Engagement Exercises CHAPTER 1 A BUSINESS MARKETING PERSPECTIVE Contents 1.1 Why B2B is different ................................................................................................................................................................................................ 3 1.1 A Why B2B is Different: Conceptual Exercise ...................................................................................................................................................... 4 1.1B Why B2B is Different: Critical Thinking Exercise ................................................................................................................................................ 6 1.1 C Why B2B is Different: INTELLECTUAL INNOVATION Exercise ........................................................................................................................... 9 1.2 How B2B is Different .............................................................................................................................................................................................. 11 1.2 How B2B is Different: CRITICAL THINKING Exercise .......................................................................................................................................... 12 1.3 Types of B2B Customers and how they vary.......................................................................................................................................................... 15 1.3 Types of B2B customers and how they vary: INTELLECTUAL INNOVATION Exercise ........................................................................................ 16 1.4 Customer Value Proposition .................................................................................................................................................................................. 19 1.4 Customer Value Proposition: INTELLECTUAL INNOVATION Exercise ................................................................................................................ 20 1.5 Supply Chain Management in B2B ......................................................................................................................................................................... 22 1.5 Supply Chain Management in B2B: CONCEPTUAL Exercise ............................................................................................................................... 23 1.6 Types of B2B Products ........................................................................................................................................................................................... 26 1.6 Types of B2B Products: CONCEPTUAL Exercise ................................................................................................................................................. 27 1.7 B2B Marketing Strategies....................................................................................................................................................................................... 29 1.7 B2B Marketing Strategies: CRITICAL THINKING Exercise ................................................................................................................................... 30 2 1.1 Why B2B is different Upon completion of these exercises student should be able to state the reason WHY B2B marketing is different from B2C –the intended use of the product (usage purpose) and the intended consumer/buyer (target market)-with varying levels of conceptual, critical thinking or creative support. 3 1.1 A Why B2B is Different: Conceptual Exercise Students will analyze familiar B2C products and convert them into B2B equivalents, describing what distinguishes them from consumer products by indicating the intended use of the product and the intended consumer/buyer. Refer to handout 1.1 WHY_concpetual, pg 4) 1. Divide teams into groups of 4-5 2. Show slide or copy of the handout 1.1 Why_Conceptual 3. Provide the following instructions: “Using the categories provided interpret and convert the common B2C products into a B2B product by indicating both the intended consumer and the intended use of the product.” 4. Compare results and discuss. 4 PRODUCT B2C USAGE PURPOSE B2C INTENDED CONSUMER B2B USAGE PURPOSE B2B INTENDED CONSUMER 3M SAND PAPER CHAMPION SPARK PLUG CLOROX BLEACH COCA-COLA CARBONATED BEVERAGE DELL LAPTOP COMPUTER GE FLUORESCENT LIGHT FIXTURE IDAHO POTATO KRUPS ESPRESSO MACHINE RIM BLACKBERRY STORM Handout 1.1A Why_Conceptual Exercise 5 1.1B Why B2B is Different: Critical Thinking Exercise Students will analyze products and use critical thinking to determine the degree to which a product is a B2B offering or a B2C offering Please refer to the handout that is titled: 1.1B Why B2B is Different: CRITICAL THINKING Exercise found on pages 7-8. 1. Divide class into teams of 4-5. 2. Distribute handout. 3. Provide the following instructions: “Many products have both B2C and B2B consumer and usage purpose. Using the list provided place appoint in the grid between B2B and B2C that indicates if the product is predominantly a B2C product or B2B product. In the column to the right, support your analysis. Rarely, products are exclusively B2C or exclusively B2B products. Using the second section of the handout provide examples of each. Support of your conclusion in the column to the right. 4. Compare results and discuss. Note: Student answers will vary and likely create diverse discussion. 6 PRODUCT B2B B2C SUPPORTING ANALYSIS BUICK LACROSSE CHAMPION SPARK PLUG CLOROX BLEACH DELL LAPTOP COMPUTER DEWALT CORDLESS HAMMER/DRILL GE FLUORESCENT LIGHT FIXTURE IDAHO POTATO JIF PEANUT BUTTER KIWI BRANDS SHOE POLISH KRUPS EXPRESSO MACHINE RIM BLACKBERRY STORM 7 PRODUCT SOLEY B2C SUPPORTING ANALYSIS PRODUCT SOLEY B2B SUPPORTING ANALYSIS 1.1B Why B2B is Different: CRITICAL THINKING Exercise 8 1.1 C Why B2B is Different: INTELLECTUAL INNOVATION Exercise Students are asked to create and describe a new usage purpose and or a new consumer for a specified product or offering. 1. Divide teams into groups of 4-5 2. Read 1.1 C Decision Situation found on page 10. 3. Provide the following instructions: You are your team are role playing the roles of Lindsay and Derek. Based on your previous successes and your strong desire to succeed in your new role you want to create the winning product concept, usage situation and customer. Provide a summary, in an email format that describes the product concept/idea. Be thorough in your description of the intended customer, usage situation, consumption rates, incremental sales etc to try to convince upper management you have a thorough understanding of B2B marketing management. Try to be as innovative as possible noting that identifying new usage purposes is a way to achieve sales growth as long as it does not detract from the original usage purposes (ex: Baking soda as a baking product, a digestive aid, teeth cleanser, household cleanser, and leavening agent in baking.) When you complete your email, you will present it to the other teams in a brief 3 minute exchange. Only one product concept will be forwarded to upper management. 4. Check on the progress of each group, making certain that teams have varying innovations/product concepts. 5. Once all teams have read their emails, students vote on most marketable or most innovative concept. Often is it easier to narrow the vote to top two choices then revote. 6. Discussion: Ask the students why some product concepts were dismissed and why others were more attractive. Suggest students support their answers with strategic marketing decision making. 9 1.1 C DECISION SITUATION: B2B INTENDED USAGE PURPOSE/INTENDED CONSUMER REPURPOSING A PRODUCT HISTORY Lindsay and Derek are part of the original internal product development and marketing team at Smuckers. One of their key innovations and successes was the creation and launch of Smuckers “Uncrustables” a premade, individually wrapped serving of a crust-free peanut butter and jelly sandwich. Uncrustables are sold in the freezer section of the grocery store and were originally launched as a premium consumer ready to eat consumer item. Growth of the product expanded into new markets and Uncrustables are now frequently purchased by institutions such as universities, day care facilities, schools and restaurants. Due to their high level of success, Lindsay and Derek have been assigned a new challenge: CURRENT SITUATION Based on their success in the consumer market division, the Smuckers B2B division has requested that Lindsay and Derek join the industrial/commercial enterprise segment of their marketing department. They must develop an innovative new usage purpose for Smuckers fruit filling at the B2B level. They agreed to brainstorm different usage purposes and then identify the intended customer for each purpose. DECISION You have been asked to assist Derek and Lindsay in identifying key usage purposes and the intended customer in an email summary which highlights the product concept, customer and usage purposes, and supporting marketing strategy. 10 1.2 How B2B is Different Upon completion of these exercises student should be able to state HOW B2B marketing is different from B2C –Customers, Demand, Buyer Behavior, Relationships, Environmental Forces, and Marketing Strategies. 11 1.2 How B2B is Different: Critical Thinking Exercise Students will compare and contrast the variables across B2B and B2C segments by describing key differences and similarities and state genralized conclusions as to the apparent adjustments marketing managers must make when addressing B2B customers. Using activities on the web, students provide evidence of the different marketing actions that are apparent . Please refer to the handout that is titled: 1.2 How B2B is Different: CRITICAL THINKING Exercise found on pages 13,14. 1. Divide into teams of 4-5. 2. Distribute handout that is titled: 1.2 How B2B is Different: CRITICAL THINKING Exercise. 3. Provide the following instructions: “B2B buyers are very different from B2C buyers. Explore the offering: Champion Spark Plugs (or other product/service chose by professor). Using the internet, refer to the Champion Spark Plug home pages: (note one is specifically focused on the consumer and the other is focused on the industrial buyer.) http://www.federalmogul.com and http://www.championsparkplugs.com/ A) Provide supporting differences in HOW B2B buyers differ from B2C buyers. (The text provides conceptual support) B) After identifying key buying differences, identify the implementation differences on each web site to draw conclusions about B2B marketing strategy/tactical differences. Use of the site maps provides key areas of interest. 12 A) PRODUCT/SERVICE: CHAMPION SPARK PLUGS B2B ENVIRONMENTAL IMPACTS RELATIONSHIPS BUYER BEHAVIOR DEMAND B2C Economic Competitive Technological Regulatory Ecological 13 B) Marketing Strategies PRODUCT/SERVICE: CHAMPION SPARK PLUGS B2B MARKETING STRATEGIES B2C 1.2 How B2B is Different: CRITICAL THINKING Exercise 14 1.3 Types of B2B Customers and how they vary Upon completion of this exercise, students should be able to identify the types of B2B customers: commercial enterprises, government units and institutions. 15 1.3 Types of B2B customers and how they vary: INTELLECTUAL INNOVATION Exercise Students will consider a product in the marketplace and determine the manner in which each type of business market customer might use the product. Students should try to cover as many possible types of customers as possible with consideration to creative usage purposes. In order to randomly pair a type of customer with a type of product, please refer to grid titled 1.3.1 Types of Customers found on pages 17 and grid titled Types of Products found on page 18. 1. Divide groups into teams of 4-5 2. Randomly assign each group a Type of Customer by having a group member choose a number between 1-20. Assign each group the Type of Customer (1.3.1 Types_Innovation B2B Customers) based on the number selected. 3. Randomly assign each group a B2B Product by having a group member choose a number between 1-20. Assign the Product (1.3.2 Types_ Innovation B2B Products) 4. Each group will be given 5-10 minutes to discuss and write a brief description as to how the type of Business Market selected would use and or buy the product selected. *Note, some combinations may be easily applied, and other combinations will require significant creativity. IF a student group cannot make the connection and it is apparent that no connection is possible, they may “redraw”. 5. Provide the following instructions: “Your team is has been assigned as the new account manager for the product category provided and you are to call on the business market customer to present your offering. Describe a usage situation that would be appropriate for this combination.” 6. Compare results and discuss. (Allow for creative innovation) 16 1.3.1 Types of Customers 1. MANUFACTURER 2. CONSTRUCTION 3. SERVICE FIRMS 4. WHOLESALERS 5. RETAILERS 6. SCHOOLS 7. FOUNDATIONS 8. ART GALLERIES 9. CLINICS 11. LOCAL GOVERNMENTS 12. SHIPPING SERVICES 14. LIBRARIES 15. HEALTH CARE ORGANIZATIONS 17. FEDERAL GOVERNMENT DEFENSE 18. STATE GOVERNMENT 10. STATE GOVERNMENT 13. PROFESSIONAL GROUPS 16. FEDERAL GOVERNMENT COMMERCIAL 19. LOCAL GOVERNMENT COUNTIES 20. LOCAL GOVERNMENT TOWNSHIPS 17 1.3.1 Types of Products 1. SURGICAL SUPPLIES 2. FINANCIAL SERVICES 3. SPARK PLUGS 4. FORK LIFTS 5. INSURANCE 6. LAPTOP COMPUTERS 7. SECURITY SYSTEMS 8. AIRPLANES 9. GRAPES 10. STEEL DRUMS 11. CHEMICALS 12. SHIPPING 13. TRAVEL SERVICES 14. PAINT 15. LIGHT FIXTURES 16. CARBONATED BEVERAGES 17. CORN 18. SMARTPHONE 19. ADVERTISING AND MARKETING SERVICES 20. ASPHALT PAVING 18 1.4 Customer Value Proposition Upon completion of this exercise, students should be able to describe the purpose of a value proposition and how it is established. Students must consistently consider that value propositions are based on the customer, the competitor and the company. The students will also communicate and apply the concepts of points of difference and points of parity. 19 1.4 Customer Value Proposition: INTELLECTUAL INNOVATION Exercise Students will observe customer, company and competitor marketing materials and arrive at the value proposition for a company. Please refer to the handout titled: 1.4 Customer Value Proposition INNOVATION Exercise found on page 21. 1. Divide teams into groups. 2. Provide the following instructions. “You are asked to describe the current competitive, customer and supplier situation and arrive at a strategic Customer Value Proposition based on your exploration. You have been asked to provide a CVP to United Airlines for an In-flight Entertainment (IFE) System. Complete the series of question found on the handout to assist with your positioning and Value Proposition. Each group represents a competing company: Group One- Panasonic Avionics Corporation Group Two- Thales Group Group Three- Rockwell Collins Group Four – LiveTV Group Five – Honeywell” *Note: For additional research/rigor, suggest students explore databases such as Hoover’s or Datamonitor. 3. Distribute the handout . 4. Compare results and discuss clear points of difference and points of parity. 20 Establishing a Customer Value Proposition for In-Flight Entertainment (IFE) System Identify the three key elements necessary to assess in order to create a customer value proposition: Company, Competition, and Customer Using these criteria, and through the use of internet research, complete the following 1) Who are your competitors? What are their “customer value propositions”? 2) Determine your company’s product points of parity and points of difference. 3) Provide a customer value proposition for your company. 1.4 Customer Value Proposition INNOVATION Exercise 21 1.5 Supply Chain Management in B2B Upon completion of this exercise, students should identify and define upstream suppliers, direct suppliers, manufacturers and buyers - both resellers and consumers. In addition students will learn the basic strategies for managing suppliers and understanding relationships in the supply chain. 22 1.5 Supply Chain Management in B2B: CONCEPTUAL Exercise Student groups/tables will be assigned a supplier/customer role which represents a level of the supply chain areas. (All members of the group/table represent an organization at one level of the supply chain: BASF/Scott/Municipal Fire Department, etc) Each group will review and discuss their respective supplier web site to gain insight into establishing their role in the supply chain. Group members will be then be redistributed to a “new group”/table so that the new table has a representative of EACH member of the supply chain. (One each from Draeger, BASF, Municipal Fire Department etc) At the end of the exercise, students will have a conceptual idea of the goals at each level. Please refer to the handout(S) titled: 1.5 Supply Chain Management in B2B Exercise found on page 1. Divide class into 7 groups. 2. Distribute a position/role in the supply chain to each group. (1.5 SCM_Conceptual pgs 25-26) 3. Provide the following instructions: Review and assess your designated role in the supply chain. Review the goals that are typical at that level of the supply chain and refer to the internet/web to identify with your product/company. 4. Allow 5-10 minutes for group to familiarize themselves with the product/offering at their level using the internet. 5. Redistribute/rearrange the groups by assigning one representative from each level of the supply chain to create a new group. (Every new group should have all 7 roles in the supply chain represented) 6. Provide the following instructions: You each represent a role in the supply chain. Create a dialogue with the members of your table to learn about each role and how you might integrate and collaborate to satisfy the goals at each organizational level, ultimately providing consumer satisfaction to the end user. 23 1.5 Supply Chain Management in B2B Exercise Group 1 Company BASF Level in Supply Chain Upstream supplier to Elastron weblink http://www.basf.com/group/corporate/en/ Group 2 Company Elastron Level in Supply Chain Upstream supplier to Scott weblink http://www.elastron.com/ Group 3 Company Scott Level in Supply Chain Manufacturer of SCBA weblink https://www.scottsafety.com/en/us/Pages/Default.aspx Group 4 Company Grainger Level in Supply Chain Distributor of Scott SCBA weblink http://www.grainger.com/Grainger/SCOTTSCBA-Respirator-Assembly-9KKU6 Group 5 Company Municipal Fire Department Level in Supply Chain Funding and Buyer of Fire Department PPE from Scott weblink http://www.cityofoxford.org/Index.asp 24 Group 6 Company Fire Fighter Level in Supply Chain Service Provider of Fire Rescue Operations (user of PPE) Group 7 Company Student Level in Supply Chain Ultimate end user/consumer weblink N/A weblink N/A 1.5 Supply Chain Management in B2B Exercise 25 1.6 Types of B2B Products Upon completion of these exercises student should be able to state the types of B2B products: Entering, Foundation and Facilitating. Students will be able to distinguish subcategories of each and sort products into appropriate category based on usage situations. 26 1.6 Types of B2B Products: CONCEPTUAL Exercise Students will establish the type of B2B product using the table provided in by stating the type of product with supporting justification for why that product is considered either entering, foundation or facilitating. Please refer to handout titled: 1.6 Type of B2B Product CONCEPTUAL Exercise found on page 28. 1. Divide teams into groups or allow students to work individually. 2. Distribute handout (1.6 Types B2B Products). 3. Provide the following instructions: “Determine the type of product for each item in the table. Support your answers by specifying usage purpose and intended customer.” 4. Compare and discuss results. 27 PRODUCT TYPE OF B2B PRODUCT B2B USAGE PURPOSE B2B INTENDED CONSUMER 3M SAND PAPER CHAMPION SPARK PLUG FLOOR BUFFER/CLEANING SYSTEM COCA-COLA CARBONATED BEVERAGE DELL LAPTOP COMPUTER GE FLUORESCENT LIGHT FIXTURE IDAHO POTATO KRUPS ESPRESSO MACHINE RIM BLACKBERRY STORM 1.6 Type of B2B Product CONCEPTUAL Exercise 28 1.7 B2B Marketing Strategies Upon completion of this exercise students will have an understanding of the marketing pattern differences in tactics and strategies as products are marketed to varying B2B/organizational customers. 29 1.7 B2B Marketing Strategies: CRITICAL THINKING Exercise Students will be presented with two product offerings and relevant marketing materials. Students will “reverse engineer” the marketing strategies and compare the two platforms to identify differences and similarities. 1. Provide examples of marketing materials. (see Appendix for examples) 2. Provide the following instructions: “Review the marketing materials provided and describe the implementation of the 4 P’s and the Customer Value Proposition. Compare the strategies for each type of good represented. What broad conclusions might be made regarding the marketing of Entry, Foundation or Facilitating Goods?” 3. Share and discuss. 30 Familiarize yourself with the Automotive Industry by briefly reviewing Automotive News http://www.autonews.com/ Review the web content available on Firestone’s Industrial Parts web site and 3M Automotive/Dealer. http://www.firestoneip.com/index.aspx?region=north_america http://solutions.3m.com/wps/portal/3M/en_US/ScotchgardAutoProtection/Home/AutoDealerships/Home/ Complete the table Firestone 3M CVP Product Price Place Promotion 31 1) What conclusions could you make regarding types of strategic actions across the different product type? Support. 2) What changes or improvements might you recommend? Support. 1.7 B2B Marketing Strategies CRITICAL THINKING Exercise Handout 32