2014 B2B

MARKETING PRACTICES

B2B Sector 2014

Conceptual Framework

1. Definition2. B2B : Key Segments and Analysis3. Stages in Buying and Sales Cycle4. Sales and Marketing Roles in B2B5. Characteristics of today’s B2B Sales

person6. Key Players7. Who’s Who8. Careers in B2B

B2B is P2P

B2B = Business to BusinessB2B = Organisational Buying & SellingB2B = Industrial Buying & SellingB2B = Corporate Sales / SellingB2B = P2P = Person to PersonInstitutional Sales /Selling is the same

concept as B2B except that Institutions are not businesses; they are hospitals, schools, colleges etc.

1. What is B2B /Organisational Buying / Industrial Buying?

It is the decision making process by which organizations establish the need for purchasing products and services and identify, evaluate and choose among alternative brands and suppliers

More money & items are involved in selling to Business buyers then selling to Consumers

1. What is B2B?

Business market consists of all organisations that acquire goods & services used in the production of other products and services that are sold, rented or supplied to others

Before goods reach end consumers through retailer; B2B activities take place - manufacturing of goods, distribution, transport of goods

1. What is B2B?

Some Companies are into both businesses (B2B & B2C (End Consumers)) – Pepsi, Coke, Automobiles, Electrical & Electronic equipments (A.C., TV sets, Computers etc.)

2. Key Segments in B2B refer to link http://www.mynewsdesk.com/in/view/pressrelease/exploring-top-10-business-sectors-in-india-447772

Agriculture & related (Forestry, Fisheries)

Manufacturing (Construction, Mining etc.)

Banking, Financial Services and Insurance

Distribution and services (Communication etc.)

Key Segments in B2B

AgricultureCompany - Dupont India Products - Crop protection, Animal health solutions,

Pioneer seeds and Inoculants and Agricultural packaging

ForestryLumber (timber, wood), paper, honey, rubber,

bamboo, medicinal plants and lots moreFisheriesIndia is the 3rd largest producer of fish in the worldMiningCos: Coal India Ltd., Hindustan Copper Ltd.,

Akashkinari coal mine, Amarkonda-Murgadangal coal, Amlai coal mine

1. Food & Beverages

Changing lifestyles and eating habits

Growth 7.5% till 2013 up to a size of 330 billion dollar industry

Most of the F & B segments are increasing in revenue, highest being the alcohol segment

Growth was 14.1% from 2009 to 2010

It was a $ 67 billion industry in 2010

Increased by 11% till 2013

IT services, software and hardware have contributed greatly to the increasing rate of IT

2. IT Services

3. Health Industry

Experiencing growth - huge difference in the cost of healthcare in Indian and Western countries

Estimation of growth from $ 75 billion in 2012 to $ 150 billion in 2017

4. Telecom Industry

India holds the 2nd rank as the telecom network provider

Estimation of growth rate is at 11% from 2010 to 2014

5. Textile Industry

Globally reputed B2B sector

The total textile exports from India contribute to 27% of total foreign exchange

Main segments - Cotton, silk, jute, woolen, hand-crafted and readymade textiles

6. Auto Industry

Consistent growth rate of 20% since 2000 and estimated to continue till 2015

Main contributors to growth – Engine parts, drive transmission, steering parts, suspension and braking parts and electrical parts

7. Construction Industry

Contribution – 11% of India’s total GDP

It is an exporter of various raw materials to the world

China is the biggest consumer of steel exported by India

Also Cement industry is a major growth contributor

8. Handicrafts

Indian handicrafts enjoy a great demand in US, UK and Australia

Major contributors which get foreign exchange worth 3 billion dollars to the country – Wooden handicrafts, jewellery, hand printed textiles and crocheted goods

9. Energy

Major contributors – both renewable and non – renewable energy sources

Natural gas, LPG and solar energy

10. Banking and Insurance

Major contributors – Investment banking, mortgage and insurance sector

Examples of Business Practices in B2B (examples from Ref. Book except McDonalds from net)

Example 1 : Few tyre cos. viz. JK tyres, Apollo tyres, MRF, Bridgestone etc. selling to handful of major automakers who are large buyers

Example 2 : Critical and close relationship of buyers and sellers such as McDonalds’ and Mrs. Bectors foods, customization and confidentiality of Recipe formulations

Examples of Business Practices in B2B

Example 3: Also Mahindra & Mahindra developing and designing the Scorpio along with its few trusted suppliers from early stages

Example 4 : Suppliers such as the Japanese firm offering turn key solutions for the Cement Factory bid to Indonesian Government

Example B2B

V/S B2C IT B2B or B2C BPO / KPO B2B or B2C

Hardware B2B & B2C Voice Process B2B

Software B2B & B2C F&A B2B

TES B2B Medical Under righting B2B

Networking B2B & B2C T&E B2BIT & BPO/KPO

3. Stages in the Buying Process

Order Routine Specs

Sales Cycle

B2B is P2P- Ability of the salesperson to sell effectively to the

Buying centre- Reputation in the Market is critical for B2B

players therefore B2B is person to person - Selling only when it is best fit for the buyer build

reputation

Chacs. of Today’s B2B Sales Person

Eco System

• Understands the Segment

• Understands Business

• Has Built his own Eco system

Intrinsic

• Attitude• Ability to

scale low or high – C level executives

• Relationship Driven

Acquired skills

• Spot and Opportunity

• Judgment• Understand

and be able to articulate – VALUE

• Communication Skills

Pointers to ExercisePerson Role Type of Buyer

CEO Knows the impact of CRM to his Business and what others are doing in similar businesses

Influencer

Operations Head US Key Understanding of Region Customer

Influencer

Operations Head UK Key Understanding of Region Customer

Influencer

Operations Head Latin America

Key Understanding of Region Customer

Influencer

SVP Marketing Understands overall what is important for their customers

Approver

CIO Will evaluate from IT and Business perspective. Which solution is most relevant

Approver

SVP Procurement Purchase procedure. Commercial process adherence

Indirect Influencer

IT Group Head - CRM Main evaluator. He will call for offers, evaluate, draw comparative statements etc

Recommender

Procurement Head – IT Services

Main commercial evaluator Indirect Influencer

SVP Finance Business Models. How does the cash flow impact the company. What will be the benefits etc

Financial Sponsor

4. Sales and Marketing Roles in B2B

Customer Interaction Responsibility

Prospecting (identifying, sifting and sorting)

Marketing

Conversion (raising demand and lowering prospective client

barriers / building trust)Marketing

Creating a unique buying experience Sales… with support from Marketing

Saying thank you Marketing… with support from Sales

Retention / communication (back to the top of the funnel) 

Marketing

5. Key Players India & International

1. Fedex2. Samsung3. Cemex4. IBM5. Siemens6. Lanxess7. Lenovo8. Tata Steel

Fedex

FedEx Corporation, originally known as FDX Corporation, is an American global courier delivery services company headquartered in Memphis, Tennessee

Fedex Express

FedEx Express is a cargo airline based in Memphis Tennessee, United States

World's largest airline in terms of freight tons flown and the world's fourth largest in terms of fleet size

Subsidiary of FedEx Corporation

Fedex Express

Delivers packages and freight to more than 375 destinations in nearly every country each day

FedEx Express is the world's largest express transportation company

United States Postal Service - USPS continues to be the largest customer of FedEx Express

IBM

International Business Machines Corporation or IBM

American multinational technology and consulting corporation

HQ Armonk New York, United StatesIBM manufactures and markets computer

hardware, software, offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology

IBM

#2 largest U.S. firm in terms of number of employees (433,362) (2012 Fortune)

#4 largest in terms of market capitalization#9 most profitable #19 largest firm in terms of revenue12 Research laboratories worldwide2013 - most patents generated by a

company for 20 consecutive years

IBM

Employees have won - 5 Nobel Prizes, 6 Turing Awards, 10 National Medals of Technology and 5 National Medals of Science

Famous inventions by IBM include the automated teller machine (ATM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the Universal Product Code (UPC), the financial swap, SABRE airline reservation system, DRAM and Watson artificial intelligence

SIEMENS AG

Siemens AG is a German multinational engineering and electronics conglomerate company headquartered in Munich, Germany

It is the largest Europe-based electronics and electrical engineering company

Siemens' principal activities are in 5 main divisions: Industry, Energy, Healthcare, Infrastructure & Cities, and Siemens Financial Services (SFS)

Siemens and its subsidiaries employ approximately 360,000 people across nearly 190 countries

SIEMENS INDIA

Energy - Solutions for all energy needs – from a single system to complex turnkey solutions for oil & gas, power generation, transmission and distribution

Healthcare - Siemens offers the most comprehensive portfolio of diagnostic and therapeutic solutions bringing together advanced laboratory, imaging and healthcare IT systems

SIEMENS INDIA

Infrastructure - End-to-end products, systems and solutions for industrial and building automation, infrastructure installations

Industry - Automation technology, project management, engineering and software installation, commissioning, after-sales service, plant maintenance and training

TATA STEEL

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO))

Indian multinational steel-making companyHQ - Mumbai, Maharashtra, IndiaSubsidiary of the Tata Group12th-largest steel producing company in the

worldAnnual crude steel capacity of 23.8 million tonsLargest private-sector steel company in India

measured by domestic production

Institutional and Government Markets

Govt. Of India is the largest Customer in IndiaPurchasing for Defense, Railways & various

other departments Central Purchasing Org. of Govt. Of India -

DGS&DThe Director General of Supplies and DisposalsSuppliers submit Tenders & BidsQualified Suppliers enter Rate contractsProduct characteristics specified – So Product

differentiation, advertising & personal selling does not matter

6. Who’s Who of B2B

Natarajan Chandrasekaran or N. Chandra

CEO and MD of Tata Consultancy Services

Chandra took over as CEO on October 6, 2009 prior to which he was COO and Executive Director of TCS

One of the youngest CEOs of the Tata Group

2013, his income was 11.6 crore per annum

6. Who’s Who of B2B

Nyenrode Business University, Netherlands conferred Chandra with Honorary doctorate for his significant contributions toward business and society

NDTV Business Leader of the Year IT, 2012

Top 25 most influential consultants in the world, 2006

AIMA Business Leader award for 2011

Tata Steel, MD

T. V. NarendranEducation B.Tech., MBA

Alma mater REC TrichyIIM Calcutta

Managing Director of Tata Steel (India and South East Asia), one of the largest steel producers in the world

Refer to http://forbesindia.com/blog/business-strategy/cyrus-mistry-chooses-tv-narendran-as-tata-steel-md/

Siemens India, CEO

Sunil Mathur CEO on November 1 and will

also become MD & CEO of Siemens from January 2014

He will be replacing Armin Bruck who will relocate to Singapore taking charge as CEO of the regional office there

Mathur, a chartered accountant by training from New Delhi's Institute of Chartered Accountants of India (ICAI), joined the company as its internal auditor

Siemens India, CEO

Worked across various departments and roles - in India, Europe and even in Germany

Among the various finance-related responsibilities he held, includes being the cluster CFO for South Asia, CFO of Siemens BHEL JV and director of business administration of Siemen's power generation services in Germany

Careers in B2B

Business DevelopmentArea ManagersAccount ManagersDealer Network ManagementSelling spares and servicesInternational Business Development

Marketing Largely Events, Trade Shows, Trade Analysts etc.New Product Launches, BrandingProduct ManagementCustomer ServiceBrand Store Management (specific)

TCS Case Study and Questions

TCS Case contains:1. TCS Company profile2. B2B Aspect : TCS Advantage3. Example of TCS CCEM in the Government

Sector4. Questions: What is the TCS Advantage?Analyze the TCS Advantage, which is a TCS

initiative to provide focused and systematic service to its clients, as a B2B practice

TCS Company Profile

1. TCS Co. Profile: - their business, offerings, Lineage, Mission, Values, Workforce, Portfolio of Services, Industries serviced, Financial Information, Quality framework, Board of Directors, Leadership team, Alliances, Subsidiaries, you may also include Competitors, Market Share, Recent happenings, Achievements, Awards, International Clients, Countries operating in, etc.

B2B Aspect & Answers for Q1 & Q2

2. B2B Aspect in the CaseTCS Advantage:

- The 4 Models are developed by TCS as specific models and standard operating procedures, which projects the quality, expertise and dedicated efforts of TCS to service its B2B Clients

TCS Advantage can be related to B2B sector practices learnt in the lecture :

- sellers take great efforts to get a buyer / client, go to great lengths to retain the client, offering turn key solutions, services and customized services and the buyer seller relationship is very close and critical, reputation in the market matters

B2B Aspects in General

To Analyze a Company from the B2B sector angle – you can mention its clients, what products, services are being sold, what is the use of those products, then the efforts taken by the selling co. to open a key account, efforts taken by the selling company to study the clients problems / challenges / requirements and offer customized, turn key solutions and services. Ability to understand the clients obvious problems and unspoken issues as well and offer solutions as business partners for them, ethical practices, confidentiality provided etc. For the buyer Cos. In B2B you can menti0n the long, cautious and expert process of buying, long term associations between buyers and sellers etc.

TCS Case Example of CCE Model

3. Example of TCS Customer Centric Engagement Model in the Government Sector

- The TCS Advantage, expertise and dedication for offering best fit solutions as a B2B sector practice is reflected in the above example

Reference Book as follows & Links given on respective slides where

applicable

1. Definition2. B2B : Key Segments and Analysis – Refer to link

given on slide3. Stages in Buying and Sales Cycle4. Sales and Marketing Roles in B2B - from slides5. Characteristics of today’s B2B Sales person – from

slidesSub topics 1 to 5 from Book – Marketing Management –

A South Asian Perspective by Kotler, Keller, Koshy and Jha - Chapter 7 – Analyzing Business Markets

6. Key Players – Internet / wikipedia7. Who’s Who – Internet / wikipedia8. Careers in B2B – Inputs as given in class9. TCS Case – extracts taken from TCS website

THANK YOU