1 BtoB Marketing Designing a Marketing & Commercial Policy 1

Designing a Commercial & Marketing Policy Sales, Margin & Profit Pareto Law and ABC The Marketing Process The Marketing Mix 2

Sales, Margin & Profit 3

Commercial Margin Rate = Commercial Margin Retail Selling Price Commercial Margin and Rate 4

RSP x nb units = Net Sales Gross Margin = Commercial Margin Commercial Margin and Rate 5

Commercial Margin is the Fuel Operations : Logistics, Promotion, Storage etc Personnel : Headquarters and Sales Force 6

7 Margin in Telecom EBITA : Earnings before – Interest –Taxes –Amortization EBITDA : Earnings before – Interest –Taxes –Depreciation –Amortization 7

Reading « In Paris, Airbus Revs Up a New Engine” –The Wall Street Journal as of June –By Matthew Curtin 8

The Pareto Law 9

20% 80% 100% 20% of Customers Account for 80% of Sales Customers Sales 10

Vilfredo PARETO

20% of Customers account for 80% of Sales 12

Make an ABC analysis Nb of Customers 100% 95% 80% Sales 20% 50% 100% 20/80 30/1550/5 13

Training Hercules Case 14

Position vs Customer High Profitability forCompany Weak Market Share at Customer Weak Dominant Niche Marginal Mismanaged 15

The Marketing Process 16

The Sequential Process in Market Needs Market Product Customer & Wants Means Product Market Customer of Production Starting Point Focus Means Target

The Customer Benefit Cost Product Service Features Price Customer Benefits + Margin = 18

Defining the Marketing Mix Product Price Place Promotion 19

The 4P’s : the controllable Factors Product Price Place Promotion Competitors Share Marginal Share Own Share Total Available Market The Mix Decisions Source : Jerome Mc Carthy 20

The 3 C’s : the uncontrollable Factors Source : R Wensley COSTS COMPETITION CUSTOMERS COMPANY 21

4P’s + 3P’s = 7P’s Product Price Place Promotion Product Price Place Promotion Physical Evidence Process People Physical Evidence Process People To Market 22

23 The 3 additional P’s : The extended Mix Physical Evidence : the context in which products and services are purchased and consumed. Process : all mechanisms and procedures by which products and services are consumed People : all staff and consumers concerned by the delivery, consumption or use of product or service Source : Bernard Booms & Mary Jo Bitner

The 7 P’s Product Quality Style Features Options Sizes Services Price Price list Discount Rebates Price allowances Place Channels Coverage Inventory Logistics Promotion Advertising Sales Promotion Publicity Personal Selling Product Quality Style Features Options Sizes Services Price Price list Discount Rebates Price allowances Place Channels Coverage Inventory Logistics Promotion Advertising Sales Promotion Publicity Personal Selling Physical Evidence Furnishings Colour Noise level Temperature Process Policies Procedures Mechanization Employee discretion People Training Incentives Commitment Attitudes Physical Evidence Furnishings Colour Noise level Temperature Process Policies Procedures Mechanization Employee discretion People Training Incentives Commitment Attitudes To Market Source : Boom & Bitner 24

Defining The Marketing Mix Product 25

What’s in a Product ? Source : Theodore LEVITT 26

3 Dimensions in a Product Source : Theodore LEVITT Benefit Brand Features Pack Design Delivery Credit Service Installation 27

Defning the Marketing Mix Price 28

Industrial Customers Market Cost Competition Demand What are the objectives ? What’s at stake ? Competition Price & Difference decision = Selling Price COGS + Margin = Selling Price Psychological Price - ( COGS) = Margin Internal analysis to external analysis Setting up Price Point 29

Defining Price Point Price Nb of Customers Optimum Price Highest Potential 30

Defining Price Point Price Performance/Price Perceived Too Low Optimum Too High 31

Defining the Marketing Mix Place 32

Routes to Market B TO B B TO C Industrial User Consumer 33

A long Way Down Supplier Chain Manufacturer Wholesaler Sub Wholesale ENDCUSTOMERENDCUSTOMER Retailer Wholesaler Dealer 34

Pull Push Producer Consumer Retailer Wholesaler Producer Wholesaler Retailer Consumer Push or Pull Strategy ? 35

Defining the Marketing Mix Promotion 36

Promotion & Advertising 37

Advertising towards … 38

Managing Reach and Repeat Reach Repeat Intensive Campaign Extensive Campaign 39

80% Fostering Plan Media Efficiency Nb of Messages Nb of Customers N 40

How to Invest best Ad Intensity nb & Frequency Impact on target Visibility Threshold Over Exposure Threshold 41

Market as a Battlefield : Company wins 2: Competitor wins 3 : Area of overlap = Battlefield BtoB BtoC Product Service 42

Conclusions Sales, Margin and Profit The 20/80 rule The 4P’s The 3 additional P’s 43