business market management (b2b), 3/echapter 1-1copyright © 2011 dorling kindersley (india) pvt....

Business Market Management (B2B), 3/e Chapter 1-1Copyright © 2011 Dorling Kindersley (India) Pvt. LtdAuthorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e

Accentuate Working Relationships & Business Networks

Guiding Principles

CraftingCraftingMarketMarket

StrategyStrategy

UnderstandingUnderstandingFirms as Firms as

CustomersCustomers

Marketing Marketing SensingSensing

ManagingManagingMarketMarket

OfferingsOfferings

NewNewOfferingOffering

RealizationRealization

Business Business ChannelChannel

ManagementManagement

GainingGainingNewNew

BusinessBusiness

SustainingSustainingResellerReseller

PartnershipsPartnerships

ManagingManagingCustomersCustomers

Regard Value as the Cornerstone

Focus on Business Market Processes

Stress Doing Business Across Borders

UnderstandingUnderstanding ValueValue

CreatingCreatingValueValue

DeliveringDeliveringValueValue

Business Market ProcessesBusiness Market Processes


Basic ConceptsBasic Concepts

Business Market Management Business Market Management is the process of understanding, creating, and delivering value.

Business Markets Business Markets are firms, institutions, or governments that acquire goods and services. Focuses on functionality or performance.


Value as the Cornerstone of Value as the Cornerstone of Business Market ManagementBusiness Market Management

What is Value in Business Markets?

Monetary

Economic, technical, service, and social net benefit

The exchange for price paid


Fundamental Value EquationFundamental Value Equation

(Valuef – Price

f ) > > (Value

a – Price

a )

OfferingsOfferingsff

OfferingsOfferingsaa


ValueValue Value can only be estimated.estimated. Value changes when:

Same functionality or performance provided Same functionality or performance provided while its cost changes to customerwhile its cost changes to customer

Functionality or performance changes while Functionality or performance changes while cost remains the samecost remains the same

Customer Incentive to PurchaseCustomer Incentive to Purchase is the difference between value and price.


Assessing ValueAssessing Value

Supplier firms create and deliver valuecreate and deliver value to targeted

market segments and customer characteristics

Business market management strives to both

understand and capitalizeunderstand and capitalize on customer and market

segment variationsvariations


Business Market Management, 3rd edition Chapter 1-7

Managing Business Market ProcessesManaging Business Market Processes

Business Process:Business Process: a collection of

activities that take one or more kinds of

input and creates an output that is of value

to the customer



Processes Defined by AllaireProcesses Defined by Allaire

Management

Processes

How the CEO runs the companyHow management interacts with employeesHow decisions get madeHow communication takes place

Business

Processes

Focus is on reengineering effortsLarge, crosscutting collections of activities (product design, order fulfillment, customer service)

Work

Processes

Basic building blocks of business processesHow the work actually gets done



Shareholder ValueShareholder Value

Shareholder Value:Shareholder Value:

when the economic economic returnsreturns generated from realizing its business strategy exceed the cost of exceed the cost of capitalcapital employed

Value Drivers:Value Drivers:Sales growth rates

Operating profit margins

Income tax rate

Working capital investment

Fixed capital investment

Cost of capital

Forecast period



Shareholder Value (Contd)Shareholder Value (Contd)

Translating

customer valuecustomer value into shareholder valueshareholder value

critically depends on business’s ability to

claim an equitable return on the

value it delivers to customers.



Core Business ProcessesCore Business ProcessesProduct

Development Management

(PDM)

Understanding customer requirements and preferencesAnticipating how they will change Constructing solutions that customers are willing to pay for

Supply Chain Management

(SCM)

Incorporates acquisition of all physical and informational inputsEfficiently and effectively transforms processes into customer solutions

Customer Relationship Management

(CRM)

Addresses all aspects of • Identifying customersIdentifying customers• Creating customer knowledgeCreating customer knowledge• Building customer relationshipsBuilding customer relationships• Shaping customer perceptions about the organization Shaping customer perceptions about the organization

and its productsand its products



Contributions to MarketingContributions to Marketing

Making core business processes more

market-driven can result in:

Accelerated and enhanced cash flow Accelerated and enhanced cash flow

Reduced time to marketReduced time to market

Earlier adoption from targeted customersEarlier adoption from targeted customers



Market-Driven ProcessesMarket-Driven ProcessesBusiness Processes

Market-Driven Business Processes

PDMPDM PDMPDM

Design a technically superior product Create solution that enables

customer to experience maximum value and benefit

SCMSCM SCMSCM

Best inputs at cheapest priceDesign, manage, and integrate firm’s

supply chain with suppliers and customers

CRMCRM CRMCRM

Customer relationship is a means to sell, deliver, and service a product

Customer relationship is an opportunity to learn about customers’

needs and wants and how best to create, satisfy, and sustain them


Why Business Marketing Management?Why Business Marketing Management?

Marketing work processes should take

place withinwithin business market processes

Business market processes cutcut acrossacross

functionalfunctional areasareas

Depends upon seamlessseamless

cross-functional cooperationcooperation


Business MarketingBusiness Marketing

Understanding that

advances in marketing

work processes &

marketing relationships

are needed to realize &

profit from

understanding of value.understanding of value.

MarketingMarketing

“The true meaning of

Marketing [is] knowing

what is value for thevalue for the

customercustomer.”

--Peter Drucker

(1980)

business market management (b2b), 3/echapter 1-1copyright © 2011 dorling kindersley (india) pvt....

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