Environment and Relationship Building in Business.

Environment and Relationship Building in Business.

Environment.

While some final consumers find technology exciting, it's not usually the telling attribute with consumers. With business customers, the appliance of proper technology often has significant effects on the financial results. One only need imagine the assembly line of a computer manufacturer to see the importance of particular circuit boards. A circuit card provider would need to be intimately familiar with the technology used by Dell, Acer or Hewlett-Packard so as to serve these firms most effectively. 

Should a mistake be made and the wrong type of board be provided, these computer manufacturers’ assembly lines would pack up and the loss of revenue would be significant. Technology is additionally very important in improving the sales success ratio. Since salespeople can carry laptop or tablet computers into a customer’s location, they will often make very effective presentations and at the same time tap into head office databases to answer important questions on the spot. 

Perhaps the simplest known difference between consumer and business marketing is the concept of derived demand. This simply means, as we've seen in the hairdryer example, that the demand for business marketers’ products springs from sales to the consumer. A firm supplying personal security systems to home builders would be affected significantly by the amount of new homes or apartments built in a particular area. 

Should demand for these homes slacken, no amount of convincing marketing will force a home builder to get more personal security systems than he can install in newly built residences. Business marketers must look beyond their own customers to the last word consumers to understand trends that may have a significant effect upon their business. 

The income in a particular market has a significant effect on the demand for automobiles. A firm supplying seats or GPS equipment to automobile manufacturers would had best to review the disposable income trends in a particular market to predict future sales of their product. In consumer markets, there are well-established government and personal firms supplying specific market data. as an example, within the United States, the AC Nielsen Company supplies frequent data about supermarket sales by product and brand. 

Additionally, models exist which may predict the success of a consumer marketing activity based on small experiments. Here exposing a test market to advertising then examining the results can allow a firm to predict nationwide sales since well-established formulas are commercially available to form this prediction. No such formulas exist in B2B markets and regularly the data required by a particular business marketer is difficult to find. 

A firm that manufactures access flooring (a product which provides a false floor on top of an ingenious floor to allow a plenum for housing wiring and passing air conditioning) was attempting to determine the size of its market in the Far East. The firm looked first at the us and found that no government data was available which specifically identified the sales of this type of product. 

The closest identification was “metal fabricated products, nec.” “NEC” means not elsewhere classified, the bane of any market research person. this suggests that data concerning many kinds of fabricated metal parts was included in the category and the access flooring manufacturer could only know the absolute largest possible size of his market but was really no closer to identifying the real size. 

In trying to find data in Hong Kong, China and even Japan, he saw the same problem. No data of this definition was available. this type of problem is often true for business marketers and the solution to this problem.

Relationship Building

A vital part of success in business marketing is the development and maintenance of customer relationships. rather than simply looking at a series of transactions between a customer and a supplier,the successful marketer attempts to determine a relationship. 

This is often not always a long-term relationship, but the interchange should be seen as quite a simple transaction. In fact, one definition of selling is “to establish, maintain, enhance, and commercialize customer relationships in order that the objectives of the parties involved are met. this is often done by a mutual exchange and fulfillment of promises” (Grönroos, 1990). 

The vendor gives a set of promises related to products, services, financing, administration, information, social contacts and other commitments. Research shows that not every customer either needs or desires a long-term relationship (Day, 2000 and Cannon and Perreault, 1999). Some business marketers should segment their customers consistent with their relationship needs.

The IMP Approach

The Industrial Marketing and Purchasing Group was formed in the mid-1970s by researchers from five European universities. IMP sees B2B marketing not just from the purpose of view of firms forcing their marketing programs on buyers but as an ongoing interaction between buyers and sellers. 

This research stream implies that buyers and sellers are hooked in to each other and that the interactions themselves create new value for both (About the IMP Group, 2012). This approach is predicated on relationship marketing pioneered by Grönroos as described in the section above. Four major differences between traditional and IMP approaches are identified (Cova and Salle, 2007). 

These are whether customers are engaged during a series of single purchases or a long-term complex relationship, whether the customer takes a lively or passive role in these interactions, whether markets are stable or unstable and whether focus should tend individually to the supplier or customer or to the supplier-customer interaction over time. 

Some researchers state that a shift is important from studying marketing to studying markets (Venkatesh and Penaloza, 2006). A key criticism of the IMP approach has been the problem of applying it to everyday management problems(Ankers and Brennan, 2004 and Golfetto et al., 2007). Nevertheless, the insights into networks and relationships are valuable and are incorporated into this textbook where appropriate.