Preface
Acknowledgements
About the Authors
SECTION I: INTRODUCTION AND OVERVIEW
CHAPTER 1: BUSINESS MARKET MANAGEMENT: GUIDING PRINCIPLES
OVERVIEW
VALUE AS THE CORNERSTONE OF BUSINESS MARKET MANAGEMENT
What is Value in Business Markets?
Assessing Value in Practice
MANAGING BUSINESS MARKET PROCESSES
Shareholder Value, Business Processes, and
Marketing
Core Business Processes
Contributions of Marketing
Business Market Management and Business Marketing
Business market processes
Business marketing
DOING BUSINESS ACROSS BORDERS
Language and Culture
Cross-Border Negotiation and Dispute
Resolution
Cross-border negotiations
Cross-border dispute
resolution
Currency Exchange and Payment Risk
WORKING RELATIONSHIPS AND BUSINESS NETWORKS
Work Teams
Working Relationships
Collaborative relationship
agreements
Collaborative relationship
development
Business Networks
Business network
characteristics
Analyzing business
networks
SUMMARY
SECTION II: UNDERSTANDING VALUE
CHAPTER 2: MARKET SENSING: GENERATING AND USING KNOWLEDGE ABOUT THE
MARKET
OVERVIEW
DEFINING THE MARKET
Market Segmentation
Conventional bases of
segmentation
Progressive bases of
segmentation
Determining Market Segments of Interest
Market segment size and
growth
Sales and profit
potential.
MONITORING COMPETITION
A Framework for Competitor Analysis
Future goals
Assumptions
Current strategy
Capabilities
Improving Monitoring Performance
Competitor intelligence
systems
Seek disconfirming as well as
confirming evidence
ASSESSING VALUE
Value Assessment Methods
Internal engineering
assessment
Field value-in-use
assessment
Indirect survey questions
Focus group value
assessment
Direct survey questions
Conjoint analysis
Benchmarks
Compositional approach
Importance ratings
Customer Value Management
Translating business issues
into projects
Customer value workshop
Customer value research
Constructing a business case
for change
Value realization
GAINING CUSTOMER FEEDBACK
Customer Satisfaction Measurement
American Customer
Satisfaction Index (ACSI)
What customer satisfaction
results mean
Customer Value Analysis
Net Promoter Score
SUMMARY
CHAPTER 3: UNDERSTANDING FIRMS AS CUSTOMERS
OVERVIEW
UNDERSTANDING PURCHASING ORIENTATION
The Buying Orientation
Obtaining the best deal
Maximizing power over
suppliers
Avoiding risk
Developments in buying
The Procurement Orientation
Improving quality
Reducing total cost of
ownership
Cooperating with
suppliers
The Supply Management Orientation
Focus on end-users
Craft a sourcing strategy
Build a supply network
Sustain highly collaborative
relationships with select suppliers
Apply purchasing portfolio
management
Putting Knowledge of Purchasing Orientation to
Use
UNDERSTANDING HOW PURCHASING WORKS WITH OTHER FUNCTIONS AND
FIRMS
Value Management as a Cooperative Framework
Adding Value to the Purchasing Process through
Buying Teams
Team member roles
Buying situations
Buying team tasks
Working with Suppliers and Across Functions
Developing supply
resources
Improving existing
offerings
Contributing to new offering
realization
UNDERSTANDING THE PURCHASE DECISION PROCESS
Understanding Customer Requirements and
Preferences
Converge on customer
requirements
Map customer activity and
value cycles
Learning the Customer’s Purchase Process
Evaluating Supplier Performance
Reviewing price, quality, and
availability
Scrutinizing total costs
Tracking supplier value
SUMMARY
CHAPTER 4: CRAFTING MARKET STRATEGY
OVERVIEW
BUSINESS STRATEGY AS THE CONTEXT FOR MARKET STRATEGY
A Resource-Based View of the Firm
Core competencies
Capabilities
Brands as resources
Reliance on outside partners
for resources
Fundamental Value-Based Strategies
Product leadership
Customer intimacy
Operational excellence
Strategy Making
Who makes strategy?
Defining purpose
Strategy as orderly advances
punctuated by radical change
PLANNING MARKET STRATEGY IN BUSINESS MARKETS
What Do We Know?
Review recent performance
Gather essential market
information
Construct scenarios
What Do We Want to Accomplish?
Targeting
Setting goals and
objectives
Positioning in business
markets
Customer value
propositions
Building brands in business
markets
How Will We Do It?
Develop an action plan
Marketing and sales
programs
Take stock of implementation
skills
Learning and adapting
SUMMARY
SECTION III: CREATING VALUE
CHAPTER 5: MANAGING MARKET OFFERINGS
OVERVIEW
SOME CONVENTIONAL THINKING ABOUT MARKET OFFERINGS
The Tunnel Vision of Commodity Markets
Understanding the true extent
of commoditization
Rebuilding
differentiation
Services as Core Products in Market
Offerings
CONSTRUCTING FLEXIBLE MARKET OFFERINGS
The Concept of Flexible Market Offerings
Articulate the Present Market Offering for Each
Market Segment
The true breadth of the
market offering
The arbitrary nature of
charges
Lack of variation across
segments
Assess Customer Value and Supplier Cost
Measuring customer value
Coming to grips with service
costs
The payoff from value and
cost assessments
Formulate Flexible Market Offerings by Market
Segment
Reevaluating existing
standard services
Reexamining optional
services
Building flexibility with new
services
Pricing Implications
Prepare to Implement Flexible Market
Offerings
Option menu versus
tailored-value package
Branding market offerings
Anticipating implementation
problems with customers
Breaking away from the
pack
VALUE-BASED PRICING
Traditional Pricing Approaches
Cost-plus pricing
Competition-based pricing
An Approach to Value-Based Pricing
MANAGING MARKET OFFERINGS ACROSS BORDERS
Adapting Market Offerings Across Borders
International market
development
Providing transnational
market offerings
Global branding
Pricing Across Borders
Pricing in local markets
Harmonizing pricing across
borders
SUMMARY
CHAPTER 6: NEW OFFERING REALIZATION
OVERVIEW
REALIZATION STRATEGY
Development Goals and Objectives
Overall development goals
Project objectives
The Aggregate Project Plan
Mapping the kinds of
development projects
Making capacity decisions
Gaining critical skills and
capabilities
Concurrent Engineering in Realization
Strategy
Point-based versus set-based
approaches to concurrent engineering
Set-based concurrent
engineering and flexible market offerings
Outside Development Relationships and Networks
in Realization Strategy
Alternate development
structures
Aims of development
relationships and networks
Decision considerations
REALIZATION PROCESS MODELS
A Variety of Realization Process Models
Smallfry Industrial
Design
AKZO NOBEL Coatings
Kleinwort Benson Investment
Management
ABB Asea Brown Boveri large
system projects
ABN-AMRO Bank Global
Transaction Services
A General Realization Process Model
Augmenting services in
realization process models
“Next generation” realization
process models
MARKET-ORIENTED REALIZATION
Market-Oriented Research
Create focused research
centers
Connecting research with the
market
Market-Oriented Development
Positioning statements as a
market-focusing mechanism
Researching market
requirements and translate them into design specifications
Guiding realization efforts
with customer value assessment
Tailoring market
introductions of new offerings
SUMMARY
CHAPTER 7: BUSINESS CHANNEL MANAGEMENT
OVERVIEW
DESIGNING SUPERIOR VALUE-ADDING MARKETING CHANNELS
Specify Marketing Channels Goals and
Objectives
Assess the Customer Value of Potential TCE
Elements
Envision a Value Proposition for Each Targeted
Market Segment
Reformulate the Intended TCE for Each Targeted
Market Segment
Configure the Channel Network
Maximize market access by
balancing exposure and coverage
Optimize value-added through
postponement or speculation
Minimize cost-to-serve via
functional acquisition and functional spin-off
Build a channel network model
Finalize Marketing and Distribution Arrangements
Devise profit models
Carefully select channel partners
Consider e-business and wireless
technologies
Build international marketing channels
Formalize partnership agreements
CREATING VALUE THROUGH DIRECT CHANNELS
Creating a Sales Force of Value Merchants
Internally promote a
value-based marketing philosophy and culture
Train value merchants
Compensate value merchants
based on profitability of accounts
Deploying Value Merchants
Establish necessary sales
units
Determine the number of value
merchants needed
Designate areas of
responsibility
Assign value merchants to
areas of responsibility
Designing a Logistics System that Creates
Value
Segment the market into
logistically distinct businesses
Establish differential
service standards for each market segment
Tailor unique logistics
systems to deliver differential services
Exploit economies of scale
among the different logistics systems
STRENGTHENING RESELLER PERFORMANCE
Building Marketplace Equity
Decompose marketplace
equity
Cultivate brand and reseller
equity
Determine Reseller Performance Expectations
Assess the Reseller Value of Channel Offering
Elements
Construct a channel
positioning matrix.
Craft a Reseller Value Proposition and Channel
Offering
Devise and pretest the
channel offering.
Improve reseller
target-marketing efforts via tailored channel offerings.
Communicate the Reseller Value Proposition
SUMMARY
SECTION IV: DELIVERING VALUE
CHAPTER 8: GAINING NEW BUSINESS
OVERVIEW
DIFFERENTIATING POTENTIAL BUSINESS
Managing Single Transactions
Managing Long-term Customer Relationships
Impact of Selection Decisions on Suppliers
PROSPECTING FOR NEW BUSINESS
Generate Leads from Business Market
Databases
Prompting and Gathering Inquiries via Integrated
Marketing Communications
Use integrated marketing
communications to reach the target market
Encourage and process
inquiries
Foster strong brands
Qualifying Leads and Inquiries
Getting the Sales Force to Follow-Up with
Prospects
Provide knowledge to create
an informed sales force
Motivate sales
representatives to follow-up
Give sales representatives
experience dealing with prospects
Furnish abundant sales
support
ASSESSING FIT
Understanding and Communicating Value
Communicate the Four Types of Customer
Benefits
The value stack
ORGANIZING THE SELLING EFFORT
Scheduling the First Meeting
Getting started for
orders
Initiating dialogue for new
customer opportunities
Learning Prospect Requirements and Preferences
and Communicating Value
Plan the call
Open the call
Investigate requirements and
preferences
GAINING THE INITIAL TRANSACTION
Transaction versus Consultative Selling
Demonstrating and Documenting Value
Propose solutions
Gain the initial
transaction
Negotiating the First Sale
Pricing the initial
offering
Negotiation approaches
Understanding BATNA
INITIAL ORDER FULFILLMENT
Coordinating Supplier Functions
Completing the Transaction
Manage revenue
Follow up with prospects
after the sale
VALIDATING THE INITIAL DESIGNATION OF ORDER VERSUS CUSTOMER
SUMMARY
CHAPTER 9: SUSTAINING RESELLER PARTNERSHIPS
OVERVIEW
ALIGNING MUTUAL SELF INTERESTS AND COMPLEMENTARY RESOURCES
Insuring Alignment
STRENGTHENING PARTNERSHIPS IN A STABLE MARKET
Fulfilling Supplier Commitments to Deliver
Value
Train and coach partner
firms
Provide responsive sales and
marketing programs
Back-up resellers with
pricing support
Furnish operational and
technical support
Fulfilling Reseller Commitments to Deliver
Value
Provide consistently superior
service to customer firms
Innovate in the local
marketplace
Enhance the supplier’s brand
equity
Strengthening Interfirm Coordination
Participate in joint annual
planning
Clarify roles and
responsibilities through written agreements
Improve communications
through bridging
Synchronize efforts with a
partner relationship management system
Ensuring that Value is Delivered
Conduct market research
Getting an equitable return
on delivered value
RESPONDING ADAPTIVELY TO INCREMENTAL MARKET CHANGES
Adjusting Commitments
Establish a reseller advisory
council
Reformulate channel partners’
gives & gets
Make responsive adjustments
to the joint annual plan
Seek influence among channel
partner firms
Establish a process and
procedures for conflict resolution
Creating Adaptive Channels
Provide support in
extraordinary situations
Responsively broaden the
market offering
Share capabilities with other
channel members
TRANSFORMING CHANNELS IN THE FACE OF DISRUPTIVE FORCES
Creating integrated multi-channels
Skillfully Handling Relationship Transfers
Delineate relationship
transfer criteria
Establish equitable
compensation for relationship transfers
Terminating Partnerships
SUMMARY
CHAPTER 10: MANAGING CUSTOMERS
OVERVIEW
DIFFERENTIATING TRANSACTIONAL AND COLLABORATIVE CUSTOMERS
Thinking strategically about relationships
Consider industry
bandwidths
Partnering as a focused
market strategy
PURSUING CONTINUITY AND GROWTH
Pursuing Growth in a Customer Account
Estimate and target share of
customer’s business
Two generic approaches to
building share over time
Pursuing Continuity
Promote honest and open
communication
Build trust and
commitment
Implement coordination
mechanisms
Anticipate and resolve
conflicts
DELIVERING SUPERIOR VALUE WITH RELATIONSHIP-SPECIFIC OFFERINGS
Construct Relationship-Specific Market
Offerings
Price Relationship-Specific Offerings
Organize to Deliver Relationship-Specific
Offerings
Focused Share Building
Pursue single sourcing and
multiple-single-sourcing
Building new organizational
capabilities
Adopt new profit models
Document the profitability of
greater share
MANAGING A PORTFOLIO OF CUSTOMERS
Measuring Cost-to-Serve Customers and Customer
Loyalty
Using the Loyalty Ladder to Manage Customer
Relationships
Executing Migration Strategies
Emerging CRM Applications
Allocating resources for
customer acquisition, retention, and growth
Synchronizing marketing
efforts
Updating customer value
SUSTAINING CUSTOMER RELATIONSHIPS THROUGH CONNECTED
RELATIONSHIPS
Managing within a Business Network Context
Adding Value through Business Networks
LOOKING AHEAD – A FINAL THOUGHT ON MANAGING CUSTOMERS
SUMMARY
Index
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