BUSINESS TO BUSINESS MARKET
Deloitte is an international company that offers professional services to the firms and companies around the world. It is a private company, founded in 1845 in the UK. Regarding revenue and the number of professionals, it is the second largest professional service providing company in the world, headquartered in the United States in the city of New York. The major professional services of the company include the following (Deloitte, 2015a):
Audit & Risk Advisory
Consulting
Financial Advisory
Tax
Enterprise Risk
It is currently working with around 225,500 professionals in its global network of 150 countries. The company has successfully generated the revenue of £2,827 million. The UK is its major market having the largest number of clients in the country. For its Auditing Services, India is its major market, working for more than 500 companies. Although, it is the second largest company, however, in consultancy, it is the first leading company regarding market share, where, the management consultancy is a major service (Deloitte, 2015a). The company being a global company is required to improve its marketing relationship, by understanding the factors affecting the buying behaviour of the buyer firms.
Market Segments
The company provides professional services; it means it is a business to business firm, and it deals with the business market segment. Though, its market segment is diverse because of its service portfolio and international diversity.
The company targets the clients based on different segmentations such as Demographics, services Attributes, and operating attributes. The company offers its services to the professionals in around 150 countries of the world that is its geographic location segmentation. As of, all countries have their legal specifications; therefore, the company decides its service specifications based on the differences across the countries (Deloitte, 2015a).
Other than the country specifications and geographic, the company also segment its market based on its service specifications. The following services it offers in service attributes targeting the service specified clients (Deloitte, 2015a):
Audit and risks Advisory is one of its major services that include audit, risks management and control, internal audit, reporting, and financial statement service, etc. Therefore, all the professionals that search for these services are included in the target segment of the company (Deloitte, 2015a).
The next segment is a tax that includes the services such as employer tax, business tax, and personal tax. Therefore, the tax associated professionals are also included in the market segment of the company. It targets the clients that have international tax issues, tax liabilities, assets problems, etc. (Deloitte, 2015a).
The third segment isconsulting in which the company targets the professionals that need the consultancy for the business operations, business strategies, applications of the enterprise, human resource, and capital and the integration of technology. All the professionals in the business market that need to have consultancy and advice for the business operations and other associations are included in the segment (Deloitte, 2015a).
Financial Advisory is another service that further increases the market segment. The service includes commercial disputes and bankruptcy, transaction support, services for reorganisation, forensic and real estate consultancy. All these services are provided in the countries, where the company exists (Deloitte, 2015a).
Influencing Factors to the Segments
The market segmentation and targeting are influenced by multiple environmental factors. The company decides its target market based on the various external and internal factors. Let’s have a look at the factors affecting the segmentation of Deloitte Company.
Environmental Factors
There are few of the major environmental factors that directly impacts on the business strategies such as market segmentation, targeting, and marketing. These factors are associated with the buying behaviours of the buyer firms. These factors are as follows:
Politics
The political factor is one of the major influences for the firms, mainly business to business companies. The political environment of the country directly impacts on the product and service choice for the customers (Thakur, 2011). Deloitte, as working in various countries, is being influenced by the political environment of different countries. The instability of the political conditions resists the investors to invest in the business. Therefore, Deloitte is involved in offering country-specific services, keeping the political systems in mind.
Economics
Other than the politics, the economy is another environmental factor that influences the choice of the companies for its market segmentation and targeting. The economic conditions of the country or region directly influence the purchasing behaviour of the customers. During the economic recession, the business companies try to work more with less spending and resources and its hurts the business of the B2B companies that depend on the business firms (Thakur, 2011).
Deloitte is a multinational company and exists in almost every country in the world. Therefore, the economic conditions of each company impact its choice of operational and service attributes. For suppose, the prices it charges for single service in one company might be different in other company.
Legal
The legal environment of the market can also impact the market segment as the regulatory authorities influence the business strategies and processes. For suppose, the contract regulations, the business relationship laws, and employment laws can impact the choice of the market segment of the company (Thakur, 2011). The UK is the home market of Deloitte. However, all other countries are included in the group, not as individual market segment except Switzerland.
Technology
The technological advancements and developments also impact on market segmentation. The technological developments, growth, and advancements in the market motivate the business firm to select the market as a segment of business or not. If the B2B Company is involved in enhancing its product or services regarding technology and innovation, then the business customers must also be involved in technological development (Thakur, 2011). Being a consultancy company, Deloitte has an opportunity to target small and medium-size firms to provide them technological support for operational support. Therefore, the technology is one of the influencing factors for the choice of Deloitte to select market segment.
Organisational
Other than the external and environmental factors, there are some internal and organisational factors that also influence the market segments of the business firms. Some of the major factors include the following:
Business Nature
The first and the foremost organisational factor is the business nature of the company. The business nature and personality of the firm influence its choice of the market segment. For instance, the female beauty salon cannot select the male and kids segment of the market as the business nature is to offer female beauty services. Deloitte is a professional service providing company; therefore, it cannot target the casual customer market segment.
Other than the company, the buying behaviour of the customers, mainly in B2B business relationship, is also influenced by the nature of the business. The way in which the professional customers develop their activities and business process lead them to decide their business activities such as product and service purchasing. Based on their business needs, they decide to buy the products and service from the business firms (Brennan, Canning & McDowell, 2014).
Business Strategy
The B2B companies decide to target the customers based on their business strategies. The business customers develop the relationships with the suppliers and business firms based on their operational activities and strategies. For suppose, if the company requires resigning the leading and innovative product, it requires the technical, and innovative skills and abilities and the involvements of the vendors is very essential in product development and leadership strategies of the firms (Brennan, Canning & McDowell, 2014). Therefore, in its consultancy service, Deloitte Company can target the companies that are willing to develop skilled and competent workplace having talented and managed the human resource.
Ethics
The business ethics of the buyer can also influence its buying behaviour. Selling, product, pricing, distribution, market research and personnel are ethical issues in B2B marketing. Taking pricing as an example to talk in detail, the ethical pricing, the code of conduct for contracting, the code of practicing, etc. can influence the decision of the buyer to buy the service or product from the vendors or not (Brennan, Canning & McDowell, 2014).
Purchasing Orientation
The purchase intentions and orientations also found as the influencing factors to the market segment (Grewal et al. 2015). The firms get services or products from the suppliers or vendors either to cut the cost or to improve the sales and revenue of the company. For suppose, the auditing services of Deloitte are being purchased by the companies that have problems in managing their investments, cash flows and balance sheet (Brennan, Canning & McDowell, 2014).
Centralisation
Brennan, Canning & McDowell (2014) have also discussed that the centralization of the functions of the purchasing also influence the buying behavior of the business customers. The level of centralization and decentralization directly influence the purchase behavior of the buyer (Havaldar, 2005).
Decision Making Units
Another factor that influences the buying behaviour of the customers is the decision making units. It is the factor that who and how many are involved in making the decision for purchasing the product and service. Therefore, the customer of b2b companies might be different from their target consumers. The advisors, managers, financiers and decision makers can be involved in the company’s decision to purchase the service and products from the suppliers and vendors or not (Wright, 2006).
Individual forces
There are some personal forces of the buyer that also influences the market segment of the company. These forces are as follows:
Buyer skills
The management of the company is usually the buyers for the business firms or vendors, for that, the management requires the skills such as communication and consultancy with the employees in different departments, forecasting and measuring the needs of the company, monitoring and controlling the business activities, negotiation power with the suppliers and vendors. These skills are very important for the manager to influence the behaviour of its company to buy the product and services (Brennan, Canning & McDowell, 2014).
Type of Task
The type of tasks of the buying firms also influences the purchasing and buying behaviour of the customers. Some of these major tasks are explored by different models of buying situations such as The Buy Grid Model, Webster’s and Wind’s Model and Sheth’s Integrated Model. The types of task also influence the purchase behaviour of buying firms; therefore, these tasks are important for Deloitte Company to understand.
New buy
New buy is the situation when the problem or need occurs to the buying company that never happened before. In this situation, the buying company requires extensive and excess of information about the offers of the vendors or suppliers (Flierβ, Johnston &Sichtmann, 2015). It means it is very important for the companies to develop their strong network of information so that the buyer can easily found in them. For instance, Deloitte use the strategy of online communication with their target clients through its website. It offers the information in the form of case studies of its previous role with other client so that its new buyers can easily get the information in excess (Deloitte, 2015b)
Modified or straight re-buy
Modify and straight re-buy are two different situations. In modifying re-buy situation, the buyers need a different or changed product for which they search for a new supplier. However, in straight re-buy situation, the buyers need very little information to work with the regular suppliers on a regular basis (Flierβ, Johnston &Sichtmann, 2015). There are many re-buyers of Deloitte that are its fix clients and partners that are its regular clients in the context of different services. However, for the modify buy, again the information strategy can be considered as affective to persuade the buyers that needs transformation and modification in the services.
Transaction or Relationship Oriented
The nature of the buyer also influences its buying behaviours. Regarding nature, there are mainly two types of buyers include transactional buyers and relational buyers. The transactional buyers only focus on one-time purchases and transactions and consider the prices as the major aspects while buying. In transactional orientation, one customer is different from the other but on the whole, they are not loyal customers of the company (Hutt &Speh, 2012).
Conversely, the relationship oriented buyers focus on the psychological characters of the suppliers under considerations to develop long term relationship for the buying. They are more concerned to become familiar with the supplier before going to buy their services or products. The relational customers consider the past experiences, quality of the product and service and customer service while making a purchase decision. These two relationships have some characteristics that are identified in relationship spectrum (Reis et al. 2015). Therefore, the companies have to decide their services and products to develop the better relationship with the buyers.
In business related firms, the business buyers are usually relationship oriented (Ellis, 2011). Therefore, the B2B firms are needed to focus on their strategies to develop relational buyers.
Networks
The network is another important approach for the business firms to develop a relationship with the buying firms. The buying organisations design their networks of suppliers and service providers in which few are secondary suppliers; few becomes partners, and few are regular service providers. It is important for the supplying firms to develop their strong position in the buyer’s network to influence their buying behaviour because they behave differently with different suppliers in their networks (Zimmerman& Blythe, 2013). The theory of network analysis states that the activities of the company are directly linked with the actors and resources interchangeably (Lecture 4, ppt).
The theory can be understood in the context of the network of Deloitte. Deloitte developed its network with the help of forming different companies that are interconnected with a privately owned company in UK. Each of its members offers the services according to the laws in each geographic area, region or country. The network of the company is resulted in the growth of its customers every year and reached to 225,000 in 2015 from 170,000 in 2010 (Deloitte, n.d.b). The affects of inter-firm networks are supported by the study that has found that the performance of the buyers and suppliers are affected because of the networks.
Recommendations
It is always important for the companies to develop the relationship with the customers either in B2B business or B2C business. The study has suggested many different offers to attract the buyers and develop effective buying relationship with the customers in B2B marketing.
Product
The quality of the services of Deloitte has to be enhanced and improved to develop long term relationship with its target segments. The services must ensure the fulfilment of the environmental requirements as well as the business requirement of the buying firm. For the product offering management, the company is required to develop the product life cycle. The cycle must include different stages such as development, launch, introductory, growth and maturity stage. At the decline stage, the company then decide to reshape its product offers (Ford et al. 2011).
In connection with the product, the company has to focus on the branding of its products to ensure the maximum benefits to the customers. With the help of branding and awareness, the company can increase the customer satisfaction and improve the brand perception among them that is directly resulted in the brand loyalty. Many theories and studies have suggested that the product of the company must be aligned with the objectives, strategies and positioning of the company. It means that with the branding, the company must also ensure that the product is designed with the expectations of the customers based on the positioning of the company. Therefore, Deloitte can improve its service strategies.
Price
The prices are very important for the buying firms because of various factors identified above such as economic conditions, purchase intentions, relationships and type of the tasks (Iyer et al. 2015). Other than these factors, some other forces also influence the prices such as cost, customers (Deloitte, n.d.a) and competitors. The pricing strategy is being affected by various internal and external factors. Other than the competitors and customers, the legal issues and market demand also impact the pricing strategy. The internal factors include strategy, objectives and cost (Lecture 8, ppt). The behaviour also impacts on the prices and therefore, the company before deciding the prices, must assess these factors in its target segments (Karmarkar, Shiv & Knutson, 2015). For instance, Deloitte offers low price in the market because of the high competition from three major competitors include PWC, KPMG and EY. The price strategy is followed using the model of cutting value added services (Consultancy UK, n.d.). It means that competition is the major focus of Deloitte while deciding for price strategy. Therefore, it can improve its pricing based on other external and internal factors.
Marketing Communications
Being a business to business company, Deloitte is suggested differently for its Marketing communication. The marketing techniques for B2B are needed to be different from the marketing communication for the customer oriented business (Ford, 2002). Therefore, Deloitte rather than using traditional customer related tools for marketing communication is needed to go differently. Deloitte has to develop direct selling promotional techniques to target the professional companies and firms.
Simple use of mass media is not significant in business to business marketing. The public relations, online advertising, advertising through publications such as brochures, pamphlets and magazines are important for the marketing communication of B2b Company to market its product or service to the target segments (Bly, 2013).
Routes to Market
Other than promotional techniques, the company also needed to develop the appropriate channel for the distribution of the service. The company has to distribute the product through both direct and indirect channel. In direct channel, personal selling is the best approach for Deloitte to target its market segments. Based on personal selling technique, it will offer telephone sales, online sales, salesperson and frontline staff (Hutt &Speh, 2012).
Relationships
Being a service providing company, Deloitte has to focus on developing a relational oriented relationship rather than simple transactions. Once, the company will improve its service quality and use the marketing strategies according to the nature of the buying firms; the customers will automatically be changed into partners and long term collaborations (Reis et al. 2015). The services like audit, risk management, financial advisory, all are long term relational in nature such as auditing service cannot transact for one time. The company, selling to the buying firms, needs to understand the four activities include explore, evaluate, engage and experience (Cespedes&Bova, 2015).
Networks
Based on the relationship strategy, Deloitte has to position itself in the position of partner suppliers that are involved in long term process and operations of the buying firms. The strong position in the buyer’s network will help the company to improve the buying behaviour of the customers (Hutt &Speh, 2012).
Therefore, the company has to focus on the long term and collaborative relationship with its buying firms; such as the company can develop the partnership with small and medium size firms to provide technical, financial and auditing support.
References
Bly, B. (2013). Business to Business Marketing Handbook. Centre of Technical Communication.
Brennan R., Canning L. and McDowell R. (2014). Business to Business Marketing, Third Edition. Sage.
Cespedes, F. V., &Bova. T. (2015). What Salesperson Needs to know about the new B2B Landscape. Harvard Business Review, Available from https://hbr.org/2015/08/what-salespeople-need-to-know-about-the-new-b2b-landscape [Accessed 7 April 2016]
Consultancy. UK. (n.d.). Consultancy Fees & Rates. Available from http://www.consultancy.uk/consulting-industry/fees-rates [Accessed 7 April 2016]
Deloitte. (2015a). Financial Statement 2015. Available from http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/about-deloitte/deloitte-uk-financial-statements-2015-v2.pdf [Accessed 7 April 2016]
Deloitte. (2015b). Case Studies. Available from http://www.deloitte.co.uk/impact/case-studies/ . [Accessed 14 April 2016]
Deloitte. (n.d.a). Upfront doing the right thing. Available from http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/corporate-finance/deloitte-uk-ma-upfront-the-right-deal.pdf[Accessed 7 April 2016]
Deloitte. (n.d.b). About Deloitte. Available from http://www2.deloitte.com/global/en/pages/about-deloitte/articles/about-deloitte.html [Accessed 7 April 2016]
Ellis, N. (2011). Business-to-Business Marketing Relationships,Networks & Strategies. Oxford.
Fließ, S., Johnston, W., &Sichtmann, C. (2015). Business Buying Behavior.In Fundamentals of Business-to-Business Marketing. Springer International Publishing.
Ford, D. (2002). Understanding Business Markets,Third Edition. Thomson.
Ford D., Gadde L.-E., Håkansson H. and Snehota I. (2011). Managing Business Relationships, Third Edition. Wiley.
Grewal, R., Lilien, G. L., Bharadwaj, S., Jindal, P., Kayande, U., Lusch, R. F., &Spekman, R. (2015). Business-to-business buying: challenges and opportunities. Customer needs and Solutions, Vol. 2, No. 3, pp. 193-208.
Havaldar, K. K. (2005). Industrial Marketing: Text and Cases. Tata McGraw-Hill.
Hutt M.D. and Speh T.W. (2012). Business Marketing Management: B2B, Twelfth Edition. Cengage.
Iyer, G. R., Xiao, S. H., Sharma, A., & Nicholson, M. (2015). Behavioral issues in price setting in business-to-business marketing: A framework for analysis. Industrial Marketing Management, Vol. 47, pp. 6-16.
Karmarkar, U. R., Shiv, B., & Knutson, B. (2015). Cost Conscious? The Neural and Behavioral Impact of Price Primacy on Decision Making. Journal of Marketing Research, Vol. 52, No. 4, pp. 467-481.
Reis, R., Oates, C., McGuinness, M., & Elliott, D. (2015). Developing relationships through direct marketing in a business-to-business context: The training sector in Portugal. International Journal of Engineering and Industrial Management, No. 2, pp. 47-59.
Thakur, S. (2011). Factors That Influence Organizational Buying Decisions.Bright Hub, Available from http://www.brighthub.com/office/entrepreneurs/articles/122328.aspx [Accessed 7 April 2016]
Wright, R. (2006). Consumer Behavior. Thomson Learning.
Zimmerman A. and Blythe J. (2013). Business to Business Marketing Management: A Global Perspective,Second Edition. Routledge.
