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The Importance Of Relationships In B2B Add in library

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Questions:

1.In promoting their services to the Manchester region Peter and Harvey intend employing a sales force. Discuss why you think that this is a suitable way of promoting the business. In addition, analyse the options available to the brothers with regards to organising the sales force. Which method do you believe is the most appropriate? Justify your answer.

2.Both Peter and Harvey have highlighted the importance of relationships in B2B. Discuss to what extent relationship variables and business networks are likely to be important for SPSL when establishing their new office in Manchester. How can the company maintain these relationships in order to develop customer loyalty?

3.Although SPSL operates in the B2B sector, long-term they may also decide to enter the B2C market. Analyse the likely differences between the B2B and B2C part of the business, along with the advantages and disadvantages for SPSL marketing its service to both businesses and consumers.

 

Answers:

Introduction:

This report will provide importance of sale force for Saxon Plumbing Services London Ltd (SPSL) regarding to its new office in Manchester. The report will analyze importance of sales people for SPSL and how it is beneficial to hire experience sale force for the company. And also discusses the options available to organize sale force. SPSL has good reputation in market and its relationships and business network will help Manchester office to build their customer base and it will be explained in the report. SPSL specializes in commercial plumbing services for businesses located in South London. And have the client of small and medium sized retailers, manufacturers and insurance companies. The report will identify, analyze and evaluate major difference along with the supply chain between business to business and business to consumer sector.

1. Benefits of hiring sale force:

As Peter and Harvey developing their new office in Manchester which is their first step towards organizational development they also need to have good promotional campaign at Manchester. With the help of best promotional campaign they get help to establish root of their business at Manchester. It is also important in the context that the company is going to increase offices in different region. Peter and Harvey intended to use sales force for their promotional activities and here we will see benefit of using sale force over other promotional tools. Sale force is important for every company and also has highest rates of turnover. Due to high turnover rates many companies focus on entry level sales people but for being consultant of SPSL I will suggest to employ experiences employees as sales people. Because entry level sales people are not good fit for your company and they may not produce on similar level as experiences employees can.

Employing experiences sale force is considered as solid investment for SPSL that will definitely have measurable return for the Manchester office. Below we will see benefit of employing sale force for promoting services and how it is the suitable way of promoting business.

Faster on boarding:

Due to hiring a competent sale team it can increase awareness of SPSL brand in Manchester in short time period. A competent and experiences sales team can heighten loyalty of company and help to increase revenue of the company (Anderson, James and Narus, James, 2004). It is the responsibility of sale team to create excitement around the products and services their company sells. But it is advisable to hire experiences sales people to reduce worry of sales training process. Where new recruiters need to be trained on everything experienced one only needs to be trained on company’s system (Dwyer, Robert, Tanner, John, 2006). It will Saves Company’s time spend on training and also streamline the resources spend of recruiting process.

Confidence Counts:

In addition to generating income the sales force builds trust with customers. Customers being engaged by sales representatives at all stage of relationship, which may not be possible by other promotional tools like media advertising and so on (Greco and John, 2005). Sales executive well known that new customers need interaction and opportunities to learn about the brand. In order to gain trust of current customers’ consistent follow-up and communication with the sales representative is significant. Previous customers of the company also have to re-engage through promotions, discounts, and communications. Building trust throughout the customer sales cycle increases customer satisfaction.

Higher success rates:

 If company need to minimize the rate of turnover and also want to keep people selling, it is require to have a fully qualified sales team working for company. It really not needed to worry about the close rates with your sales team. The recipe for success is actually quite simple. Experience counts particularly in sales.  If a company has efficient sales people the company can overcome objections without being rejected (Hutt, Michael, Speh, Thomas, 2004). The objections sales people think difficult to overcome are when customers refuse the product by saying they cannot afford it or by stating that they want to think before purchasing.

With the use of social media company can easily connect to its customers and can promote their sales campaigns and customer can gain information about the company on single click (Morris, Michael, Pitt, Leyland and Honeycutt, Dwight, 2001). Due to the modern technologies market is become more global and accessible from every place and hence it increases competition. SPSL uses B2B marketing currently where competition is influenced through market structure at national level. In B2B marketing there is difference between monopolies in single region of a country and competing on national platform (Kotler, 2010). It simply implies that SPSL can have monopoly in the South London area but other competitors are representing in the European market. In B2C market competition is tougher than B2B because competition is more directed towards the consumer (Reid, David and Plank, Richard, 2004). While marketing services to businesses SPSL have to build its contacts stronger than its competitor.

 

2. Develop Customer Loyalty:

In business marketing organization require to facilitate sales of their product and increase use of services through the people. It is well known that commercial market of plumbing is highly competitive and is also experiencing significant growth (Needham, Dave, 1996).  The market is fragmented and is also made up of large number of small and medium sized enterprise having in different services and generally poor reputation. SPSL located in South London region have competition with the local services provider as well as with the companies having national networks. However, SPSL prides itself on its ability to compete with other firms through its excellent customer service and fast emergency response. But in the competitive environment as SPSL started its new office in Manchester it needed to achieve customer loyalty. As we discussed above that the sales force are effective to gain customer base but it is also important to achieve customer loyalty which would be possible only by providing best services (Leslie Line 2011). Promotional campaign is also important in this sense because advertisement and strong promotional campaign have strong impact on customer base.

The way to strengthen customer loyalty is improving service facility and providing more and more sophisticated services. With the help of best promotional campaign they get help to establish root of their business at Manchester. It is also important in the context that the company is going to increase offices in different region. Peter and Harvey intended to use different ideas for their promotional activities and here we will see benefit of using sale force over other promotional tools. Customer loyalty is important for every company and also has highest rates of turnover. Due to high turnover rates many companies focus on entry level sales people but for being consultant of SPSL I will suggest to employ experiences employees as sales people to gain customer loyalty and retain customers. Now will talk about the procedure usually followed is customer call for plumbing service and operator gets all the information from customer. After that the operators checks plumbers schedule and inform customer the name of plumber coming to provide the service. In Manchester office SPSL has to provide new facilities to its customer like operator have to refer customer to the website where he can check complete information of that plumber along with his picture. Through reading the information about the plumber customer ensures the plumbers background and feels comfortable to assign the plumbing work of their home.  

3. B2B versus B2C marketing

This part of the report will highlight and analyze most significant difference between B2B and B2C marketing in the context of providing SPSL which require expanding its business under B2C. The obvious difference between B2B and B2C part of business is regarding to its promotions and advertising of SPSL’s products and the buying decision of its customers. Business buyers of SPSL purchase their services for use in their companies and hence for them factors of interest are quality of product, its price and other economic aspects. Consumers buy the product and services for their personal use. SPSL has wide range of commercial organization industrial companies and large insurance companies as its client base. SPSL have visions of entering in the B2C sector. Unpremeditated purchasing is the characteristic of B2C markets in contras B2B are more planned and controlled.

Marketing Mix:

The major difference between B2B and B2C marketing has been commenced at this point along the supply chain with the marketing mix. Goal of the marketing mix is to get success on market concerned and it combine marketing approaches (Lancaster, Geoff; Massingham, Lester; Ashford, Ruth, 2001). The classification of approaches is popularized in four groups which are the four P’s and that are given below:

Product

It is most significant element of four P’s and makes good service and idea offered by SPSL. Under the context of B2C marketing the packaging, the styling of plumbing product, services provided by SPSL like repair, maintenance are significantly important. The B2C marketing is mostly talked when SPSL will leave the manufacturer and are on their way to the wholesaler. It requires that wholesaler should know whether the plumbing product and services provided by SPSL will find subsequently good outlet disposal to retailer or not. In that context characteristics got extreme importance are packaging and external look. On the other hand B2B marketing it is essential to have sufficient raw material stock and consistent quality. It is also significant for guaranteeing the reliability of final product that is product should be prefabricated along with the supply chain (Dibb, Sally; Simkin, Lyndon; Pride, William, 2005).

Price:

In the B2C business where SPSL want to enter every consumers buying the product have to pay the same price, where currently in B2B business which SPSL operating price may vary as per the customer. Because in B2B customers placing large orders or the customers negotiated with different term have to pay different price than other customers. In B2C business transaction, after selecting products they will instantly pay for their purchased items through different payment mechanism. B2B has complex business mechanism. Order has been placed and then delivery is arranged through agreed logistic channel. Customer get invoice which is settled in payment term. In B2C markets personal problems like being emotional and rational will occur (Higgins, Robert, 1977). But in B2B business process such problems tend to be more organizational and also rational way.

SPSL is B2B organization and hence direct marketing is primarily of interest for distribution. Direct marketing indicates that product is available to customer through producer distribution. B2C organizations execute indirect marketing, which indicates that distribution is carried out through an intermediary. In B2C business product price increases and influences the supply chain by raising products value.  

Place:

Place is associated with the distribution, SPSL is located in South London and will target the large number of client within the South London area through B2B marketing. Marketing mix incorporate two components and those are channel management and logistics management. Channel management operated through the process of operating through the contractual organization and setting up and that include various intermediate like wholesalers, agents, retailers etc. On the other hand logistic management provide products at fixed times and places. Along with the supply chain intermediates also exist and they want payment of their work. This includes suppliers and sub suppliers of raw materials. The raw materials are use for production of SPSL’s products. As per the complexity of task and quantity intermediary margin grows.

Promotion:

For interacting with customers, middlemen and overall population SPSL uses various promotional. Key instrument of promotion is advertising through different media, sales promotion and personal selling. Currently the promotional tools SPSL using are through internet advertising by its website, advertising in local newspaper and significant promotion is word of mouth publicity. Up to now SPSL is working in B2B market but as it want to expand in B2C markets, it should be noted that advertising in B2B and B2C have difference due to larger or smaller markets. In order to increase sale and attract new customer sales promotion is best for both B2B and B2C markets ( Bornsen, Korner, Florian, 2011). In B2C market SPSL can use sales promotion as ‘pull promotion’ campaign. Concerning SPSL in B2C marketing the sales promotion would be performed is more content for the same price.

 

Analysis of advantages and disadvantages for SPSL marketing its services to businesses and Consumer:

Advantages:

New target customer and market:

For well known stages of SPSL life cycle, such as company owners developing new office of company in Manchester and this step is considered as way of significant organizational development. Currently the company has well image and reputation in the south London region. Hence its step of marketing services to business and consumers tends SPSL towards change. New technologies are used through B2B marketing which enables SPSL to increase its customer base and customer can use company’s services from most of the regions. It will also impose pressure on buyers that they want to buy the product and services from SPSL due to its good reputation which increase the competitive advantage of buyer and SPSL too. It is important that suppliers have to be evaluated and benchmarked on continuous basis. Some companies evaluate a potential supplier for first few years before starting cooperation with them (Fonseka, Mohan; Tian, Gaoloang, 2011). In terms of B2C marketing, whole supply chain of SPSL would be influenced due to the buying decision of consumer.

Can get new target group which increase additional revenue:

With the help of using marketing to business i.e. B2B sector SPSL can increase their contact. They can build contact to new target group which enable SPSL to pursue new opportunities of sales. The customers are get attracted by using B2B shop which having public catalog and hence more visitors also attracted with the help of search engines applied in online store. Revenues of SPSL would be expanded and obtained further with the help of advanced cross-selling and up-selling of related or additionally useful services and products.

Long term customer loyalty:

It is also assumed that customers in B2B services are more loyal than B2C services. Customers at B2B sector have commitment with the company; those customers are committed as supplier by contracts and agreements. This means in marketing to Business Company utilizes lower acquisition costs and can retain the long lasting customer relations. This loyalty and relationship with customer can be long lasted by offering customer oriented services and products.

 

Disadvantages:

Competition:

Competition is considered as disadvantage for SPSL which is marketing its services in South London region to businesses running there and customers. Today every business faces tough competition from their rivals and same apply for the SPSL. Though SPSL running good business in its region and having good word of mouth publicity and loyal customer base, but it not going to be applied to its new office in Manchester. Due to the modern technologies market is become more global and accessible from every place and hence it increases competition. SPSL uses B2B marketing currently where competition is influenced through market structure at national level. In B2B marketing there is difference between monopolies in single region of a country and competing on national platform. It simply implies that SPSL can have monopoly in the South London area but other competitors are representing in the European market. In B2C market competition is tougher than B2B because competition is more directed towards the consumer. While marketing services to businesses SPSL have to build its contacts stronger than its competitor. The middlemen working with SPSL judge the company on various parameters like qualification of plumber, service providing time, availability of services on time and on demand, response at emergency and so on. For marketing to customer SPSL have to be more careful, they have to research the markets and create competitive advantage over its competitor.  

Long purchase decision time:

In marketing to consumers the decision about purchasing have been taken by one or probably two decision makers and time required to confirm the purchase decision is less. In terms of B2B marketing set of factors are complicated as it involves multiple stakeholders in decision making process. The decision time for purchasing may be long for months. While marketing with businesses the sellers cannot depend on fast turnaround with new client.

 

Conclusion:

SPSL need to gain competitive advantage on its competitors because not only regional but also companies providing national services are competitors of SPSL. It is good step for SPSL that it opened new office in Manchester for its organizational development. The report provides how the company can use B2B and B2C marketing more effectively to perform well in its targeted market. Also it highlighted the advantages and disadvantages of using these marketing tools. Customer loyalty is key part of any business to become successful and hence report suggesting way to achieve customer loyalty. It also talks about how sale force will help new office at Manchester to attract customer and increase sales. It is beneficial to recruit experienced sales people than inexperienced one because they will increase the company’s performance in short time period.  The market is fragmented and is also made up of large number of small and medium sized enterprise having in different services and generally poor reputation. SPSL located in South London region have competition with the local services provider as well as with the companies having national networks. However, SPSL prides itself on its ability to compete with other firms through its excellent customer service and fast emergency response.

 

Reference List:

Anderson, James C., and Narus, James A. (2004) Business Market Management: Understanding, Creating, and Delivering Value, 2nd Edition, 2004, Pearson Education, Inc.

Business Marketing Association (2003) "Marketing Reality Survey"

Dwyer, F. Robert, Tanner, John F. (2006) Business Marketing: Connecting Strategy, Relationships, and Learning, 3rd Edition, McGraw-Hill/Irwin

Greco, John A. Jr., (2005) "Past indicates promising future for b-to-b direct; BtoB magazine, June 13, 2005

Hutt, Michael D., Speh, Thomas W. (2004) Business Marketing Management: A Strategic View of Industrial and Organizational Markets, 8th Edition, Thomson/South-Western

Morris, Michael H., Pitt, Leyland F., and Honeycutt, Earl Dwight (2001) Business-to-Business Marketing: A Strategic Approach, Sage Publications Inc.

Reid, David A., and Plank, Richard E. (2004) Fundamentals of Business Marketing Research, Best Business Books, an Imprint of The Haworth Press, Inc.

Philip kotler(2010), Marketing Management, Dorling Kindersley (India), 3rd edition, p185

Needham, Dave (1996). Business for Higher Awards. Oxford, England: Heinemann

Leslie Line (2011), The 4P Marketing Strategy - How to Choose the Right Products [Online] February 22, 2011.Availablefrom:https://ezinearticles.com/?The-4PMarketing-Strategy---How-to-Choose-the-RightProducts&id=5977467 [Accessed date: 19 March, 2013]

 Siddharth Philip(2012) Tata to Buy Chinese Auto Parts at ‗Unbelievable‘ Prices[Online] July 09, 2012.Available from:https://www.businessweek.com/news/2012-07- 09/tata-to-buy-chinese-auto-parts-at-unbelievableprices

 U.S. Department of Labor, Bureau of Labor Statistics, "Sales Representatives, Wholesale and Manufacturing," inOccupational Outlook Handbook, 2004–2005 ed., Bulletin 2540 (Washington, DC: GPO, 2004).

John C. Zimmer is president of Global Medical Alliance LLC (Middleton WI), a networking consultant firm that aligns medical device manufacturers with independent sales representatives.

Lancaster, Geoff; Massingham, Lester; Ashford, Ruth (2001): Essentials of Marketing: Text and Cases, Mcgraw-Hill Higher Education, p. 535

Dibb, Sally; Simkin, Lyndon; Pride, William (2005): Marketing.Concepts and Strategies, 5th edition, Houghton Mifflin, p. 676

Higgins, Robert (1977): How much growth can a firm afford, Financial Management 6 (3) p. 7-16

 Bornsen, Arne; Korner, Florian (2011): Optimal Growth, Conceptualization of a strategy to benefit from Optimal Growth, Mannheim Business School

Fonseka, Mohan; Tian, Gaoloang (2011): The most appropriate Sustainable Growth Rate (SGR) Model for Managers and Researchers, American Accounting Association

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