Chap002 the character of business marketing

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Chap002 the character of business marketing

  1. 1. Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display 2-1
  2. 2. Chapter 2 The Character of Business Marketing2-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-2
  3. 3. CESSNA AIRCRAFT COMPANY TURNAROUND STRATEGYINTEGRATED THREE CRITICAL PROCESSES: 1.NEW PRODUCT DEVELOPMENT 2.STRATEGIC SOURCING 3.SUSTAINING PRODUCTION2-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-3
  4. 4. SUPPLY CHAIN MANAGEMENTSCM INVOLVES . . . INFORMATION SHARING JOINT PLANNING COORDINATION OF EFFORTS TO • ELIMINATE WASTE • BE INNOVATIVE • IMPROVE QUALITY • PROVIDE FLEXIBILITY 2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-4
  5. 5. BUSINESS TO BUSINESS: WHAT DETERMINES A SUCCESSFUL RELATIONSHIP? MOTIVATION !• THE SELLER’S MOTIVATION TO RELATE• THE BUYER’S MOTIVATION TO RELATE IF THEY AREN’T EQUALLY MOTIVATED IT WON’T BE AN EQUAL RELATIONSHIP2-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-5
  6. 6. BUSINESS TO BUSINESS: THE TYPES OF RELATIONSHIPS WHEN SELLER’S MOTIVATION TO RELATE IS HIGH RESULTS IN RESULTS IN BUYER’S STRATEGIC ADVANTAGE PARTNERSHIPSLOW HIGH BUYER’S MOTIVATION TO RELATE IS TRANSACTIONAL SELLER’S RELATIONSHIPS ADVANTAGE LOW 2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-6
  7. 7. THE REALM OF RELATIONSHIPS Seller’s motivation to relate High Seller-maintained Joint relation Buyer’s Market relationship maintenance Buyer’sLow High motivation Buyer-maintained to relate relation Discrete exchange (spot contracts) No exchange Seller’s market Low EXHIBIT 2-22-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-7
  8. 8. STRATEGIC PARTNERSHIPS OCCUR WHEN BOTH PARTIES HAVE MUTUALLY STRONG INTERESTS IN MAINTAINING AN ONGOING EXCHANGE2-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-8
  9. 9. JIT RELATIONSHIPSA SUPPLIER PRODUCES AND DELIVERS PRECISELY . . .• THE NECESSARY QUANTITIES• AT THE NECESSARY TIME• WITH THE NECESSARY PERFORMANCE SPECIFICATIONS . . . EVERYTIME2-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-9
  10. 10. GOING FOR HIGHPERFORMANCE RELATIONSHIPS SELLERS DEVELOP BUYERS Want to: A Want: Sell Large COMMON Reliable delivery Volumes without GROUND interruptions Sell similar amounts over time Reliable products with low rejection Manage their and defect rates selling and support expenses Efficient lead times2-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-10
  11. 11. REQUIREMENTS FOR HIGH PERFORMANCE RELATIONSHIPSGOES BEYOND THE FINANCIAL CONSIDERATIONS: • INTEGRITY • FAIRNESS • LOYALTY • FLEXIBILITY • INPUT INTO YOUR PARTNER’S STRATEGY • PARTNER’S INPUT INTO YOUR STRATEGY • COMPLIANCE WITH PROCEDURES AND AGREEMENT • HONOR COMMITMENTS • STAND BEHIND YOUR PRODUCTS 2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-11
  12. 12. THE RELATIONSHIP DEVELOPMENTPROCESSRelationship phase Phase characteristics1. Awareness 1 No interaction. Unilateral considerations of potential Partners. .2. Exploration 2 Interaction between the parties Communication Power & occurs. A gradual increase in . Attraction dependence reflects probing and . & bargaining justice testing. Termination of this fragile association is simple Norm Expectations3. Expansion development development 3 One party has made a successful request for adjustment. Both . parties are satisfied with some customization involved. Additional benefits from products, services, or terms are sought from the current partner rather than from an alternative partner.4. Commitment 4 Some means of sustaining the relationship result contracts, shared . Shared values and decision- ownership, social ties, inputs are making structures significant and consistent. Partners support joint investment in relation. adapt and resolve disputes internally 0 Seller’s dependence on buyer Buyer’s dependence on seller 0Source: Adapted from F. Robert Dwyer, Paul H. Schurr, and Sejo Ob, “Developing Buyer-Seller Relationships.: Used with permission from the Journal ofmarketing, published by the American Marketing Association, vol 52 (April 1987), p.21. 2-McGraw-Hill/Irwin Exhibit 2-4 Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-12
  13. 13. TWO CHOICES FOR STAYING IN A BUSINESS RELATIONSHIP1. YOU WANT TO. • THE REWARDS ARE FINANCIAL, STRATEGIC OR PSYCHOLOGICAL1. YOU HAVE TO. • THE COST TO EXIT IS TOO HIGH OR THERE ARE NO ALTERNATIVES2-McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-13
  14. 14. SUGGESTIONS FOR MAKING BUSINESS- TO-BUSINESS RELATIONSHIPS LAST• MAKE ON-SITE VISITS TO YOUR PARTNER• TRADE PERSONNEL AND OFFICES• MANAGE TOTAL DEPENDENCE WITH AN ALTERNATE SUPPLIER• MAKE THE PLEDGE OF CONTINUOUS SERVICE• DEVELOP A RELATIONAL CONTRACT• PROVIDE OWNERSHIP BY BRINGING FUNCTIONS OR TECHNOLOGY WITHIN BOUNDARIES OF PARTNER’S FIRM 2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 2-14

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