Introduction
The case dwells upon the situation, in which a new Major Accounts Management, Zain, who recently joined the organization Zoro Stationary, found himself, ones trying to adjust to the new environment. The reality demonstrates that the previous experience of this professional, which encompasses over ten years in one of the major regional clothing and household retailers allowed good insight into the purchasing and customer behavior. The challenges, associated with the change of the industry, corporate culture and personal diversity, however, built on a number of difficulties in adapting his skills to the new role.
The learning process within the new organization involves a short-term induction course and product range introduction and further training, received from a sales team with regards to the major accounts. It is evident, that the company works with a large range of products, such as shredders and photocopiers to smaller items, like paper clips. At the same time, over 70% of the organizational business is concentrated in hands of the major customer accounts, which are now under the Zain´s care.
An insight into the case and the first four weeks of Zain at his position allow arguing that the training received from the company does not reflect the depth of the business and neither does it prepare the Major Account Manager for this new role, based on the current situation and the specificity of relations, developed with each of the major accounts.
A: Organizational Buying Theories
There is a great variety of business theories of buying behavior, which influences organizational strategies with regards to pursuing their clients in Business-to-Business (B2B) and Business-to-Consumer (B2C) sectors. The four major theories underpinning the behaviors, which consumers can demonstrate in their purchasing decisions, are the generic buyer, the Cultural, the Environmental and the Internal theories (Penn, 2014). These theories outline the customer-oriented stratgies adopted by companies today (Hoyer, MacLnnis, Pieters, 2013, 15-17). The Generic Buyer Theory outlines the basic decision-making process, where a buyer recognizes the need to purchase a product and will initiate the research for this specific item. In this situation, the company or an individual will investigate the available options and pricing and choose the product based on individual preferences. Another theory, looking at buying behoove, is the Cultural Theory, which demonstrates the impact of culture on the purchasing decisions and habits of the customers, based on the occupation, education, and social environments. Based on cultural aspects, customers in both, B2B and B2C sectors will differ and the selling organization should build their strategies, incorporating strong diversity management and client psychology techniques. Environmental theory, on the other hand, suggests that the same company and the same buyer can exhibit different purchasing techniques, based on the situation. This outlines the potential for a sales organization to influence the decisions of their customers based on the partnership relationships and good knowledge and of the business of the client in general. Finally, Internal Theory of buying outlines the role of personality, whether organizational culture or individual, in building on purchasing habits. These personalities outline the permanent range of factors, which influence the decisions and brand preferences for a given buyer.
Zoro Stationary works in the B2B sector and, thus, more relevant theories will involve the corporate and group purchasing decisions. Given the overview of the clients, presented in the case, it is important to outline the role of culture and Internal Theories in building relationships with the Zoro Stationary clients. The example of the car manufacturer in the client portfolio of the company, demands the strong focus on internal theory, where the major risks for the organization are associated with the decentralization of the purchasing decision-making. This decentralized approach, outlining autonomous decision-making, brings a number of challenges for Zain. First of all, the generic approach to brand and product marketing will not be applicable to the culture and personal stimulus of purchasing managers in all four departments are different and, thus, the approach should be differentiated for each of them. Standardization of the products and their presentation can result in significant losses of the sales volume, based on individual decisions within the car manufacturer.
The second company, visited by Zain, the college, demonstrates the importance of the generic buyer behavior. While the decisions are made in a buying center, there is a set of norms, which should be accounted for by the Zoro stationary management. The client is straightforward in his needs and purchasing behavior and will go after the product based on the needs of the company. At the same time, such customer will always demand certainty and quality assurance, which should come from a sales manager. Given the situation, it is possible to argue that the company placed the relationships with this client at risk, by failing to provide adequate and accurate training to Zain prior to his meeting with this important client. It is critical that customer relationships with this type of clients are based on the transparent and one-stop-shopping solution, which can be offered by a single point of contact within Zoro Stationary.
Another example is the meeting with the large crane designer, where Zain attempted to present the new product, High-Quality Toner Cartridges. The response of the client illustrates the relevance of environmental and cultural theories. This argument is based on the fact that the client gives a lot of attention to the "rituals", developed in the relationships, such as email shots with product presentation and an introduction of the new products in Zoro Stationary catalog. The lack of this approach made the customer reluctant to accept the relevance of the presentation and challenged the potential partnership relationships with the new Account Manager. At the same time, it is evident that the client demonstrates environmental, or spontaneous, purchasing decisions, which, under the accurate approach, could bring positive sales results to the organization. The risk in this particular situation is associated with the failure to recognize the purchasing manager as a gate-keeper for all the organizational purchasing decisions.
The last examples illustrate the internal stimulus of the company, driving the purchasing decision. It is evident that the purchasing manager at the motorbike manufacturer values partnership and personal bonds with the company more than actual product elements. In order to maintain strong relationships with this type of client, the company should focus on cultural aspects and the good understanding of amiable drivers behind the decisions, made by this individual as a controller, influencer, and the decision-maker. There is a high risk to lose the account based on the lack of personal sympathy and, on the contrary, gain impulse sales due to strong relationships.
With the above in mind, it is possible to evaluate the risks from another standpoint, based on the reward-measurement theory, behavioral choice, and role theories, where the clients make their choices based on the benefits, situation and expectations respectively. Zoro Stationary should eliminate the risks of losing the clients by failing to understand the these drivers in their behaviors. To better relate to the new client group Zain should adopt the offensive behavior strategy to maximize the gain. At the same time, the new manager should take into consideration the fact that buying behavior among the major clients differs a lot and he should be able to adopt the diversified and personalized approach to each of the major accounts.
B: Key Factors, Affecting Buyers
Based on the situational analysis and the insight of the buyer’s preferences and the expectations, it is possible to outline several major factors, which affect the buyers in the given situation from Zoro Stationary. The factors are majorly centered on the general buying behavior concepts, such as price, quality, and quantity. The complexity of the factors, affecting the business is determined by the diversity of the behaviors and profiles among the core customer group. That said, the above discussion, outlines the differences in buying strategies of each of the customers, visited by the new manager. These strategies build on the critical factors, influencing their decisions. Several common criteria can be determined among the major customer group: product awareness, personal and partnership relationships strategy. It is evident from the case that the car, motorbike and crane manufacturer require special attention and personalized service from the manager, outlining the cultural and social factors, affecting their buyer behavior. Another important factor, influencing the relationships of Zoro Stationary with the clients is the knowledge of the product and the existing marketing strategy. This argument is based on the analysis of the Zain’s visit to the educational institution and the crane manufacturer, where the manager faced with the challenge to demonstrate 360-degree knowledge and understanding of the product line and the approach to presenting these products to the clients. Additionally, cultural and social factors, such as communication and personal interest also play an important role in the development of the relationships. Often these factors are secondary to the actual process of decision-making but extremely relevant to the relationships with the sales manager, which outline trust and confidence in the quality of the service through customer experience.
B: Recommendations for Risk Reduction
The case illustrates that the company did not adopt a structural approach to the integration and training of the new manager into the team. The experience, which Zain brought to the organization, is relevant, but there are obvious knowledge gaps, based on the differences in the industry purchasing practices and corporate culture in the company. The visits to the clients demonstrated that Zain's predecessor developed strong personal relationships and bonds with his clients, focusing on knowledge of the products and trust, which made clients listen to his opinion and recommendation. With that in mind, one of the major focus areas in hiring a new person for the position of the Major Account Manager should be a smooth transition of the clients and extensive and coherent training with regards to the product range, marketing strategies, and sales planning. Based on the information, provided in the case, it is possible to argue that better focus on these elements could benefit both, the company and Zain. More specifically, several recommendations could be made with regards to the risk reduction for Zain. First of all, then dealing with important customers, new individuals, which are assuming well-established positions should be presented by the management in a joint meeting, demonstrating that the organization has full trust and provided explicit training with regards to the history of relationships and the needs of the buying company. Secondly, it is recommended that more detailed and specific training is provided to Zain in order to avoid the situations, when he, as the highest ranked individual in the department lacks knowledge about the product, which is being offered to the clients. Another important improvement in the integration process would be marketing training, where Zain receives specific information and data on the tools and mechanisms used with each of the key clients to introduce and promote new products and features. Finally, it would be beneficial for all the sides, if the organization and the line management specifically organized a team building involving some of the key accounts and where Zain would be normally introduced to the buying companies and responsible managers from the client´s side.
A: Organizational vs. Consumer Buying
While it is evident that both, organizations and individual consumers need to use upstream suppliers to complete their daily task, organizational buying behavior is often different from the consumer behavior for several reasons. First of all, an organization is a mechanism, which involves a number of groups, specific interests, and needs as well as buying strategies. Secondly, companies choose different governance structures, which result in the different level of responsibility delegation throughout the organization and impact the manner in which the company and its departments build relationships with upstream suppliers, such as Zoho Stationary. Another important aspect to consider, when looking at the differences in the buying behavior, is the major driver for purchasing. While consumers buy goods for personal use, whether first need or luxury product, companies in most of the situations work with raw materials or humiliating materials, which help to deliver the final goods to their own clients. With that in mind, companies purchase goods in larger amounts and have more demands to specificity and attributes of the products. The visit to the manufacturer, which Zain conducted during the first week of his assignment, demonstrates how organizations use delegation of buying decisions to different individuals to reduce the risks, associated with the failure to purchase the exact product, needed for the company. Business compromise quality and delivery standards to their clients, which means that these organizations build on dependency with suppliers of raw and non-finished materials, grounded on the quality of their products as well. This results in limitations with regards to the bargaining power and choice that buying organizations have when making purchasing decisions. Such limitation is another important differential between organizational and individual buying, as consumers choice is wider.
B: Typical DMU at Car Manufacturer
Typical Decision-Making Unit (DMU) at any organization is comprised of several key individuals or initiators. These individuals comprise a team, which participates in buying decision-making process. Car manufacturing is not different in this sense. It is possible to argue that while there is generally a single point of contact with the sales organization, who conducts buying process and negotiates the volume, price, and conditions, the decision is taken, involving such roles as decision-makers, buyers, and deciders, gate-keepers, actual users, initiators and influencers within the company. Initiators in the car manufacturer, who recognize the need to purchase stationary, needed for day-to-day operations. Gatekeepers, on the other hand, are the individuals in car manufacturing project team, who help by reevaluating the needs and give the green line to the purchasing batch. Users are generally the project team members, which actually use the products, purchased from a sales organization. These individuals are involved in a post-purchase evaluation of the product and can give valuable feedback to the buyers and deciders. Finally, influencers are those team members that can place pressure and express their power over the deciders and buyers, while making the final purchasing decision. The experience with the manufacturer, which Zain had over the first week of his work at the Zoro Stationary made him understand that the buyers, who were present at the meeting represent the above-outlined groups in a decentralized buying organization (Parkinson and Baker, 1986, pp. 21-24).
C: Different Selling Experience
The experience of selling the products to DMUs within large organization differs significantly from consumer selling. Zain faces with such challenges as the relationship building, understanding the complexity of the decision-making process, based on a diversity of team members, influencing and participating in a purchasing decision and post-purchasing evaluation of the product. One of the biggest challenges for organizational buying, which Zain has to address is learned about purchasing politics and the importance of long-term bond. While consumers loyalty is often driven by superficial elements, such as price, style, and fashion, organizational buying through DMUs is grounded on trust, bonds, price and quality benefits and other factors, different from consumer buying. Working within B2B sector will make Zain understand that the timeline of purchasing process is also different, as customers in the direct segment can make up their mind within minutes and days, companies can take months to take the purchasing decision and place an order. DMUs´ orders, however, will represent higher volume and share in Zoro Stationary revenue.
A: Initial Perception
The second week of work at Zoro Stationary brought the new experience to Zain when he felt like he failed to demonstrate robust knowledge of the products and create the good first impression with this important client. The situation illustrates the meeting between new Major Account Manager, Zain and the buyer with many years experience in stationery purchasing, who expected to receive explicit and complete information from Zain about the specific document shredder, which Zoro Stationary had in their portfolio. It is evident from the case, that the educational institution has developed the strong and long-lasting relationship with the company and the buyer grounded these relationships on trust and convenience with regards to accurate and complete information, which he could receive from his single point of contact at Zoro, Major Account Manager. With the change of the individual in this role, it is essential that the transition from one manager to the other is done in a way, which does not affect the clients and their major drivers for buying with Zoro Stationary. Given that the initial impression of Zain is tremendously important to the educational institution as it helps them to take the decision on the continuity of the partnership relationships. Failure to build trust and re-emphasise the understanding of the organizational reasons for working with Zoro can result in the loss of this important account (Moser, 2006). It is important to recognize that the first impression of the buying company about the competencies and experience of Zain will build on future relationships and determine the degree of trust that the buying manager will have in advice and recommendation of Zain during the negotiation and purchasing process.
A: New Product Introduction
There is a variety of frameworks, available to the companies to introduce new products and services to the DMUs, with which the company is working. The basis of any product introduction to the market involves the following steps: market analysis, product strategy, clear and developed marketing plan, executive plan, launch and post-sales monitoring. When it comes to the introduction of the product by a sales manager to the buying company, the responsible party should make a research to understand the core elements, such as:
The degree of knowledge about the product;
Competitive framework;
Whether this product is essential or incremental to the business;
Potential substitutes;
Previous experience of the buying company with the new product launchings.
The above will ensure that the manager is equipped with the critical tools to develop personalized approach and strategy for product introduction. In a given situation, Zain was encouraged by the line management to sell high-quality cartridges to the existing client, which allows pursuing quick introduction strategy, avoiding involvement of the digital content and the long-term introduction. Based on the findings from the above-outlined preliminary study, which Zain should have conducted, the sales strategy could have been the following. First of all, Zain should send an informative email, describing the new product, its use, benefits and the technical characteristics of the client. Secondly, he should have called the purchasing manager and outline over the phone the agenda of the meeting and his intent to introduce the product and its specific benefits for the crane manufacturer. Finally, Zain should prepare a presentation about the competitiveness of the product on the market and predict doubts and questions of purchasing manager with regards to substitutes and critical elements, which always determined the purchasing behavior of this organization (Moser, 2006).
B: The Use of Transactional Data
Corporate purchasing plans explain the strategies that companies adopt for purchasing. To explain how the use of transactional data could have benefitted the company in sales of the new toners, it is important to define the transactional data in general. In view of the sales, context is transactional data can be seen as the information gathered and recorded from previous purchasing deals, which took place between selling and buying organization (Quayle, 2006, 29-30). As it was mentioned in the previous section of this work, transactional data comprises a number of critical variables, which can make the sales process more personal and address the needs and drives of the individual and the purchasing organization as a whole (Gould, 2012, . By using the transactional data, Zoro Stationary could have created more interest in a new product and prepare the purchasing manager at the crane manufacturer for the meeting in a way that he could ask the questions and take out major doubts about the product. With that in mind, the meeting between Zain and the buyer could have yielded more results and demonstrated that the new Major Account Manager is knowledgeable about previous transactions and is able to give the same personalized and customized approach to the client as his predecessor.
A: Customer Loyalty
As it was previously discussed, organizational buying is different from B2C market in many ways. The drivers for decision-making as well as buying behavior are significantly more complex and long-term than one can imagine in traditional consumer buying experience (Baker and Parkinson, 2016, p.6-7). Organizational buying reflects the relationships between selling and buying a company, which is built on loyalty and trust, as the quality of the final product, which purchasing company delivers to their client is strongly dependent upon the quality and reliability of the products, which they purchase on the upstream of their operations. The behavior of a company in B2B environment is also determined by the industry. As such, retail, manufacturing and government procurement will have differing stratgies, based on several major elements, such as dependency, life cycle of the products and the purchasing situation itself (Baker and Parkinson, 2016, 7).Given the fact that organizational buying is characterized by higher volume, or bulk purchases, long-term fixed contracts and lower frequency of buying, the share, which B2B clients represent in the overall income of the selling organization is significant. The case outlines that Major Accounts at Zoro represent over 70% of the total income, meaning that the loss of any of the accounts will significantly damage the bottom line of the company. With that in mind, loyalty should be the central concept in relationships between seller and buyer in B2B. Additionally, long-term relationships between such parties can result in collective improvement of the products and services. This improvement can be achieved through better understanding of the client's needs, certainty about the volume of sales, which allows reinvesting in incremental innovation and quality improvement within the selling company, reduction in transaction costs due to a reduction of waste, better forecasting, and postponement practices. The above are some of the examples, which demonstrate the critical role of loyalty, but they do not limit the reasons for selling companies to focus on building the long-term relationships with the company.
A: How to Ensure Loyalty and the Long-term Relationships
Motorbike manufacturer demonstrated strong bonds with the predecessor of Zain, Jean Claud, who he worked for the past ten years. It is also evident that the buying manager was extremely satisfied with the relationships that he had built with Jean. Such attitude builds on resistance to accepting the change in management and outlines the challenges that Zain will have to go through to be able to gain trust and build the long term relationships with this customer. Given the importance of personal relationships for this individual, there are several steps that have to be taken by Zain to construct the long-term partnership. First of all, he should demonstrate respect to his predecessor and acknowledge the relationships and values built over the years of partnership. This should come with the reaffirmation of the client that the intention of Zain is to continue this partnership on the same level of quality and service. Secondly, Zain should arrange a number of informal meetings with the client, to demonstrate attention and get a more in-depth understanding of te actual factors, which are so important for the purchasing manager in the relationship with Zoro Stationary. The purpose of these meeting should be to give personal treatment and, at the same time elaborate on the transactional knowledge, which, surely has a lot to offer in terms of future customer relationships strategy with this client and understanding of potential areas of expansion and improvement of the service. That said, Zain should continue offering similar approach and “speak the same language” with the client to give continuity to the type and level of service offered by the company during this long-term partnership. By doing so, Zain will be able to establish strong relationships, build loyalty and long-term commitment from the client.
Conclusion
Purchasing strategies for organizations, as opposed to a consumer market, are different, majorly because the relationships between the suppliers and the buyers tend to be significantly more interdependent. It is critical that companies in B2B sector focus their sales, marketing and customer relationships efforts on building loyalty and special partnership links, which secure long-term purchasing volume and create the strong customer base, able to support growth and competitiveness on the market. Zoro Stationary case study illustrates the failure of the HR department to ensure smooth transition and adaptation of the new Major Account Manager in the new environment and industry. It is evident that the organization committed several mistakes, which could cost significant sales volume and can damage relationships with major accounts. While Zain is a valuable asset to the organization as his experience in B2C sector and different view on the business can bring new knowledge and ideas to the organization, it is evident that the line management should dedicate more time and efforts to train and prepare him for the position.
References
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