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 Change doesn’t happen overnight
 Companies need to adopt different strategies with evolving time
 There isn’t any one factor that is causing the change
 There are multiple factors that are changing at the same time
 Marketers need to spend time on studying their consumers if they
want to produce high quality/value product
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 Marketers need to understand and study
different segments in which they have
divided the customers
 It helps understand why and how
customers in that segment view value
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Non-Profit and
Not-for-Profit
Organizations
Commercial
Enterprises
Government
Units
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Industrial Distributers/wholesalers
II. Value Added Resellers
III. Original Equipment Manufacturers
(OEM)
IV. Users or End Users
I.
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 Provide 4 types of utility:
o Form, Time, Place, Possession (____ Utility)
 Assortment of Products from many
manufacturers to closely match segment
needs (major added value of middlemen)
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These intermediaries take
ownership of good from
manufacturers and provide their
customers timely access to
these goods
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
ICI Pakistan
- Products: Industrial chemicals
- Customers: Various industries, including textiles, automotive, and
construction

Shell Pakistan
- Products: Industrial lubricants and fuel
- Customers: Industrial plants, power generation companies, and
construction companies
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 It has broadened the traditional intermediary concept
 More than just a distributor
 Provide an offering with unique enhancements to
manufacturers’ products

E.g. VAR provides systems to its customers (computer software and
hardware integration, communications systems) tailored to a
particular customer’s needs
 VAR’s Integration of offerings from many sources
creates a value network at the user level
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 Purchase goods and incorporate those
goods into their products
 Usually the largest-volume users of
goods and services (oligopolistic market)
Ex: Intel is an OEM to many computer
manufacturers. Pakistan Steel Mill is an
OEM to construction companies
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 Manufacturers that purchases goods or
services for consumption, or incorporation
into its own products
 Identity of the purchased product becomes
lost
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 Goodyear (OEM) when providing tires to General Motors.
 When Goodyear purchases steel for fabrication of steel belts
for tires, Goodyear is the steel manufacturer’s end user
 Goodyear has specified the properties of and type of steel as
part of its tire design process.
 The steel supplier views Goodyear as its end user because the
steel, produced according to Goodyear’s specification becomes
an integral part of the tires and loses its separate identity
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 Pakistan State Oil
Product/service: oil refining equipment, pipelines and
storage facilities
Suppliers: companies like Saudi Aramco, exxonmobil
WAPDA
Product/service: power generation equipment,
transmission lines
Supplier: GE, siemens, Chinese companies
o
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 Consumer grouping consists of:
o
o
o
o
o
Hospitals
Churches
Colleges
Nursing Homes
Public Scrutiny (buying habits maybe similar
to government)
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Raw Material
Producers
Component
Parts and
Manufactured
Materials
Producers
Accessory
Equipment
Suppliers
Capital Goods
Manufacturers
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 Compete in price sensitive markets
 Seek Value Added positions (supplier of sugar to large
bakery  texture or granule size maybe distinctive advantage)
 Product loses identity once incorporated into
customer’s product
 Dominated by a few very large producers (steel, plastic,
glass)
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Product loses identity once incorporated into customer’s product
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Component Parts and Manufactured
Materials Producers
 Parts retain their same form when
incorporated
 Retain identity when incorporated into
consumer’s product
 Differentiated by value added
EX: Seagate Disc Drives in Hewlett Packard
Computers, touchpad for notebook
computers
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 Component Parts Example
Pak Suzuki Motor Company purchases
component parts like engines, transmissions,
and brake systems from suppliers like Toyota
Tsusho, Denso, and Bosch.
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 Manufacturer Material Producers
Pakistan Steel Mills produces steel products
like bars, rods, and sheets, which are used by
manufacturers like construction companies,
and appliance manufacturers.
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Capital Goods Manufacturer
 Consists of large purchases with high risk
to customer
 Many parts of customer organization
involved in decision
 Customers expect installation, equipment,
accessories, employee training
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 Keyboard manufacturers for computers
must conform to standards for data input
and connection to the computer.
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Accessory Equipment Suppliers
 Equipment that works with another
offering
 Produced by an independent supplier
 Add value by complying with
industry standards for primary
offering
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 Hand tools, generators, batteries, cables
etc
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 Communities of interested parties who are not
direct participants in a market as customers,
channel members, suppliers or competitors.
 Publics have interests:
› economic or societal effects of the activity in the
market
› they provide financing to direct participants
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1.
Financial Publics (banks, investors)
2.
Independent Press (media)
3.
Public Interest Groups (attract financial
publics, impact on investors)
4.
Internal Publics (employees)
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
Environmental Protection Agencies
- Pakistan Environmental Protection Agency (EPA)
- Sindh Environmental Protection Agency (SEPA)
- Punjab Environmental Protection Agency (PEPA)
These agencies promote environmentally friendly practices
and regulations in industries such as textiles, cement
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Influence
Value
Creation
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 Vital statistics that describe a population
 Characteristics of population in the geographic region
in which the company is doing business
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 Includes:
› Distribution of ages
› Income
› Wealth
› Mobility
› Education
› Family composition
› Religion
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
Macro economy of a region or jurisdiction is the sum of total of
all economic activity in the area

Includes:
› How fast the economy is growing or declining in size
› The level of employment
› Rate of unemployment
› Interest rates
› Exchange rates of currency between different economies

Economy  end customers personal income (influences derived
demand in B2B), interest rates, company profits
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
Culture of the society impacts why, how, what people buy

Culture  all themes and symbols that reflect value and norms
in society

Multiple cultures and subcultures exist

Norms affecting  customers, competitors, partners and
employees
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
Much of the effect of natural environment comes from raw
materials, water and energy resources (required by every
company)

Availability and quality of raw materials (constraint)

Over the decade, environmental protection and conservation of
natural resources (major issue)

E.g. McDonalds switched from plastic foam (unfriendly)
packaging to wax coated paper packaging.
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
Advanced technology is developed and housed in companies,
universities, research institutions, government agencies,
laboratories

Blessing for B2B: can help open new markets, create new ways
to satisfy customer needs

Curse for B2B: if a firm has not kept pace with technology and
finds itself with an obsolete product line

Better customer services, access to more information

Not anticipating technological change can impact business
badly
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 Various Types of competitive markets:
o Pure Competition
o Monopolistic Competition
o Oligopolistic Competition (80/20 rule)
o Pure Monopoly
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o The idea of extended value chain (VC) (exhibit 2-
2) has more than a coincidental similarity to the
concept of a supply chain (SC)
o SC (flow of goods from producers to end
consumers)
o VC is similar but enhance added value from raw
materials to final customers
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o Value network refers to a web of relationships
between a company, its customers, suppliers,
partners, and other stakeholders that create
value for all parties involved.
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
A value network is a complex system of relationships that facilitate the
exchange of goods, services, information, and resources. It
encompasses various actors, including:
1. Customers: Businesses that purchase goods or services from the
company.
2. Suppliers: Businesses that provide goods or services to the company.
3. Partners: Businesses that collaborate with the company to achieve
common goals.
4. Distributors: Intermediaries that help the company reach its customers.
5. Service providers: Businesses that provide supporting services, such as
logistics or financing.
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 In a value network, each actor contributes to the
creation of value for the others. The company at the
center of the network creates value for its customers
by providing goods or services that meet their needs.
The customers, in turn, create value for the company
by providing revenue and feedback.
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
The value network concept is important in B2B
marketing because it recognizes that businesses do
not operate in isolation.
 Instead, they are part of a complex web of
relationships that create value for all parties involved.
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1. Interconnectedness: Actors in the network are connected and
interdependent.
2. Value creation: Each actor contributes to the creation of value for the others.
3. Collaboration: Actors work together to achieve common goals.
4. Mutual benefit: All actors in the network benefit from their participation.
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1. Increased innovation: Collaboration and
knowledge-sharing lead to new ideas and solutions.
2. Improved efficiency: Streamlined processes and
reduced transaction costs.
3. Enhanced customer satisfaction: Tailored solutions
and personalized service.
4. Competitive advantage: Unique value proposition
and strong relationships.
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Exhibit 2-3: The Multidimensional
Value Network
Value
Activities
Value
Enabling
Value
Creating
Total
Offering
Efforts of collaborators at
different levels in the Value
Network combine to create the
total offering for the customer.
See Chapter 1, Exhibit 4 for
greater detail.
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Supply Chain Management as a Form Of Value
Network Management
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Supply Chain Management as a Form Of Value
Network Management
Sets strict terms for
inclusion, enforces strict
adherence to quality and
timeliness requirements,
enforces extensive
sharing of information
among supply chain
members
Very large customers for
the supply chain
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Exhibit 2-5: The Product Life Cycle (PLC)
Maturity
Sales
Revenue/
period
Growth
Decline
Introduction
Time
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• Focuses on kinds of customers and how they come to adopt new technology
• Rogers – divided adopters of new innovation into groupings he called
innovators, early adopters, early majority, late majority and laggards
• Moore – called the groupings technophiles, visionaries, pragmatists,
conservatives, skeptics
• He did not just change the name but explained two principal observations
about how technology markets evolve
1. Chasm: a break in the sales growth curve for a new technology
2. Tornado - Chaos that occurs in the period of rapid growth (eventually
produces emergence of dominant supplier)
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Exhibit 2-6: The Technology Adoption Life
Cycle (TALC)
Pragmatists
Sales from New
Adopters/ period
Conservatives
Visionaries
Laggards
Technophiles
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Time
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 (13) Technology Adoption Lifecycle:
Cross the Chasm | Strategic
Management | From A Business
Professor - YouTube
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TALC and PLC
Exhibit 2-7: A Hypothetical TALC and PLC for Wireless LANs
PLC -Total
Sales
TALC - Sales from New
Adopters/ period
Time
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