Page 217 - Marketing Management

194 PART 3 CONNECTING WITH CUSTOMERS

of the difference between perceived benefits and perceived costs. 28 The marketer’s task is to con-
struct a profitable offering that delivers superior customer value to the target buyers.
Business marketers must therefore ensure that customers fully appreciate how the firm’s offer-
ings are different and better. Framing occurs when customers are given a perspective or point of
view that allows the firm to “put its best foot forward.” Framing can be as simple as making sure
customers realize all the benefits or cost savings afforded by the firm’s offerings, or becoming
more involved and influential in the thought process behind how customers view the economics
of purchasing, owning, using, and disposing product offerings. Framing requires understanding
how business customers currently think of and choose among products and services, and then
determining how they should ideally think and choose.
Supplier diversity is a benefit that may not have a price tag but that business buyers overlook
at their risk. As the CEOs of many of the country’s largest companies see it, a diverse supplier
base is a business imperative. Minority suppliers are the fastest-growing segment of today’s
business landscape.

Pfizer One of the biggest names in pharmaceuticals, Pfizer, views its supplier-diversity
Pfizer program as an essential tool in connecting with customers. Chief Diversity Officer Karen
Boykin-Towns directs diversity efforts that include recruitment and talent development inside
the company, as well as engaging with customers and suppliers outside the company. For
leadership, Pfizer also relies on a diversity and inclusion worldwide council and an infrastruc-
ture of “ambassadors” throughout the company. Pfizer concentrates its diversity efforts on women, LGBT,
people with disabilities, Latino/Hispanics, Asian Pacific Islanders, U.S. Caribbeans, and African Americans.
The company has spent about $700 million with 2,400 minority and women suppliers. Pfizer has even
developed a mentoring program that identifies women and minority suppliers that need help growing,
whether it’s designing a better Web site or building a better business plan. Pfizer managers meet with the
owners, often on-site, to figure out what they need. 29

In the past,purchasing departments occupied a low position in the management hierarchy,in spite
of often managing more than half the company’s costs. Recent competitive pressures have led many
companies to upgrade their purchasing departments and elevate administrators to vice presidential
rank. These new, more strategically oriented purchasing departments have a mission to seek the best
value from fewer and better suppliers. Some multinationals have even elevated them to “strategic sup-
ply departments” with responsibility for global sourcing and partnering. At Caterpillar, purchasing,
inventory control, production scheduling, and traffic have been combined into one department. Here
are other companies that have benefited from improving their business buying practices.
• Rio Tinto is a world leader in finding, mining, and processing the earth’s mineral resources
with a significant presence in North America and Australia. Coordinating with its suppliers
was time consuming, so Rio Tinto embarked on an electronic commerce strategy with one key
supplier. Both parties have reaped significant benefits from this new arrangement. In many
cases, orders are being filled in the suppliers’ warehouse within minutes of being transmitted,
and the supplier is now able to take part in a pay-on-receipt program that has shortened Rio
30
Tinto’s payment cycle to around 10 days.
• Mitsui & Co. Ltd is a leading Japanese trading firm that owns more than 850 companies and
subsidiaries. When the firm took its purchase orders and payments transactions for one group
online, it reduced the cost of purchase transactions by 50 percent and increased customer
satisfaction due to greater process efficiencies. 31
• Medline Industries, the largest privately owned manufacturer and distributor of health care
products in the United States, used software to integrate its view of customer activity across
online and direct sales channels. The results? The firm enhanced its product margin by
3 percent, improved customer retention by 10 percent, reduced revenue lost to pricing errors
by 10 percent, and enhanced the productivity of its sales representatives by 20 percent. 32
The upgrading of purchasing means business marketers must upgrade their sales staff to match
the higher caliber of today’s business buyers.