions .The first product
adoption is " key " and then if there is Relative advantage, compatability ,complexity ,trialability and
obserbality the diffusion will take place.In this case the stumbling blocks were the following

a) Trialibility
b) Observability
Markets chosen were (High end Furniture and Other words) which were less price sensitive and
adopted water coatings when they were launched .Technical application sales people are required in
select customer premises to train user of water based coatings ( Communication and Distribution) to
beg shud be selective distribution .Communication shud be thru outbound marketing ,trade
magazines after the first adoption is done .Distributors shud be the same 300 as they will gain access
to new markets .Cannabilisation of Water will not have any impact as profits are made thru improved
productivity and less wastage.Competitors using water could be targeted .No warranty and
Guarantee is required so long as diffusion is allowed to be slow ( as there is protetcion) .Branding
shud be of having Pinturas name - Lena from Pintura)

In Pintura we learnt that demand stimulation requires a New Product to address each member of the
chain with their set of benefits and the Powder will stimulate demand for furniture makers who
despite adopting the water based coating to respond to environmental issue found it difficult in
application ( mess on the shopfloor,takes longer to dry and hence loss of productivity .They will be
reluctant to adopt Powder so we worked backwards from the high end furniture maker and created a
market for the high end furniture maker addresses concerns of production ,marketing and a new
revenue stream for dealers who cna recoat the old furnitures sold from their showrooms.

IR Questions – Ingersoll Rand: Managing Multiple Channels (1985)

a) Which Channels Should Be Used for Centac 200?
The Centac 200, a highly technical and expensive product, should utilize specialized direct sales
channels and industrial distributors to ensure proper market coverage and effective customer
support:
1. Direct Sales Team:
o Best suited for large industrial customers or utilities that need a high level of
customization, technical expertise, and post-sales support.
o Provides control over pricing, customer relationships, and the ability to handle
complex negotiations.
2. Specialized Industrial Distributors:
o Cater to medium-sized companies or smaller industrial customers who might not
justify a direct sales approach.
o Distributors can help expand market reach in less accessible regions.
3. Service Dealers:
o Dealers with expertise in installation and maintenance can support Centac 200 by
providing after-sales services, which are critical for high-value products.
Recommended Channel Strategy:
 Use direct sales teams for high-value, strategic accounts.
 Leverage distributors and dealers for mid-tier and regional customers to scale operations
without adding significant direct costs.

b) How Will a Company Manage Multiple Channels and Avoid Conflict?

Managing multiple channels effectively requires a structured strategy to minimize overlap and foster
collaboration:
1. Channel Segmentation:
o Clearly define roles and responsibilities for each channel.
o Example: Direct sales handles large accounts, while distributors focus on mid-sized
businesses.
2. Avoiding Price Overlap:
o Implement transparent pricing policies to avoid channel conflict over pricing
discrepancies.
o Provide different pricing structures or margins for distributors and direct channels.
3. Territorial Assignments:
o Allocate specific geographical areas or customer segments to each channel.
o Example: Assign direct sales to strategic accounts in high-revenue areas and
distributors to broader, less profitable regions.
4. Performance Incentives:
o Offer channel-specific incentives to align goals with the company's priorities.
o Direct sales teams might get bonuses for closing large deals, while distributors could
earn volume-based incentives.
5. Centralized Communication:
o Use a centralized CRM system to track customer accounts and avoid duplicate
efforts.
o Promote transparency and collaboration among channels.
6. Conflict Resolution Mechanisms:
o Set up a formal process to address conflicts quickly.
o Example: If both direct sales and a distributor approach the same customer,
prioritize the channel with established expertise or better reach.
By carefully managing roles, pricing, and territories, Ingersoll Rand can effectively deploy multiple
channels for the Centac 200 while reducing potential conflicts.

Summary
For the Centac 200, a combination of direct sales and specialized distributors works best to balance
control and market coverage. Managing multiple channels requires clear segmentation, pricing
transparency, and strong communication systems to minimize conflicts and optimize efficiency.

Must Knows – Understanding Organizational Buying Behavior (B2B Context)

Let’s take ABB (Asea Brown Boveri), a leading multinational corporation in power and automation
technologies, as the example organization for this assignment.

a) Why Do Organizations Buy?

Organizations buy products and services to achieve business objectives and address specific needs
such as:
1. Operational Efficiency:
o ABB buys raw materials, components, and services to ensure smooth production
processes (e.g., buying semiconductors for automation systems).
2. Cost Reduction:
 o Procurement decisions often focus on reducing operational or long-term costs (e.g.,
energy-efficient components).
3. Growth and Expansion:
o ABB buys technology, partnerships, or software to enter new markets or improve
existing product offerings (e.g., acquiring AI-based energy management tools).
4. Compliance and Regulations:
o Purchases driven by the need to meet environmental or industry regulations (e.g.,
sustainable energy solutions).
5. Innovation Needs:
o ABB buys R&D tools or partnerships to maintain a competitive edge and deliver
innovative solutions.

b) When Do Organizations Buy?

Organizations buy based on various triggers and timings:
1. New Projects or Initiatives:
o ABB purchases components when launching new products or solutions (e.g., building
a new smart grid system).
2. End-of-Life Replacement:
o Equipment or systems that reach the end of their lifecycle trigger purchases (e.g.,
replacing outdated robotics systems).
3. Problem Resolution:
o Organizations buy when an operational challenge arises (e.g., supply chain
disruptions leading to emergency sourcing).
4. Seasonal Demand:
o In industries like construction or energy, purchases may align with seasonal demand
(e.g., increased equipment purchases for winter power grids).

c) How Do Organizations Buy?

Organizations typically follow a structured buying process, involving multiple stakeholders:
1. Identifying Needs:
o ABB identifies specific needs (e.g., energy-efficient transformers for a customer
project).
2. Information Search:
o ABB’s procurement team researches potential suppliers, reviews proposals, and
evaluates solutions.
3. Proposal Evaluation:
o Technical, financial, and operational criteria are used to shortlist vendors (e.g.,
pricing, quality, and post-sale service).
4. Decision-Making:
o Cross-functional teams, including engineers, procurement specialists, and finance
teams, approve the purchase.
5. Negotiation and Purchase:
o Contract terms, pricing, and delivery timelines are finalized.

d) What Makes an Organization Consider a Switch?

An organization like ABB may consider switching suppliers or solutions based on:
1. Cost Issues:
o If a current supplier becomes too expensive.
2. Poor Performance:
o Suppliers failing to meet delivery timelines or quality standards.
3. Technological Advances:
o Switching to more advanced or innovative solutions for better efficiency (e.g.,
adopting IoT-enabled devices).
4. Relationship Issues:
o Lack of support or communication from a vendor may prompt ABB to seek
alternatives.
5. Regulatory or Sustainability Needs:
o ABB may switch to eco-friendly suppliers to align with environmental goals.

e) What Could Be the Ways to Communicate and Trigger an Organization’s Buying Process?
In B2B marketing, communication needs to align with the buying journey stages:
1. Awareness Stage:
 Objective: Make the organization aware of the solution.
 Tactics:
o Industry events or trade shows (e.g., ABB hosting an automation expo).
o Whitepapers, blogs, or case studies on relevant challenges (e.g., energy efficiency).
o Digital ads targeting specific industries.
2. Consideration Stage:
 Objective: Provide detailed insights and position your solution as the best option.
 Tactics:
o Product demonstrations or webinars for ABB's procurement and technical teams.
o Personalized communication highlighting benefits (e.g., ROI calculators).
o Testimonials or success stories from similar organizations.
3. Purchase Stage:
 Objective: Simplify the decision-making process and close the deal.
 Tactics:
o Competitive pricing and clear contracts.
o Providing case-specific technical documentation.
o Flexible payment or financing terms.
4. Repeat Purchase Stage:
 Objective: Retain the customer and foster loyalty.
 Tactics:
o Dedicated account management and proactive service support.
o Offering upgrades, maintenance, or bundled solutions.
o Periodic check-ins to ensure customer satisfaction.

Summary
Understanding organizational buying behavior helps companies like ABB anticipate client needs,
improve targeting strategies, and foster long-term relationships. By focusing on structured buying
processes, triggers, and tailored communication, companies can create meaningful engagement
throughout the buyer journey.

The following are the topics covered integrating cases ,lectures and applications
Challenges a B2B Marketeer faces in stimulating demand Managing Accounts - concepts of a Buyer
chooses products/services features and
the vendors ( DMC case)Managing Suppliers - suppliers are classified too as per their importance to
the buyer
and thus the right type of Buyer- Seller Relationship chosen leading to transactional or
a more closer relationship - concepts like Sourcing was discusssed using ZurinSegmenting ,and
Targeting and in B2B -using Brand Pipe .Concept of Value proposition which is Benefit - Cost relative
to competition was discussed .How to write a Value Propsition and shareit will functional areas were
then shared - case Brand Pipe Product Development and Managment in B2B - using Pintura
was discussed Atlantic Computers - challenges in implementation of Pricing Strategy to be
discussedChannel design and Channel Managment - Ingersoll Rand discussed Asclepius Consulting -
B2B Selling Digital Marketing in B2B and how the challenges are now tackledBecton Dickenson -
Comprehensive Case involving all topics

Zurin -Takeaways

This is for IIM Trichy class room and not for circulation .I dont want anyone to be stressed so I will do
my best in writing key takeaways

Zurin Case

1.Sourcing a term used in B2B is a process used by the Buyer in choosing a suppliers capability in
securing a competitive advantage .

2.Sourcing is thus the opposite of Marketing and involves

Choosing the supplier who can provide the right benefit or combination of benefitsCharges for those
benefits which deliver value to their Customers and hence profitsCommunicates with Buying/Selling
Team in developing ,modifying solutions from time totimDelivers the " Value "communicated many a
time working together
3.Not all products or services Organisations buy impact the Buying Organisations top/bottom line
thus
procurement manager or companies decide on the type of Buyer - Seller relationships to pursue by
segmenting the purchases into commercial uncertainty and product complexity ( Fishers Model)

Exercise Question - How do you convert a transactional relationship to a solution based relationship?

Brand Pipe
Segmentation - a process of grouping Organisations based on having similar needs .There are many
ways if breaking up the total market.

Example by application or end use .In Brand Pipe the plastic pipes could be used for transporting
water , turf irrigation etc .In Tinplate we saw it can be used for making battery cases , Edible oil .In
DMC it can be used by the Oil pumping industry , paper industry or mining etc .Having segmented by
use we look at the size of each segment ,the growth ,the nature of competition and perhaps their
location in the Indian/Global map .

This is the first part where we see needs are different as the entering goods may wary in specs
( Tinplate used for making battery will not be the Tinplate for Edible oil,or CRown caps ,likewose for
electrical motors.The Foundations goods to convert the entering goods to the final product may also
be different and so may be some of the facilitating goods .

Now we can further segment markets if needs of

Large Buyers having their own resources differ from small buyers as in DMC -large buyers have their
own testing facility , need more extensive support and may require some one from the supplying
company to be present as they are both producing and refining unlike small companies
( Here again we follow the size of these submarkets or segments to decide if this shud be treated as a
segment ) Technology used - The Foundation Good that is used ( automated lines or high speed may
require
different features of entering goods may change)Purchasing Approach - Centralised vs
decentralised Buyer - Seller Relationships ( Transactional or very close ties) Rush orders or planned
order New Task vs Straight Rebuy
Thus there are many bases but the above show the Organisational characteristics but in each
segment comprising of several organisation with similar unmet needs we need to study the stage of
the Buying Journey ,the participants and the personas ( role and responsibiltiies in other words to
articulate the message which meets the functional,social and emotional needs of the person

After getting a clear picture of the different segments we target or choose the segment which helps
us reach our Corporate Goals.Example in Brand Pipe we were making losses and the losses were due
to
Change overTransportation costs Wrong Product Mix

Thus we targeted those segments where the pipe was critical ( Turf Irrigation where games are
played) ,potable water and used PVC ( profitable product) and customers located in Washington
( geography)
Based on the above we designed the Value Proposition and the Marketing Mix

Exercise - Segment the markets for the following companies ,Indigo,Maersk, Google Cloud ,?

Exercise 1: How do you convert a transactional relationship to a solution-based relationship?

To convert a transactional relationship into a solution-based relationship:
 1. Understand the Customer’s Business Challenges:
o Invest time in understanding the pain points, growth goals, and processes of the
buying organization.
o Example from Zurin: Instead of just fulfilling orders, focus on how your solution can
help customers like Ericsson improve efficiency or reduce costs.
2. Provide Tailored Value Propositions:
o Design customized solutions that address specific business needs.
o Example: Offer bundled services such as technical support, maintenance, or co-
development of products.
3. Engage in Joint Problem-Solving:
o Collaborate with the buying team to modify or co-create solutions that deliver better
outcomes.
4. Build Trust and Demonstrate Expertise:
o Invest in long-term relationship-building by consistently delivering on promises and
proving reliability.
o Example: Help customers mitigate risks in sourcing by offering quality guarantees.

Exercise 2: Segment the markets for the following companies

1. Indigo (Airline Industry)
Segmentation Basis:
 Business vs Leisure Travelers:
o Business travelers seek frequent flights, on-time performance, and convenient
schedules.
o Leisure travelers prioritize cost, comfort, and travel destinations.
 Geographic Segmentation:
o Regional flights (domestic travelers).
o International flights (frequent travelers to major hubs).
 Price Sensitivity:
o Budget travelers who opt for economy class.
o Premium travelers who seek add-on services like extra legroom and lounge access.

2. Maersk (Shipping and Logistics Industry)

Segmentation Basis:
 Industry Needs:
o Retail: High-volume shipments requiring cost-effective bulk transport.
o Pharmaceuticals: Temperature-controlled logistics.
 Company Size:
o Large enterprises with global supply chains (e.g., FMCG companies).
o Small businesses needing occasional shipping solutions.
 Geography:
o Import/export-focused regions like Asia-Pacific, Europe, and the Americas.
 Urgency:
o Customers needing expedited shipping (time-critical shipments).
o Planned bulk shipments.
3. Google Cloud (Technology and Cloud Solutions)
Segmentation Basis:
 Industry Use Cases:
o Finance: Data analytics and fraud detection.
o Healthcare: Secure patient data management and AI diagnostics.
o Retail: Omnichannel solutions and supply chain optimization.
 Company Size:
o Large enterprises requiring high-scale cloud infrastructure.
o Startups and SMEs requiring flexible, cost-effective solutions.
 Buying Behavior:
o Centralized decision-makers like CIOs in enterprises.
o Developers/startups choosing based on ease of integration and free trials.

Takeaways from Brand Pipe Case

How segmentation helped Brand Pipe overcome losses:
1. Focused on profitable segments:
o Turf irrigation, potable water, and PVC pipes.
2. Targeted geographies with lower transportation costs:
o Washington to reduce logistical challenges.
3. Shifted to critical-use markets:
o Emphasized segments where product quality was essential (e.g., underground
pipelines).
By realigning their target segments based on profitability, critical needs, and logistics, Brand Pipe
turned its strategy around effectively.

ABB
Insights

Dan Ahern the Key Account Manager instead of gathering information of what Catepillar bought
from ABB and was it single ,dual ,multisourcing .Instead Dan Ahern reinforced the strain by having a
meeting with the top management of ABB and Caterpillar .

The skills to Select ,Grow and Manage a Key Account are

Commercial and Technical skills as in this case and he shud have a dedicated people from which
division reporting to him Know how to overcome resistances within and outside the
Organisaton Know how to grow a Customers acccount and earn trust and then build the relationship
so that there is transparency and both Seller and Buyer BenefitsThe challenge is to pitch the game at
a higher level ( Corporate also called upstream) so that opportunities cud be evaluated jointly and
risks shared too

Managing Revenues

B2B Organisations Buy goods and services to serve their customers and grow their business .In doing
so they face threats and opportunities from the external environment which in turn impacts the
internal environment ( several functional areas ,some getting impacted more ) .Example a change in
the government policy ( External Environment) revising policy tariffs on electrical motors ( DMC) ,the
larger customers who buy motors in larger quantities benefit from the savings .The functional area
within the Buying Organisation will be most impacted will be those responsible .Thus if there is an
Electrical Engineer if is expected to help the Organisation save for which he will decide to incorporate
such features and qualify vendors that have those capabilities.If the Buying Organisation doesnt have
an electrical Engineering Dept then the R&D manager may contact a supplier with that
capability .Another possibility is the supplier with the capabaility contacting the Organisation and
proposing the value.If the Orgnaistion is buying a New Product from perhaps a New Vendor then
more personnel from different functional areas will participate to decide on the specs .

The learnings are as follows

The Buying Organisation may be facing a threat or an opportunity for which they dont have a
solution or they are currently using a product but loosing out to competition or loosing profits .Thus
the Buying Situation may be New Task ,Modified Rebuy or Straight Rebuy and this influences decision
making as we know the stage of the Buyers journey ( Awareness ,Consideration,Purchase etc or
Trigger ,Product Qualification,vendor Qualification) . The approach a supplying Organisation may use
to retain an existing account or acquire a new account will depend on the Buyers Status or the
journey point .

Concepts learnt

Buying Situation
Buying Process
DMU composition
Role
Criteria that will be used for qualification

Case In DMC the buying situation got altered due to the change of tariff and the power in the DMU
shifted to the Electrical Engineer who played multiple roles .

Exercise

If you face an Account that is currently buying from you ,what are supposed to do to retain the
Account?
If you face an Account which doesnt buy from you what are you supposed to do in order to make
them purchase?
If you are a Start up and have a Product which would help the Buying Organisation increase its
revenues what would you do to convert the product into cash ( thu you have no resources to have
your own Sales personnel ?
If you were working for Maersk and you see more and more parents ( empty nests) having their own
pets ( expensive breeds) .How could you develop this market and generate a new revenue stream for
the Company ?
Pintura

New Products are the growth engines for any company and one needs to fill their pipelines with new
ideas which can be tested ,concepts developed ,prototypes made ,approvals from customers
solicited and then launched .We saw Atlantic do it when the growth in the high end server market do
it ,we saw Pintura develop Powder Coatings despite having a Water based coating but sales had
started flattenning.

Products could be new to the market ,new to the company or new to the World .In B2B New
Products need managment consent as it involves investment so the Marketing Manager starts with
Why the New Product ?How much wud the investment be?Which Markets will be targeted ?What
will be the Marketing Mix?Will there be the threat of eating into existing products
sales?Branding Sales /Profits anticipated

New Products in B2B generally shud benefit all the supply ,demand chain members .We noticed how
the first segment which adopted the Water was furniture but they were disappointed and we saw a
no more growth in the furniture sector.To approach makers of furnitures will be met with reluctance
so we looked at stimulating demand from consumer level and the benefits that wud appeal to them
were
stain resistanceversatliity ( designs which are complex)Durability
Thus we worked backwards - creating a market for the immidiate high end furniture market .

Lessons

New Product
Types of New Product
Why launch - is it for market share etc
Seeking consent from Managment
Developing a Marketing Plan

Exercises
Think of new services which Maersk could get into?Think of how Maersk can improve profitability
and improving turnaround for their vessels.Could Maersk develop category wise specific container
vessels like " coffee " air tight vessles to retain aroma , collapsible containers

Steps to Convert a Large Account into a Key Account

1. Understand the Customer’s Needs and Goals:
o Research the customer's business, industry, and pain points to understand why they
developed their specs.
2. Engage the Procurement Manager:
o Acknowledge their specs and ask for a detailed clarification of their requirements
and reasoning behind the specs.
3. Assess Fit and Customize Offerings:
o Identify areas where your technology aligns with or outperforms their needs.
 o Highlight potential benefits your solution offers that their current specs may not
cover.
4. Collaborate with Stakeholders:
o Reach out to decision-makers (e.g., engineers, technical team) and propose to jointly
explore how your technology can meet or exceed their specs.
5. Present a Value Proposition:
o Focus on cost savings, efficiency improvements, or long-term benefits of your
technology that align with their business goals.
6. Build Trust Through Flexibility:
o Offer to adapt or co-develop a solution tailored to their specifications, showcasing
your commitment to their needs.
7. Leverage Case Studies/Success Stories:
o Share how your technology has added value for similar market leaders, emphasizing
your expertise.
8. Provide a Competitive Quote:
o Ensure your pricing is competitive but communicate the added value your
technology brings beyond the specs.
9. Offer Trial or Pilot:
o Suggest a pilot project or trial implementation to demonstrate the value of your
solution in their environment.
10. Nurture the Relationship:
 After securing the order, work closely with the account to deliver value, ensuring you
position yourself as a long-term partner rather than a one-time supplier.
This approach turns the large account into a collaborative partner and lays the groundwork for Key
Account status.

Implementing a Pricing Strategy

Price is one weapon in the tool kit of a marketeer to increase profits and every sales/marketeer
should be familiar with the process to arrive at the right price.We dont price a product but we are
pricing " value" for enhancing the customers business outcome .

Anderson mentions " Value" as an outcome that can be provided to the customer thru
economic,social, service and technology benefits .The price points ( below,above or at par with
competition ) accounts
the cost incurred and then add a margin ( here the focus is on Corporate goals and is done by
Finance and Accounts .If the opposite is to focus on customers goals then the " Value" that the
customer stands to gain comes to the picture .We discussed that the maximum profits Atlantic stands
to gain is from " Value based approach". However we discussed the implementation bottlenecks that
Jason would face being a junior and having no authority and responsibility .

Sales personnel are to implement the pricing strategy so Jason had to

Target the right customerGet an appointment The above cannot be done unless Cadenna gets to
know how his sales personnel stands to gainCadenna will have to accompany for the first conversion

The five challenges was shared and the decision making journey was shared .These were the critical
showing the B2B marketeers difficulties .We then shifted gears to use cases to share the concepts
and its applications

DMC - how accounts need to be managed lest competitors get your accounts switched
Zurin - How suppliers have to be managed ?Suppliers supply a variety of goods and services and how
some are critical to the buyers
increased profitability and some not ? Thus with some suppliers the buyer seller relationship is loose
or transactional where a Marketeers linkage is with Purchase
Brand Pipe - Not all B2C customers need to be targeted thus choose those where chances of
winnability is more .Thus we used
Brand Pipe to show how markets could be segmented and then choose those segments where you
can reach your companies goals.
Segmentation can be done in multiple ways thus we looked at how applications looked be first
looked into.In other words for what application is the buying Organisation buying .Thus
entering .foundation and facilitating goods may vary based on the application.Within the chosen
applications needs of Large Organisation may vary in terms skills they possess or not ,purchase is
centralised or not ,is the customer placing "rush orders ".As needs vary we choose those needs
whom we can serve better than competition .
Having chosen those segment we formulate a VALUE PROSPOSTION" which is a statement where all
functions inside Brand Pipe would know who we are serving and how shud our product parameters
be different .Thus the statement is made in the following manner
To which target Market we propose to serve
in which category ( POP) ie plastic pipes
and how do we plan to be different ( POD)
and why ? as we can make uniform diameter at the lowest price and fastest delivery

Having done this we communicate to those buyers which make a perfect fit on " One or Two
benefits " if they buy from us it could be fastest
delivery at lowest price .The question which one benefit shud be choose that depends on the DMU
of the buyers and which is relative to competition

4.Product - Types of New Products , If New to the Market the objective and the plan to convert
the product to cash .We identified the
target ,the marketing mix ,the brand
5.Pricing - In B2B Prices are often negotiated and we either focus on Company goals ( Cost plus) or
Customer Goals ( Value based) ,or match competitiors .Whichever price mode we choose we have to
negotiate and this is where implementation comes in .In this the sales face is customer facing and he
has justify the " VALUE"
6.Promotion -WE took Maersk case ( Service)and looked at traditional and digital mode of
generating leads and increasing conversion.The Buyers journey has to be matched with the right
marketing activities at each stage and hence content should be relevant and multiple medias
including
7 .Place - Ingersoll Rand ( Designing a Channel ,Managing Multiple Channels and How IR
ensure that each channel had a defined role in ensuring order generation and order fulfilment
Amazon B2B was taken up to show how Amazon invites Grundfos to use their Market place with
three seperate approaches .
Amazon generates orders online and Grunfos fulfills it brand name is Grundfos but the customer data
the supplier may not know
Amazon generates order and fulfills it too ( Amazon comes to know the issues and also can develop
relationships with installers
Amazon does all three with Grundfos just being the maker
Grundfos - we discussed the current model where they sell to wholesaler who in turn sells to
installers .Thus in the whole chain installers
are the contact point for customers.If Amazon comes up a competitors brand and sells it under
Amazon name and build relationship with
installers .Grundfos model stands threatened .The question we dealt with the groups

Why is Amazon entering the B2B market place ?

Is competition already using Amazon if yes is it under Amazons name ?
How shud Grundfos respond ?
8,Asclepius (software) and BDVS ( Facilitating) was discussed in detail

I dont share PPTs of case presentations as those are based on class discussions .If you all still have
any doubts pls do reach out to me and
I will help you clarify the classes doubts.You give any case and I will go thru the same concepts and
come to the "Key Issue" or the diagnosis .Reading a case a few times help us understand the
components .