Business Market Management (B2B), 3/eChapter 1-1Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Accentuate Working Relationships & Business Networks Guiding Principles CraftingMarketStrategy Understanding Firms as Customers MarketingSensingManagingMarketOfferingsNewOfferingRealizationBusinessChannelManagementGainingNewBusiness SustainingResellerPartnerships ManagingCustomers Regard Value as the Cornerstone Focus on Business Market Processes Stress Doing Business Across Borders Understanding Value ValueCreatingValueDeliveringValue Business Market Processes

Business Market Management (B2B), 3/eChapter 1-2Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Basic Concepts  Business Market Management  Business Market Management is the process of understanding, creating, and delivering value.  Business Markets  Business Markets are firms, institutions, or governments that acquire goods and services. Focuses on functionality or performance.

Business Market Management (B2B), 3/eChapter 1-3Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Value as the Cornerstone of Business Market Management What is Value in Business Markets?  Monetary  Economic, technical, service, and social net benefit  The exchange for price paid

Business Market Management (B2B), 3/eChapter 1-4Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Fundamental Value Equation > (Value f – Price f ) > (Value a – Price a ) Offerings f Offerings a

Business Market Management (B2B), 3/eChapter 1-5Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Value estimated.  Value can only be estimated.  Value changes when:  Same functionality or performance provided while its cost changes to customer  Functionality or performance changes while cost remains the same  Customer Incentive to Purchase  Customer Incentive to Purchase is the difference between value and price.

Business Market Management (B2B), 3/eChapter 1-6Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Assessing Value create and deliver value  Supplier firms create and deliver value to targeted market segments and customer characteristics understand and capitalize variations  Business market management strives to both understand and capitalize on customer and market segment variations

Business Market Management (B2B), 3/eChapter 1-7Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Market Management, 3 rd editionChapter 1-7 Managing Business Market Processes  Business Process:  Business Process: a collection of activities that take one or more kinds of input and creates an output that is of value to the customer

Business Market Management (B2B), 3/eChapter 1-8Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Market Management, 3 rd editionChapter 1-8 Processes Defined by Allaire Management Processes  How the CEO runs the company  How management interacts with employees  How decisions get made  How communication takes place Business Processes  Focus is on reengineering efforts  Large, crosscutting collections of activities (product design, order fulfillment, customer service) Work Processes  Basic building blocks of business processes  How the work actually gets done

Business Market Management (B2B), 3/eChapter 1-9Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Market Management, 3 rd editionChapter 1-9 Shareholder Value Shareholder Value: economic returns exceed the cost of capital when the economic returns generated from realizing its business strategy exceed the cost of capital employed Value Drivers:   Sales growth rates   Operating profit margins   Income tax rate   Working capital investment   Fixed capital investment   Cost of capital   Forecast period

Business Market Management (B2B), 3/eChapter 1-10Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Market Management, 3 rd editionChapter 1-10 Shareholder Value (Contd) Translating customer valueshareholder value customer value into shareholder value critically depends on business’s ability to claim an equitable return on the value it delivers to customers.

Business Market Management (B2B), 3/eChapter 1-11Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Market Management, 3 rd editionChapter 1-11 Core Business Processes Product Development Management (PDM)  Understanding customer requirements and preferences  Anticipating how they will change  Constructing solutions that customers are willing to pay for Supply Chain Management (SCM)  Incorporates acquisition of all physical and informational inputs  Efficiently and effectively transforms processes into customer solutions Customer Relationship Management (CRM) Addresses all aspects of Identifying customersIdentifying customers Creating customer knowledgeCreating customer knowledge Building customer relationshipsBuilding customer relationships Shaping customer perceptions about the organization and its productsShaping customer perceptions about the organization and its products

Business Market Management (B2B), 3/eChapter 1-12Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Market Management, 3 rd editionChapter 1-12 Contributions to Marketing  Making core business processes more market-driven can result in:  Accelerated and enhanced cash flow  Reduced time to market  Earlier adoption from targeted customers

Business Market Management (B2B), 3/eChapter 1-13Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Market Management, 3 rd editionChapter 1-13 Market-Driven Processes Business Processes Market-Driven Business Processes PDMPDM Design a technically superior product Create solution that enables customer to experience maximum value and benefit SCMSCM Best inputs at cheapest price Design, manage, and integrate firm’s supply chain with suppliers and customers CRMCRM Customer relationship is a means to sell, deliver, and service a product Customer relationship is an opportunity to learn about customers’ needs and wants and how best to create, satisfy, and sustain them

Business Market Management (B2B), 3/eChapter 1-14Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Why Business Marketing Management? within  Marketing work processes should take place within business market processes cutacross functionalareas  Business market processes cut across functional areas seamless cooperation  Depends upon seamless cross-functional cooperation

Business Market Management (B2B), 3/eChapter 1-15Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Business Market Management: Understanding Creating and Delivering Value, 3/e Business Marketing Understanding that advances in marketing work processes & marketing relationships are needed to realize & profit from understanding of value. Marketing “The true meaning of Marketing [is] knowing value for the what is value for the customer customer.” -- Peter Drucker (1980)