Relationship Marketing In B2 B Marketing.

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The Project Entitled

“AN IMPACT OF RELATIONSHIP MARKETING

IN B2B MARKETS”

is Submitted to

ICFAI National College

For The Subject

Marketing Management - I (Sem – I)

Submitted By

Rajat Patel

Kunj Barot

Priyank Patel

Pavan Patel

Guided By

Shri Mohit Parekh

Vadodara – 390 007 www.incindia.org

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CERTIFICATE

This is to certify that the Live Project Report entitled “AN IMPACT OF

RELATIONSHIP MARKETING IN B2B MARKETS” is prepared and

submitted by the following students in the partial fulfilment for the subject

Marketing Management - I (Sem – I) of ICFAI National College Vadodara.

Name Enrolment No.

1. Rajat Patel 8NBVD004

2. Kunj Barot 8NBVD018

3. Priyank Patel 8NBVD031

4. Pavan Patel 8NBVD128

This is a record of their own work carried out under our supervision and

guidance. The matter embodied in the report, to the best of my knowledge,

has not been submitted for the award of any degree of any institute or

university.

Guide Center Head

Shri Mohit Parekh Shri U. B. Pandya

Faculty for a subject ICFAI National College

Marketing Management - I

Date: _____________

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Acknowledgements

The live project plays an important role to adjust with & to get experience of

corporate world, and this project is no different. We would like to acknowledge

our guide, Mr. Mohit Parekh, for guiding us in various aspects of the project.

This project has taught us how to prepare questionnaire for the survey of our

interest and how to interact with the corporate people for the same. And also

the valuable comparison between theoretical knowledge of the subject & the

practical aspects of the same.

We are indebted to all those corporate who took time out of their busy

schedules to guide us and to help us in our survey.

We would like to thank Mr. Sanjeev Mehta, DGM, INEOS ABS (India) Limited

and Mr. Snehal Joshi, Purchase Manager, Alembic Limited to provide us

additional data.

Finally, we would like to thank our college, ICFAI National College –

Vadodara, to give us such a graceful opportunity which helps us to enrich our

knowledge of Relationship Marketing and to understand the theoretical

concept of the subject in a better manner.

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Table of Contents

○ List of Tables, Figures, Exhibits, or Appendices ----------------- 5

○ Executive Summary ----------------------------------------------------- 6

○ Introduction ---------------------------------------------------------------- 7

○ Objective ------------------------------------------------------------------- 8

○ Secondary Literature Review ----------------------------------------- 9

○ Methodology -------------------------------------------------------------- 10

○ Limitations ---------------------------------------------------------------- 10

○ Analysis -------------------------------------------------------------------- 11

○ Recommendations ------------------------------------------------------ 17

○ Conclusion ---------------------------------------------------------------- 18

○ References --------------------------------------------------------------- 19

○ Appendices --------------------------------------------------------------- 20

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List Of Charts, Tables and Appendices

Charts

○ Realization of Payment ( Turn over Basis ) ------------------------------------- 12

○ Realization of Payment ( Type of Ownership ) --------------------------------- 13

Tables

○ Ranks of Factors ---------------------------------------------------------------------- 14

Appendices ------------------------------------------------------------------------------ 20

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Executive Summary

We have done a live project on “An impact of relationship marketing in B2B

market” as an objective of our live project. We have gone through certain

secondary literature review like Marketing Management by Philip Kotler to

give proper direction to our live project.

We have done a survey with methodology of stratified random sampling with

25 sample size.

This live project has certain limitations like time constraint and small sample

size. It is really difficult to come to a fair conclusion with such kind of

limitations. Even though with these kind of limitations we have tried to analyse

our data in such a way that we can come close to a concrete conclusion to

establish relationship in B2B market.

From all such analysis we have given some recommendations in order to

establish relationship in organization in such a manner that can be further

useful to the organization for their progress.

We have given references from which we have gone through in order to

accomplish our live project successfully.

At last we have enclosed our questionnaire for the kind reference of readers.

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Introduction

In a present scenario of such competitive market where to just sustain

become harder day by day, Relationship Marketing plays significant role in

business functions. Relationship marketing refers to understanding and

responding to customer needs and preferences to build more meaningful and

long term connections with customers. Attracting new customers are of no

use unless you know the art of keeping them and from here the role of

relationship marketing starts.

The goal of relationship marketing is to satisfy customer in such a manner that

he becomes loyal to the company and is unlikely to switch to the competitors.

Relationship is just like chemistry bonding between the atoms but here atoms

are humans (Supplier �� Consumer).

As relationship marketing is growing rapidly with respect to B2B market, it is

necessary to study the impact of the same.

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Objective

As the title suggest the principle objective of this live project is to study the

Impact of Relationship Marketing in B2B Markets. There are several other

secondary objectives as a by-product of the principle objective, they are:

How to do a live project with a team in a systematic manner and how to make

that team to work in a same direction to achieve a target of completing the live

project in limited period of time.

How to do a survey to achieve better results and compare those findings with

the theoretical aspects. By that way we can increase our understanding of the

subject.

The last but not the least is how to use knowledge of various subjects to have

better results and conclusions.

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Secondary Literature Review

To do our live project in a better manner we have reviewed some secondary

literature, those are mention below.

○ A thesis on Relationship Marketing Strategy by Patricia Sorce, Ph.D.,

Professor, College of Business Rochester Institute of Technology.

○ Putting the Relationship Back in Relationship Marketing by Andy

Hasselwander, Vice President, MarketBridge and by Laird Rawsthorne,

PhD, Associate, MarketBridge.

○ The relationship between buyer and a B2B e-marketplace, Cooperation

determinants in an electronic market context by Andrew Lancastre and

Luis Filipe Lages.

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Methodology

We have chosen 25 sample size and have made survey on basis of stratified

random sampling. We have sub divided strata into further sub division like

Sole Proprietorship, Partnership Firm, Private Limited Firm, Public Limited

Firm.

To do a survey we have prepared a questionnaire which is attached here with

the appendices, in order to get better results. We have also used direct

interviewing method with the company personnel of our interest, like Purchase

Manager.

Limitations

In this given live project there are some obstacles in our path like time limit,

sample size, and the initial response of corporate towards us. Less number of

samples might not give a reasonable result and the time limit has bound us to

visit more number of corporate and our informal approach (without

appointment) towards them made our task more difficult.

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Analysis

We have done our live project with 25 sample size and segmented it on the

basis of company demographics like ownership types and turn over.

○ On The Basis Of Ownership

○ Sole Proprietorship ------------------------ 7 samples.

○ Partnership Firm --------------------------- 3 samples.

○ Private Limited ------------------------------ 6 samples.

○ Public Limited ------------------------------- 9 samples.

○ On The Basis Of Turnover

○ Turn over < 1 Crore ----------------------- 8 samples.

○ 1 < Turn over < 100 Crore --------------- 7 samples.

○ Turn over > 100 Crore -------------------- 8 samples.

○ Other remaining 2 samples are of Taluka Panchayat in which one

can’t get the data of turnover.

As Realization of payment plays an important role in relationship marketing in

B2B market, it is an important factor to study. The data which we got we found

that aggregate of figures says that mid term is the best option out of the

options given in question 3 (Refer Appendices).

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From the above chart, it is clear that in all 3 segments, Mid Term (30-90 Days)

payment is the option chosen by majority and also holds true with respect to

all 25 samples (Aggregate).

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From the above chart, it is clear that in almost all type of ownership firms Mid

Term payment option is chosen by majority and it also holds true with respect

to all 25 samples (Aggregate).

Here we can say that Mid - Term payment option is in the favor of both

supplier and purchaser because 30 – 90 days payments term is more

acceptable because it is not affecting profit margin of the supplier and

purchaser gets the time to verify the material and on that basis he can decide

whether to make payment or not.

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Ranks Of Factors

Lower Rate

Better Quality

Timely Delivery

Supplier's Experience

After Sales

Service

Supplier's Technical

Competence

Aggregate 3 1 2 4 5 6

Sole Proprietorship 2 1 3 5 4 6

Partnership 2 1 3 5 4 6

Private Limited 3 1 2 4 5 6

Public Limited 3 1 2 5 6 4

Turnover < 1 2 1 3 5 4 6

1< Turnover < 100 2 1 3 4 5 6

Turnover > 100 3 1 2 4 6 4

As we can see from the above table that “Better Quality” is the most important

factor for corporate and “After Sales Service” is the least important factor.

On asking to the corporate what do you expect from the supplier after

completion of supply ? Majority says information about different products and

market condition. E.g., Alembic Ltd., While 2 out of 25 selected very abnormal

option i.e., greeting cards, gifts on the occasions and those two are Taluka

Panchayat.

In order to make bonding of relationship more strengthen, prevailing supplier

has to provide some additional services to the purchaser e.g., free delivery.

In this survey we get both the answers, and it is obvious that relationship has

two aspects in corporate one is under table relationship and other is healthy

relationship in the sense of business ethics. (Refer Appendices Que. No.: 6)

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There are 17 corporate organizations who are purchasing globally to meet

their final requirement and they are not that harsh or unfriendly towards terms

and conditions for their purchase from global supplier as compare to Indian

supplier. We get the aggregate rating of 5.53 and 6.2 for global and Indian

supplier respectively. (Refer Appendices Que. No.: 7 & 8)

Here from above paragraph we come to know that they are not much strict

towards their terms and conditions because when we have asked them, are

you strict towards your terms and conditions ? They answered second option

i.e., “little bit” (76%) , (Refer Appendices Que. No.: 9).

All the purchasers believe in having more than one supplier. This may be due

to reduce dependability on one supplier. But this is the factor which affecting

relationship between purchaser and supplier by the way that relationship

become weak to the some extent. (Refer Appendices Que. No.: 10) I

From this survey we found that by the way of advertisement a virtual image of

supplier created in purchaser’s mind with some expectation like he can be

technically sound, good managerial operations. Corporate find their supplier

by the way of internet surfing, magazines, through references of others, and

other ways like trade fairs, yellow pages, etc… we found results 84%, 72%,

40%, 40% respectively. (Refer Appendices Que. No.: 12)

In most of the cases (96%), we found that corporate buying from both of the

manufacturer and traders. But they mostly prefer manufacturer in order to

reduce inconveniency like timely delivery, quality, and better rate. (Refer

Appendices Que. No.: 13)

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In case of supplier not sending material on time or not sending proper quality,

36% of corporate are charging penalty and rest 64% are not charging any

kind of penalty. It is the advantage of relationship that makes the 64% of

corporate not to charge any sort of penalty. (Refer Appendices Que. No.: 14)

We got very straight forward answer that in all the business organizations

decider playing most dominating role in purchase system because all the

authority of purchase the commodities or services are with the decider. That

means if any supplier has to maintain a relationship in an organization he has

to maintain with decider. (Refer Appendices Que. No.: 15)

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Recommendation

Personal relationship is also to be maintained to get the support and good

coordination at the time of emergency so personal relation is also an

important factor in the company to the extent it should not lead to corruption.

In order to maintain healthy relationship between supplier and purchaser their

should be some limitation or it should be up to certain extent so that smooth

functioning of business take place at the both the end.

They can use different combination of payment terms for the defensive

relationship e.g., some percent of payment in advance and rest in Mid Term.

By the way of advertisement purchaser should not make any virtual image of

supplier because it is not practical thing and it is the first step to make bonding

of relationship.

They should look on the more technical competence of supplier in order to

maintain positive relationship.

They should charged penalty for better business practices and for better long

business to business relationship.

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Conclusion

In Sole Proprietorship or Partnership Firm personal relationship with the

supplier is viable as compared to Private Limited and Public Limited

Companies. Because in Sole Proprietorship or Partnership Firm, there are

only 1 or 2 people plays the role of decider but in Private Limited and Public

Limited Companies, there are members of board of director who plays the role

of decider so there are more chances of disputes among them if one

maintains any personal relationship with the supplier and gives order to that

supplier, that can creates problem.

Relationship in B2B market is based on main 6 parameters like quality, timely

delivery, Rate, quantity, Supplier’s experience, supplier’s technical

competence, and after sales services respectively. As supplier meets all such

criteria more strengthen the relationship between the supplier and purchaser.

Mid term payment option is offered by both supplier and buyer in order to

make healthy and positive relationship.

Supplier has to keep the healthy relationship with the decider because decider

has the final authority to decide from where to buy ? Whom to buy ? And how

to buy?

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References

Here we get good response from big corporate as well as Small Scale Units

and Medium Enterprises. We also get some essential data from Dabhoi and

Palej Taluka Panchayat. Other references are:

○ www.google.com

○ www.wikipedia.com

○ Marketing Management, Philip Kotler

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Appendices

Questionnaire

A Study on Impact of Relationship Marketing in B2B Market

1. By which way do you purchase?

□ Basic enquiry. Tender.

□ From few selected suppliers of your interest. 2. Criteria for selecting a supplier.

□ Quality oriented.

□ Quantity oriented.

□ On basis of rate.

□ Timely delivery.

□ Supplier’s experience.

□ Supplier’s technical competence.

□ After sales service.

3. Realization of payment to supplier from your side.

□ Short term (15-30 Days)

□ Mid term (30-90 Days)

□ Long term (90-180 Days)

□ Advance (Percentage of amount)

□ Cash against delivery.

□ Bank through.

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4. If any new supplier (who has a good reference) offers you lesser price and you already have a reliable supplier, which one will you choose?

□ Old supplier. New supplier (On trial basis).

Not sure.

5. After completion of supply, what do you expect from the supplier?

□ A regular interval calls for new products.

□ Information about current market condition for different products.

□ Greeting cards, gifts on the occasions. 6. Do you believe in personal relationship with your supplier?

□ Yes. No. 7. Do you purchase globally?

□ Yes. No.

• If yes then how is your approach towards international supplier? (with respect to terms & condition)

Unfriendly (Give your rating) Friendly

1 10

8. How is your approach towards Indian supplier? (with respect to terms &

condition) Unfriendly (Give your rating) Friendly

1 10 9. Are you strict in your terms & condition for the procurement of products?

□ Yes. Little bit. No.

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10. Do you believe in one supplier OR to have diversified list of suppliers? (i.e. more no. of suppliers).

□ One supplier. More no. of suppliers.

11. Give importance to the parameters listed below to judge the reliability of supplier.

Least Important Most Important 1 10

□ Lower rate.--------------------------------------------------

□ Better Quality.----------------------------------------------

□ Timely delivery.--------------------------------------------

□ Supplier’s technical competence.------------------------

□ Supplier’s experience.-------------------------------------

□ After sales service.----------------------------------------- 12. How do you find your supplier?

□ By internet.

□ By magazine.

□ By newspaper.

□ By road-banners.

□ Through firm’s (someone’s) reference.

□ If any other way please mention it below.

13. From whom do you buy?

□ Manufacturer. Traders. Both.

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14. Are you charging any penalty in case of late delivery or not receiving required quality goods?

□ Yes. No. 15. Who plays dominating role in your purchasing system?

□ Initiator Influencer Decider Buyer User

Company’s Demographic Profile

1. Type of Ownership:

□ Sole Proprietorship.

□ Partnership.

□ Privet Limited Co.

□ Public Limited Co.

2. Type of Business:

□ Manufacturing.

□ Service.

□ Professionals.

3. Turnover: __________________________.

4. Location: __________________________.