Page 207 - Marketing Management

184 PART 3 CONNECTING WITH CUSTOMERS

More dollars and items change hands in sales to business buyers than to consumers. Consider
the process of producing and selling a simple pair of shoes. Hide dealers must sell hides to tanners,
who sell leather to shoe manufacturers, who sell shoes to wholesalers, who sell shoes to retailers,
who finally sell them to consumers. Each party in the supply chain also buys many other goods and
services to support its operations.
Given the highly competitive nature of business-to-business markets, the biggest enemy to mar-
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keters here is commoditization. Commoditization eats away margins and weakens customer loy-
alty. It can be overcome only if target customers are convinced that meaningful differences exist in
the marketplace, and that the unique benefits of the firm’s offerings are worth the added expense.
Thus, a critical step in business-to-business marketing is to create and communicate relevant dif-
ferentiation from competitors. Here is how Navistar has adjusted its marketing to reflect the eco-
nomic crisis and a different customer mind-set.

Navistar Navistar sells trucks and buses under the International and IC brands. Its di-
verse customer base includes bookkeepers, truck drivers, insurance people, large retailers, and
so on. In recent years, these customers have been trying to cope with the harsh economic reali-
ties brought on by higher fuel prices, tougher federal regulation, and increased environmental
consciousness.To address these customer concerns, Navistar devised a new marketing strategy
and campaign. It introduced a new lineup of trucks and engines, including the first medium-duty hybrid truck
and new diesel engines. To support new product development, Navistar launched an extensive multimedia
marketing campaign that included an experiential truck stop and key industry event mobile tours, outbound
video e-mail, brand advertising, and an outreach program to bloggers. It
even shot a short documentary-style film, Drive and Deliver, which show-
cased three long-haul truckers driving around the country making deliveries
using one of Navistar’s new long-haul LoneStar truck models. 5

Business marketers face many of the same challenges as con-
sumer marketers. In particular, understanding their customers and
what they value is of paramount importance to both. A survey of top
business-to-business firms identified the following as challenges
they faced: 6
1. Understanding deep customer needs in new ways;
2. Identifying new opportunities for organic business growth;
3. Improving value management techniques and tools;
4. Calculating better marketing performance and accountability
Navistar’s innovative LoneStar metrics;
truck model was featured in a 5. Competing and growing in global markets, particularly China;
short film directed by an Academy 6. Countering the threat of product and service commoditization by bringing innovative offer-
Award nominee. ings to market faster and moving to more competitive business models; and
7. Convincing C-level executives to embrace the marketing concept and support robust market-
ing programs.
Business marketers contrast sharply with consumer markets in some ways, however:
• Fewer, larger buyers. The business marketer normally deals with far fewer, much larger buyers
than the consumer marketer does, particularly in such industries as aircraft engines and defense
weapons.The fortunes of Goodyear tires,Cummins engines,Delphi control systems,and other au-
tomotive part suppliers depends on getting big contracts from just a handful of major automakers.
• Close supplier–customer relationship. Because of the smaller customer base and the importance
and power of the larger customers, suppliers are frequently expected to customize their offerings to
individual business customer needs. Through its Supplier Added Value Effort ($AVE) program,
Pittsburgh-based PPG industries challenges its suppliers of maintenance, repair, and operating
(MRO) goods and services to deliver on annual value-added/cost-savings proposals equaling at least
5 percent of their total annual sales to PPG. One preferred supplier submitted a suggestion to $AVE
that reduced costs for a lighting project by $160,000 by negotiating discounted prices for new fix-
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tures and fluorescent bulbs. Business buyers often select suppliers that also buy from them.A paper
manufacturer might buy from a chemical company that buys a considerable amount of its paper.