Situation Analysis Report

Business suppliers and their customers are using more vertical coordination and are exploring ways to create more value from their relationships. Customer loyalty is largely driven by early supplier involvement, supply-chain management, and purchasing alliances (Kotler & Keller, 2015). For example, the Renault-Nissan Alliance led by Chairman Carlos Ghosn is able to secure preferential prices from its suppliers. Neither Renault nor Nissan would be able to get the same prices when buying alone. Although vertical coordination of this type may foster strong customer-supplier relationships, it may also involve risks (e.g., limited flexibility). Business to business (B2B) marketers use every available marketing tool to gain and retain customers. They bundle valuable services with their product offerings, use systems selling (i.e., buying a total-solution package from a single vendor), and capitalize on online and offline communications. Furthermore, B2B marketers are increasingly borrowing marketing practices from business-to-consumer markets to create and enhance their brands (Kotler & Keller, 2015). These marketers routinely rely on long-term personal relationships with their major customers, providing useful information and establishing trust to secure big contracts (Zhang, Watson IV, Palmatier, & Dant, 2016). While B2B companies recognize the disruptive power of technology, many have been cautious in anticipating the impact of advances such as the internet, social media, and crowdsourcing on corporate buying behavior. These companies have also been slow to adopt marketing analytical tools and big data, even though these developments could change existing company-wide business practices and models. Changes to company-wide operations require a closer alignment between the business marketers and other functional units within the company. For example, several B2B companies increasingly rely on social media to incorporate the voice of the customer (VoC) to narrow the gap between sales, marketing, and innovation (Spekman, 2015). Much of the B2B sector is in the service business (e.g., hotels, banks, airlines, hospitals, and repair companies), just as many employees in the manufacturing sector, including accountants, lawyers, and IT professionals, are actually service providers. As B2B companies struggle to differentiate their physical products, they are increasingly striving for service differentiation by providing faster customer response, faster complaints resolution, and timely delivery (Kotler & Keller, 2015).

References

Kotler, P. & Keller, K. L. (2015). Marketing management (15th ed.). Upper Saddle River, NJ: Pearson. Spekman, R. E. (2015). The Journal of Business-to-Business Marketing at 21 and my perspective on the field of B to B marketing. Journal of Business-to-Business Marketing, 22(1–2), 87–94. doi:10.1080/1051712X.2015.1020245 Zhang, J. Z., Watson IV, G. F., Palmatier, R. W., & Dant, R. P. (2016). Dynamic relationship marketing. Journal of Marketing, 80(5), 53–90. doi:10.1509/jm.15.0066

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