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B2B Notes

B2B case solutions

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4 views

B2B Notes

B2B case solutions

Uploaded by

brinda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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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.

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