Question 4: Discuss why growth opportunities for many firms, such as IBM or GE, are far greater in services than they are in products
For many B2B firms, it is often much easier to market services than it is to market to services. This is because the B2B products can be described as being more complex. Typically, the B2B product must be marketed on grounds of its specifications. The B2B marketer must be able to showcase its value by concentrating on its specifications and often requires a lot of expertise to be able to convince the buyer to purchase the products. Often, the products have to be customized to client specifications, the marketer would have to take time to understand the needs of the client, and deliver products which conform to these specifications (Bache-Holden 2011). In addition, companies like GE and IBM have established themselves as market experts in their niche fields. These fields are also faced with high competition from other businesses offering the similar products. These companies can use their position as market leaders to advance services to other firms for example in IT maintenance for IBM and electrical systems maintenance for GE.
Firms like IBM and GE usually have key accounts which make a difference to their sales. Due to the increasing competition from upcoming firms, and the restricted business units, these companies may have to make their key selling point their services which they can offer in addition to the sale of the goods. Therefore, apart from selling goods whose specifications and technicalities are required by the client, they also have to offer services which will appeal and add value to the client. These services could be the resolutions of complications, general maintenance, and technical advice. As a result, these companies have the opportunity to tailor themselves into a service-focused segment (Havaldar 2010). In this segment, the B2B marketer has to deliver high quality product ranges. Furthermore, this segment also requires excellent after sales services, fast delivery of goods, and maintenance services. Due to the competition in their product offering, and the restricted buying units, B2B firms offering products can use the services they offer as a value addition. This means that the quality of services they offer will act as a differentiating factor between one firm and another. This will definitely open up opportunities for the firm to grow by ensuring that it offers top-notch services which their clients will value and desire. By also offering services, the firms have greater opportunities to continue to develop their relationships with the clients. Personal relationships in B2B firms are important because many times the clients make purchases based on the levels of trust and loyalty that they have in the firm.
Question 5: Explain how B2B companies are using social media such as Facebook and Twitter to promote their products
Social media is mainly associated with B2C companies especially because it provides a forum for an emotional connection which is associated with consumer purchasing behavior. However, B2B firms also engage in social media to market their products. According to Bache-Holden (2010), the most favored social media channels used by B2B marketers are LinkedIn, Facebook, and Twitter. Others social sites include blogs, YouTube, Flickr, and others. Facebook is mainly used for branding companies/products and for promotion of events, product launches, and others. Twitter works best by creating a social interest in a brand by using concise promotional information. LinkedIn is best used to generate leads and to promote web traffic to company website or blogs. Blogs are forums where business related content is shared and can be used to build a community; they are excellent for getting feedback from clients and addressing their concerns.
B2B companies often seek to establish relationships and many of their clients become long term buyers. Social media becomes an ideal platform on which to build relationships. Many B2B companies make sales through educating their clients about their product specifications. Social media offers an opportunity for the marketers to interface expressly with the clients and thus make them more knowledgeable and inclined towards buying their products (Havaldar 2010). This can be achieved by generating content on the social media channels which will promote further understanding of the company’s product offerings. In addition, social media tends to give companies a more human face, thus making them more relatable to consumers (Havaldar 2010).
B2B companies also have the opportunity to generate business leads based on the social media practices they demonstrate. These firms use social media to showcase their business values by infusing them into their practices. For example, a company can demonstrate its customer-focus, by being responsive and attentive to clients. Any client concerns or complaints can also be addressed through these forums to further demonstrate the interest of the company in its clients. B2B companies can also take advantage of the fact that the B2B buyer tends to be more rational and less emotional than the B2C buyer. Purchases are made mainly through the business value which will be derived from it (Havaldar 2010). Therefore, social media can be manipulated to influence the buyer by providing the information which potential clients require.
Buyers tend to get heavily involved in researching products, reviewing competitive firms, obtaining referrals, and getting educated about products before making a decision to purchase a product. Social media can be used by these companies to assist the client in this process by offering desired information and thus positioning themselves as the company of choice. Since B2B buyers rely heavily on recommendations, social media offers an excellent opportunity for such companies to solicit for feedback on their products from their clients (Bache-Holden 2011). This will be instrumental in influencing the buying decision of a potential client. An excellent example of a B2B company using social media is Scania Group, well known for manufacturing heavy trucks, buses, marine and industrial engines. Scania Group uses Facebook, Twitter, Flickr, and YouTube as social media channels. Scania uses these media to showcase their products, and to build relationships with their clients. Social media certainly acts as a cost-efficient marketing channel for this company.
Before Emirates decided to purchase the new Airbus A350XWB, it underwent several phases. First, it evaluated the market to observe what the offerings of other companies. After the management must have critically examined itself to analyze whether they indeed had a critical need for the product and how it would serve the needs of its clientele. It would also establish how purchasing the airplane would position it amongst its competition and its buyers.
After establishing that there was need for another airline, Emirates would then have explored the options by beginning an ardent search for information. Emirates would have considered several airplane manufacturers and analyzed their product offerings and services to settle for doing business with Airbus. Emirates would then get involved in establishing the actual value which the new airplane would bring to the airplane. This would probably involve considering the seat capacity and the cost per seat to determine whether it would fit in to Emirates market. They would also consider other factors like the aircraft’s fuel consumption and other specifications to establish whether the aircraft meets its needs. Therefore, Emirates would have to confirm that the airplane satisfies all its decision-making criteria before deciding to purchase it. This would have led into intense negotiations between Emirates and Airbus which would probably involve discussions on how Airbus would customize the aircraft according to the specifications of Emirates. There would then be negotiations on price until a favorable price would be agreed upon. This would have been done considering the effects which the global recession was having on both companies and after considering whether Emirates would still derive value despite the economic crisis. After all considerations would have been made and prices agreed upon, Emirates would then have officially made a decision to buy the airplanes.
Other factors certainly played a great role in influencing Emirates to purchase more planes from Airbus. The first is that there was already an established relationship between the two organizations because they had already interacted during the purchase of the Airbus A380. Emirates had an opportunity to experience for themselves the business values of Airbus, and determine whether they would favor a long term relationship with the company. Airbus had an opportunity to exhibit their ethics by being able to compensate Emirates for the long delays which characterized the purchase of the Airbus A380. This served to build confidence in Emirates of the worthiness of Airbus as a business partner.
In conclusion, the decision to purchase the Airbus A350XWB was certainly a complex one where several factors were considered. These included market dynamics, where a need was established, and an analysis of the product specifications and fuel consumption of the airplane. The economic impact of such a purchase and the associated business value that would have been derived from such a purchase would have been established. Emirates would then have negotiated and recommended several changes in the plane so as to customize it to match its needs perfectly. This decision was also influenced by an already established relationship between Airbus and Emirates due to the purchase of the Airbus A380.
References
Bache-Holden A., 2011, Study: 93% of B2B marketers use social media marketing, Available at http://socialmediab2b.com/2011/04/93-of-b2b-marketers-use-social-media-marketing/
Havaldar K., 2010, Business marketing: texts and cases, New Delhi: Tata McGraw Hill.
