Lec 15- Understanding Organizations as Customers-3

Summary

This video script delves into the intricacies of business marketing, focusing on developing effective marketing programs and managing B2B relationships. It covers transitioning from product to solution selling, enhancing services, building B2B brands, overcoming price pressures, and managing communications. The module also explores the unique aspects of institutional and government markets, offering insights into the dynamics of supplier and buyer relationships and the importance of trust, credibility, and reputation in business dealings.

Takeaways

• 📈 **Developing Business Marketing Programs**: The script emphasizes the importance of creating effective business marketing strategies that transition from product-focused to solution-oriented approaches.
• 🤝 **Managing B2B Relationships**: Understanding and classifying buyer-seller relationships is crucial for managing corporate trust, credibility, reputation, and operationalism in business.
• 🛠️ **System Selling**: The concept of system selling, where a single supplier provides a total problem solution, is highlighted as a key marketing tool, especially in industrial marketing strategy.
• 🔄 **Transition to Services**: There's a clear trend in business where products are transitioning into services, with companies like Rolls-Royce offering long-term repair and maintenance contracts for added value.
• 💼 **Enhancing Services**: High-quality services are being added to product offerings to provide greater value and establish closer ties with customers, as seen with companies like Adobe Systems.
• 🏢 **Building B2B Brands**: The significance of brand recognition in business-to-business marketing is underscored, with brands like ABB undergoing rebranding to strengthen their market position.
• 💬 **Overcoming Price Pressures**: Various strategies are discussed to counter price-oriented buyers, including user framing, total cost of ownership, and emphasizing the value of services.
• 📊 **Economic Value Analysis**: A tool for monetizing the functional benefits of a company's offering is introduced, which helps communicate the value proposition to customers more effectively.
• 🌐 **Managing Communication**: The role of online communication, including SEO and social media, in B2B marketing is highlighted, with examples of companies leveraging these channels for better performance.
• 🤔 **Understanding Buyer-Supplier Relationships**: The development of relationships between business partners is influenced by factors such as availability of alternatives, supply importance, and market dynamism.
• 🏦 **Institutional and Government Markets**: Specific features of institutional and government buying practices are discussed, including the preference for lowest bidder contracts and the need for detailed guidelines for suppliers.

Q & A

What is the main focus of Module 15 in the 'Introduction to Marketing Essentials' course?

Module 15 focuses on developing effective business marketing programs, managing B2B relationships, understanding buyer-seller dynamics, and managing corporate trust, credibility, reputation, risk, and operationalism in business.

What is the difference between individual customers and organizational customers?

Individual customers are single consumers making purchases for personal use, whereas organizational customers are entities such as businesses or institutions that make purchases for commercial, industrial, or institutional use.

What is the concept of 'system buying' and how did it originate?

System buying is a practice where business buyers prefer to purchase a total problem solution from one seller. It originated with government purchases of major weapon and communication systems, where prime contractors were responsible for assembling the systems from subcomponents provided by second-tier contractors.

How do technology giants like HP, IBM, Oracle, and Dell adapt to the shift to cloud-based services?

These technology giants are transitioning from specialists to One-Stop shops, providing the core technology necessary as businesses shift to the cloud, often by adding systems selling as a marketing tool.

What is 'system contracting' and how does it benefit both the supplier and the customer?

System contracting is a single supplier providing the buyer with all its maintenance, repair, and operating (MRO) requirements during the contract period. It benefits the customer by reducing procurement and management costs and offering price protection, while the seller achieves lower operating costs due to steady demand and reduced paperwork.

How does Rolls-Royce enhance its services to provide greater value to customers?

Rolls-Royce enhances its services by offering long-term repair and maintenance contracts for its jet engines, which not only provides a source of profit but also gives customers peace of mind and predictability.

What is the significance of the subscription model in the context of digital marketing businesses like Adobe Systems?

The subscription model eliminates the need for constant persuasion for users to upgrade to newer versions, as upgrades happen automatically. It also increases revenue as companies can sell support services to their cloud customers.

Why is building a strong corporate brand important in B2B marketing?

A strong corporate brand provides assurance of product quality, making it easier to justify purchases to stakeholders. It also helps in establishing trust and can be a key differentiator in the marketplace.

How can companies counter requests for lower prices in B2B transactions?

Companies can counter price requests by demonstrating the total cost of ownership, highlighting superior services, showcasing supplier knowledge and ability to improve customer time to market, and using economic value analysis to monetize the functional benefits of their offerings.

What is the role of communication in managing B2B relationships?

Communication is crucial for informing business customers about the benefits of offerings, coordinating activities with collaborators, and moving into the online space using SEO, SEM, social media, webinars, and other digital tools to connect with buyers.

How do institutional and government markets differ from other B2B markets in terms of purchasing practices?

Institutional and government markets often require suppliers to submit bids and may award contracts to the lowest bidder, with allowances for quality or timely completion. They also involve more paperwork, public review, and bureaucracy, with a focus on cost justification and past performance.

Outlines

00:00

📚 Module 15: Understanding B2B Marketing Strategies

This paragraph introduces Module 15, focusing on developing effective business marketing programs. It discusses the transition from product to solution-oriented marketing, managing B2B relationships, and addressing the unique aspects of institutional and government markets. The importance of systems selling, where businesses prefer a total problem solution from a single seller, is highlighted. The concept of 'turnkey solutions' is explained, where the seller provides a complete, ready-to-use system. Additionally, the paragraph touches upon system contracting, where a single supplier is responsible for all maintenance and operational requirements during the contract period, and the role of technology giants like HP, IBM, and Oracle in this transition.

05:02

🛠 Enhancing Services and Building B2B Brands

The second paragraph delves into the strategic and financial importance of services for B2B firms, using Rolls-Royce as a case study to illustrate how companies can establish closer ties with customers through long-term repair and maintenance contracts. It also discusses the bundling of services by technology firms for improved customer satisfaction and increased profits, with Adobe Systems as an example of transitioning to a cloud-based subscription model. The paragraph further explores the significance of branding in B2B marketing, using ABB and Emerson Electric as examples of companies that have strengthened their global market positions through rebranding and unified brand identities.

10:03

🤝 Managing B2B Relationships and Economic Value Analysis

This paragraph examines the dynamics of buyer-supplier relationships in B2B markets, emphasizing the importance of vertical coordination to create more value for both parties. It discusses how factors such as the availability of alternatives, supply importance, supply complexity, and market dynamism influence these relationships. The concept of economic value analysis is introduced as a tool to monetize the functional benefits of a company's offerings, such as performance and reliability. The paragraph also covers various strategies to overcome price pressures, including economic value analysis, improving communication of benefits, and demonstrating the total cost of ownership.

15:05

💼 Trust, Credibility, and Reputation in B2B Partnerships

The fourth paragraph focuses on the critical aspects of building trust, credibility, and reputation in B2B relationships. It explains that corporate trust is based on factors such as perceived competence, integrity, and personal interactions, while corporate credibility is influenced by expertise, trustworthiness, and likeability. The paragraph also discusses the challenges of safeguarding against opportunism and the risks associated with specific investments in company-specific training, equipment, and procedures. It highlights the role of joint ventures as a means to signal a higher level of commitment in collaborative relationships.

20:05

🏛 Navigating Institutional and Government Markets

This paragraph addresses the unique features of institutional markets, such as schools, hospitals, and prisons, which are characterized by low budgets and captive clients. It discusses the procurement practices of government organizations, which often involve bidding processes that favor the lowest bidder, with some exceptions for quality and timely completion. The paragraph also touches on the challenges faced by multinational companies operating in Europe, where national favoritism can impact the bidding process. It concludes with an overview of efforts by the European Union to remove such biases and the various reforms aimed at simplifying contracting procedures and increasing transparency in government procurement.

25:06

🌐 Conclusion: Effective Business Marketing Strategies

The final paragraph summarizes the key points of Module 15, which include developing effective business marketing programs by transitioning from product to solution-oriented approaches, enhancing services, building B2B brands, overcoming price pressures, and managing communications. It also recaps the discussion on managing B2B relationships and the special considerations for institutional and government markets. The paragraph concludes by acknowledging the source material for the module and thanking the audience, signaling the end of the presentation.

Keywords

💡Business Marketing Program

A business marketing program is a strategic approach that businesses use to promote their products or services to other businesses. In the video, the development of an effective business marketing program is discussed as a way to transition from product-centric to solution-oriented marketing, which is essential for understanding how to better serve organizational customers.

💡B2B Relationships

B2B stands for 'business-to-business,' and B2B relationships refer to the interactions and connections between two businesses. The video emphasizes the importance of managing B2B relationships by understanding buyer-seller dynamics, which is crucial for building trust, credibility, and long-term partnerships in the business market.

💡System Selling

System selling is a marketing strategy where a company provides a total solution to a customer's problem, often involving the integration of multiple products or services. The video script mentions system selling as a practice that originated with government purchases and has been adopted by tech giants like HP, IBM, and Oracle to transition from specialists to one-stop shops.

💡Turnkey Solution

A turnkey solution is a comprehensive package offered by a company that is ready to be implemented by the customer with minimal effort. The term is used in the script to illustrate how system selling provides a complete solution, where the buyer simply 'turns a key' to start using the system, highlighting the convenience and efficiency of such an approach.

💡Maintenance, Repair, and Operating (MRO)

MRO refers to the activities and processes involved in maintaining, repairing, and operating equipment and machinery. In the context of the video, system contracting is discussed, where a single supplier provides all MRO requirements for a business, offering benefits such as reduced procurement costs and price protection.

💡Total Cost of Ownership (TCO)

TCO is a financial estimate of the total costs related to the purchase of a product, including not only the initial purchase price but also ongoing costs such as maintenance and upgrades. The script uses TCO as an example of how businesses can differentiate themselves by showing that their product's life cycle cost is lower than competitors', thus providing better value.

💡Economic Value Analysis (EVA)

EVA is a tool used to quantify the financial benefits of a company's offerings, such as performance and reliability. The video explains that by using EVA, companies can monetize and communicate the functional benefits of their products or services, making the value proposition more transparent to customers.

💡Brand Architecture

Brand architecture refers to the organization of a company's brands and sub-brands. The script discusses how companies like Emerson Electric use brand architecture to align their various brands under a unified global identity, which helps in leveraging the global brand name while catering to local markets.

💡Institutional Markets

Institutional markets consist of organizations like schools, hospitals, and prisons that provide goods and services to people in their care. The video script highlights the unique characteristics of institutional markets, such as low budgets and captive clients, and the importance of understanding these markets for effective business marketing.

💡Government Procurement

Government procurement refers to the process by which government agencies purchase goods and services. The script explains that government organizations often require suppliers to submit bids and may award contracts to the lowest bidder, but also considers quality and timely completion. Understanding government procurement processes is crucial for businesses aiming to sell to the government.

💡Opportunism

In the context of business relationships, opportunism refers to self-interested behavior in a transaction that is not in the best interest of the other party. The video discusses how specific investments in a relationship can lead to increased risk of opportunism, where one party may take advantage of the other due to the sunk costs involved.

Highlights

Introduction to Module 15 focusing on understanding organizations as customers and the two types of entities: individual and organizational customers.

Explaining the development of an effective business marketing program and managing B2B relationships through understanding buyer-seller dynamics.

The transition from product-focused to solution-oriented business strategies, emphasizing system buying and the role of prime contractors.

The concept of system contracting, where a single supplier provides maintenance, repair, and operating requirements during the contract period.

The importance of services in B2B marketing, with examples like Rolls-Royce's long-term repair and maintenance contracts for jet engines.

Technology firms bundling services for improved customer satisfaction and profits, illustrated by Adobe Systems' transition to cloud-based subscriptions.

The significance of building B2B brands for peace of mind and justifying purchases, exemplified by Swiss-based ABB's rebranding project.

Emerson Electric's global brand consolidation to leverage its brand name while selling locally, aligning with a new global brand architecture.

Countering price-oriented buyers through user framing, total cost of ownership, and emphasizing superior services over competitors.

Economic value analysis as a tool to monetize the functional benefits of a company's offering, such as performance and reliability.

The role of marketing communication in B2B markets, including online presence, SEO, social media, webinars, and digital marketing.

Makino's use of industry-specific webinars to build relationships with end-user customers and improve marketing efficiency.

Adopting B2C marketing practices in B2B to build brand recognition, as seen in Xerox's integrated communication campaign.

Managing B2B relationships through vertical coordination, focusing on creating value for both parties beyond simple transactions.

The importance of corporate trust, credibility, and reputation in building long-term B2B relationships and ensuring healthy cooperation.

Managing institutional and government markets, addressing their specific features such as low budget, captive clients, and public review.

Government procurement practices, including the preference for the lowest bidder and the move towards online purchasing and e-procurement.

Strategies for companies selling to the government, such as establishing separate government marketing departments and providing strong communications.

Conclusion summarizing the module's key points on developing business marketing programs, managing B2B relationships, and understanding institutional and government markets.

Transcripts

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introduction to marketing Essentials now

we will talk about module 15.

now as you can see from this slide

module 13 14 and 15 we are

trying to understand organizations as

customers so there are two types of

entities that act as customers one is a

individual customer and then there are

organizational customers

so this is part three of that and we are

we are in module 15.

in this module we will explain how to

develop effective business marketing

program

how to manage B2B Relationships by

understanding buyer seller relationships

classifying buyer sellers relationship

and then managing corporate trust

credibility reputation risk and

operationalism in the business

we will also explain how to manage

institutional and government markets

so these two are together we are

coupling them as organization markets

so all although we will talk about them

separately to start with business to

business marketers are using every

marketing tool at their disposal to

attract and retain customers

they are embracing systems selling

adding valuable services to their

product offerings employee customer

reference programs and also utilizing a

wide variety of offline and online

communication and branding activities so

now there there is a transition there is

a change from products to Solutions

so we will now try to understand this

transitioning from product to Solutions

so many business buyers prefer to buy a

total problem solution

from one seller

and this practice is called as system

buying

which originated with government

purchases of major weapon and

communication systems the government

solicited bids from Prime contractors

that if awarded the contract became

responsible for bidding out and

assembling the systems subcomponents

from second tier contractors

the prime contractor then provided a

turnkey solution

so called because the buyer simply had

to turn one key to get the job done

sellers increasingly recognize that

buyers like to purchase in this way and

many have added systems selling as a

marketing tool

technology Giants such as HP IBM Oracle

Dell are all transitioning from a

specialist

to competing One-Stop shops that can

provide the core technology necessary as

business shifts to the cloud

one variant of system selling is system

Contracting

in which

single supplier provides the bias with

all its maintenance

repair and operating mro requirement

that is maintenance and repair

organization

during the contract period the suppliers

also manage customers inventory for

instance Shell Oil manages the oil

inventories of many of its business

customers and know when they require to

be topped up

the customer benefits

from reduced procurement and management

cost as well as from price protection

over the term of the contract

the seller achieves lower operating cost

thanks to steady demand and reduced

paperwork

system setting is a key to Industrial

marketing strategy

in bidding for large scale industrial

projects such as

construction of dams sanitation systems

pipelines utilities and even

whole new towns after the products have

been transitioned into Services now let

us look at how to enhance those services

so Services play an increasingly

strategic and financial role

for many business to business firms that

sell primary products adding high

quality services

to their product offerings allow

companies to provide greater value

and establish closer ties with the

customers a classic example is Rolls

Royce which has invested heavily in

developing giant jet engine models for

the new jumbo planes being introduced by

Boeing and Airbus

so these aircraft from Boeing an Airbus

they have these engines from Rolls Royce

an important source of profits for

Rolls-Royce Beyond selling engines and

replacement parts is the add-on powered

by the r long term repair and

maintenance contract it sells margins

are higher because customers are willing

to pay a premium for the peace of mind

and predictability

the contract offers

technology firms are also bundling

services

for

improved customer satisfaction and

increased profits like many software

firms Adobe Systems is making the

transition to a digital marketing

business with cloud-based monthly

subscriptions

for example Adobe products such as

Photoshop illustrator and InDesign have

moved online to become subscription

Based Services

a particular benefit for companies

offering such Services is that the

subscription model eliminates the need

to constantly try to convince the users

who have purchased the product in the

past to upgrade

to a newer version in the subscription

model it happens automatically revenue

is also increasing because the company

is able to sell Support Services to its

Cloud customers now after the product

has transitioned to the service and we

have looked at enhancing the service now

let us look at building business to

business brands

business marketers are increasingly

recognizing the importance of their

brands brand give manager Peace of Mind

by ensuring product quality and thus

make it easier to justify the purchase

of established Brands to the complete

stakeholders as the old thing goes

nobody gets fired for buying IBA

consider Swiss based ABB a global leader

in power and automation Technologies

with with 110 000 employees in more than

100 countries the company's spends

dollar one billion in r d annually to

fuel a long tradition of groundbreaking

and nation building projects ABB under

two connector extensive rebranding

project that evaluate five alternative

position platforms concluding that ABB

should stand for power and productivity

for a better world

so that was that become their

positioning

in a one company one brand approach

magazines posters brochures digital

communication and even exhibits were all

revamped to give the brand a unified

look and strengthen it Global Marketing

and strengthen its Global Market

position

most of the ABB business advertising

contains images of actual projects with

business specific messages that explain

Technologies in business to business

marketing the corporate brand is often

critical because it is associated with

so many of the company's product at one

time Emerson Electric a global provider

of power tools compressors electrical

equipment and Engineering Solutions was

a conglomerate of 60 autonomous and

sometimes enormous companies

200 broader presence so it could sell

locally while leveraging its Global

brand name Emerson aligned the brands

with a new Global brand architecture and

identity so these are the two things

brand architecture and brand identity

Global consolidation cut the number of

company website in half online content

and marketing campaign were translated

into local languages around the world

and the social media platforms were

built out

SAS is another form that recognizes the

importance of its corporate brand

this fight moves towards strategic

sourcing partnering and participation in

cross-functional teams seller still

spends a large chunk of their time

haggling with suppliers on price the

number of price oriented buyers can vary

by a country

depending on the customer preferences

for different service configurations and

the characteristics of the customer

organization

marketers can counter request for a

lower price in a number of ways how one

is user framing as we have noted that

previously they may also be able to show

that the total cost of ownership that is

the life cycle cost of using their

product is lower than that of

competitors product so this is what

becomes a differentiator

the life cycle cost of using their

product is less than that of the

competitors so they can cite the value

of the services the buyers now receive

especially if it is superior to that

offered by competitors researchers show

that service support and personal

interaction as well as suppliers know

how and ability to improve customer time

to Market can be useful differentiators

in achieving key supplier status

improving productivity helps Elevate

price pressures some companies handle

price oriented buyers by settling a

lower price by setting a lower price but

establishing

restrictive conditions such as limited

quantities no refunds no adjustments no

Services others seek solutions that

increase benefits and reduce cost enough

to overcome any price concern lowering

the price and increasing benefits are

not the only ways to overcome price

pressure

so that is not the only way

in some cases the issue is not improving

the offering but better communication

the benefit that the offerings already

delivers to the customer so now you only

have to communicate the benefits the

popular approach in making the value of

the offering more transparent to

customers is the economic value analysis

so what is this economic value analysis

is a tool that helps monetize the

functional benefits of the company's

offering

such as performance reliability and

warranty so because now you see that

communication has become so important

therefore now let us look at managing

communication all the marketing

communication is usually associated with

consumer markets okay but it also plays

an important role in business markets

companies need to inform business

customers about the benefits of their

offerings as well as coordinating their

activities with collaborators as is the

case in consumer markets business

communication are increasingly moving

into the online space

using search engine optimization and

search engine marketing to connect with

buyers

one example of the weight of firms are

redesigning their online presence

employing search engine optimization

engaging in social media

launching webinars and Port cost to

improve their business performance

through B2B marketing is

Machinery manufacturer Makino builds

relationship with end user customer by

hosting and ongoing series of Industry

specifics webinars averaging three a

month the company uses highly

specialized content such as how to get

the most of the Machine Tools how metal

cutting processes work to appeal to

different Industries and different

styles of manufacturing its database of

webinar participants had allowed the

firm to cut marketing cost and improve

its Effectiveness and efficiency some

business to business marketers are

adopting marketing practice from

business to Consumer markets to build

their brands so these practices are used

in

this markets also

Xerox run a fully integrated

communication campaign to cleverly

reinforce the fact that 50 percent of

its Revenue comes from Business Services

not copiers

sometimes a more Personal Touch can make

all the difference

customers that are considering dropping

six or seven figures on one transaction

for Big Ticket goods and services want

all the information they can get

especially from The Trusted independent

source

now let us look at managing of business

to business relationships business

suppliers and customers are exploring

different ways to manage their

relationships

loyalties driven part by the Supply

Chain management supplier involvement

and purchasing alliances

business to business marketers are using

more focused approaches to attract and

retain customers homing in on their

targets and developing one-to-one

marketing approaches now let us try to

understand the buyer supplier

relationships much research has

advocated greater vertical coordination

between buying partners and sellers so

that they can transcend merely

transacting and instead create more

value for their parties a number of

forces influence the development of

relationship between business partners

and those four relevant forces are

availability of Alternatives importance

of Supply complex of supply and supply

Market dynamism based on these forces by

supplier relationships can range from

basic buying and selling that involves

simple routine exchanges with moderate

levels of cooperation and information

Exchange

to a collaborative relationship in which

trust and commitment lead to a true

partnership how to manage corporate

trust credibility and reputation

building trust is one prerequisite to

enjoying healthy long-term relationship

corporate trust is the firm's

willingness to rely on business partners

it depends on a number of interpersonal

and Inter organizational factors such as

firms perceived competence Integrity

honesty and benevolence

personal interaction with employees of

the firm

opinions about the company as a whole

and perception of trust will evolve with

experience

a firm is more likely to be seen as

trustworthy when it provides full honest

information

when employees incentives are aligned

with the customer needs

and when it's partnered with customers

to create market value and when it

offers valid comparisons with

competitive products so in these

conditions the firm is likely to be seen

as trustworthy corporate credibility is

the extent to which customers believe a

firm can design and deliver product and

services that satisfy their needs and

wants

extend to which the customer believe

it reflects the surprise reputation in

the marketplace and is the foundation of

a strong relationship

corporate credibility depends on three

factors

the first is Corporate expertise

reflects the extent to which a company

is seen as able to make and sell

products and conduct services

second is Corporate trustworthiness

reflects the extent to which a company

is seen as motivated to be honest

dependable and sensitive to customers

need

cooperate likeability reflects the

extent to which a company is seen as

likable attractive prestigious and

dynamic establishing a customer supplier

relationships creates tension between

safeguarding that is ensuring

predictable solution and adopting

allowing for reflexibility of

unanticipated events

vertical coordination can facilitate

strong customer seller ties but may also

increase the risk to the customers and

Supply the specific Investments so what

are those specific investment are those

expenditures tailored to a particular

company and value chain partners that is

investment in company specific training

equipment and operating procedure or

systems specific Investments however

also entails considerable risk to both

the customers and the suppliers

transaction Theory from economics

maintains that because these Investments

are partially sunk

they lock from

into a particular relationship

sensitive cost and process information

may need to be exchanged a buyer may be

vulnerable to hold up because of

switching cost a supplier may be more

vulnerable because it has dedicated

assets and or technology or knowledge at

stake When Buyers

cannot easily monitor supplier

performance

the supplier might select or cheat and

not deliver on the expected value

opportunism is some form of cheating

or under Supply relative to an implicit

or explicit contract opportunism is a

concern because firms must devote

resources to control and monitoring that

they could otherwise allocate to more

productive purposes contracts may be

inadequate to govern supplier

relationships

so that is not the only thing

when supplier upon opportunism becomes

difficult to detect

when firms make a specific investment in

assets they cannot use elsewhere and

when contingencies are harder to

anticipate customers and suppliers are

more likely to form a joint venture

which implies a greater level of

commitment to the collaborative

relationship

then signing a simple contract

so now we are talking of a joint venture

so when the suppliers degree of asset

specificity is high and monitoring the

supplies behavior is difficult the

presence of a significant future time

Horizon

and or a strong solidarity Norms

typically causes customers and suppliers

to strive for joint benefit these

specific Investments shift from

expropriation that is increased

opportunism on the receiver's part to

bonding reduced opportunity so

we

so we are talking about this continue

now how to manage institutional markets

much of what we have discussed and also

applies to the buying practices of

institutions

of institutional and government

organizations however there are certain

specific features of institutional

markets the institutional Market

consists of

schools hospitals nursing homes prisons

and other institutions

that must provide goods and services to

people in their care many of these

organizations are categorized by low

budget and captive clients so these are

two important characteristics of them

low budget and second is captive clients

in most countries government

organizations

are major buyers of goods and services

they typically require suppliers to

submit their bids and often award the

contract to the lowest bidder

so now you see that

The Firm offering the lowest price

will get the contract sometime making

allowances for suppliers known for

superior quality or for completing

contracts on time

so there can be some deviation

for for example superior quality

and

completion on time

oh

but generally we go by this lowest

bidder governments may also buy on a

negotiated contract basis primarily for

complex projects with major r d cost and

risks and projects for which there is

little competition a major complaint of

multinational operating in Europe is

that each country show favoritism

towards its National despite Superior

offers from foreign firms

so this is the favoritism

or what they call is that

so they give refers to they these

companies these countries they give

preference to to the countries these

countries give preference to the

companies that come from

their countries although such practices

are fairly entrenched the European Union

attempting to remove this bias

because the spending decision in

institutional markets are subject to

public review government organizations

require considerable paperwork from

suppliers who often complain about

bureaucracy regulation decision making

delays and frequent shifts in

procurement staff government decision

makers often think vendor have not done

their homework

different types of agencies defense

civilian intelligence

and have different needs priorities

purchasing Styles and time frames

in addition vendors do not pay enough

attention to cost justification a major

activity for government procurement

professionals companies hoping to be

government contractors need to help

government agencies see the bottom line

impact of the product so it is not only

about the price

but the overall impact that their

products all solutions are going to have

demonstrating useful experience and

successful past performance

through case studies especially with

other government organization can be

influential so they can they can tell

governments that they have done this

this kind of job earlier also for other

governments so just as companies provide

government agencies with guidelines

about how best to purchase and use their

products

government provide would be supplies

with detailed guidelines describing how

to sell to the government

failure to follow the guidelines or to

fulfill or to fill out forms and

contracts correctly can create a legal

nightmare fortunately for businesses of

all sizes

federal government has been trying to

simplify the Contracting procedures and

making bidding more attractive

so governments are also trying to reduce

all these kind of Hazels reforms places

more emphasis on buying off the shelf

item instead of items built to the

government specs

communicating with vendors

online to eliminate the message

paperwork and giving vendors who lose a

bid are debriefing from the appropriate

government agencies to increase their

chance of winning the next time around

more purchasing is being done online

via web-based forms digital signatures

and electronic procurement cards

several federal agencies that act as

purchasing agents for the rest of the

government have launched the web-based

catalogs that allow authorized defense

and civilian agencies to buy everything

from Medical

and office supplies to clothing online

the general service Administration for

example not only sells stocked

merchandise through its website but also

creates direct links between buyers and

contract sellers

for example we have government E

Marketplace

in spite of these reforms

for a number of reasons many companies

that sells to the government have not

used

a marketing orientation

some though have pursued government

businesses by establishing several

separate government marketing

departments for example companies such

as Gateway Rockwell codec and Goodyear

anticipate government needs and projects

participate in the product specification

phase gather competitive intelligence

prepare bits carefully and produce

strong Communications to describe and

enhance their company's reputation

so in order to conclude this module in

this module we have explained

how to develop effective business

marketing programs by defining

transitioning from product to Solutions

one enhancing Services building business

to business Brands overcoming price

pressures and managing Communications

we further understood how to manage B2B

Relationships by understanding different

aspects of this buyer supplier

relationship

and then we discussed a special case of

institutional and government markets and

these are the three books from which the

material for this module was taken thank

you

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thank you

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