Page 225 - Marketing Management

202 PART 3 CONNECTING WITH CUSTOMERS

approaches. They are increasingly using online social media in the form of company blogs,
online press releases, and forums or discussion groups to communicate with existing as well as
prospective customers.

Tellabs Competing with industry giants Alcatel-Lucent and Cisco Systems, Tellabs
is a telecommunications equipment design and research company that provides equipment
to transmit voice, video, and data across communication networks. To differentiate itself,
Tellabs decided to develop a marketing campaign that would focus on tech-savvy end users
of products its customers sold. The campaign, “Inspire the New Life,” targeted telecommuni-
cation service providers to show how Tellabs understood the new generation of technology users and
provided solutions to meet their needs.After research showed
users were five times more likely to listen to an audio podcast
than to read a white paper, and twice as likely to watch a
video than listen to a podcast, Tellabs decided to use six-
minute video “technology primers” instead of traditional case
studies and white papers. Its videos posted on YouTube,
Google Video, and the company’s Web site were downloaded
100,000 times.Adding a new podcast once or twice a month,
the company estimated that the campaign generated three
times the exposure, for the cost, than a traditional ad-based
Web campaign. 54

The Benefits of Vertical
Coordination
Much research has advocated greater vertical coordination
between buying partners and sellers, so they can transcend
merely transacting and instead engage in activities that
55
create more value for both parties. Building trust is one
prerequisite to healthy long-term relationships.“Marketing
Insight: Establishing Corporate Trust, Credibility, and
Reputation” identifies some key dimensions of such trust.
Knowledge that is specific and relevant to a relationship
partner is also an important factor in the strength of inter-
firm ties. 56
A number of forces influence the development of a
relationship between business partners. 57 Four relevant
factors are availability of alternatives, importance of
supply, complexity of supply, and supply market
dynamism. Based on these we can classify buyer–supplier
relationships into eight categories: 58
Tellabs differentiates itself by its
1. Basic buying and selling—These are simple, routine exchanges with moderate levels of coop-
focus on the customers of its
eration and information exchange.
customers.
2. Bare bones—These relationships require more adaptation by the seller and less cooperation
and information exchange.
3. Contractual transaction—These exchanges are defined by formal contract and generally have
low levels of trust, cooperation, and interaction.
4. Customer supply—In this traditional custom supply situation, competition rather than coop-
eration is the dominant form of governance.
5. Cooperative systems—The partners in cooperative systems are united in operational ways, but
neither demonstrates structural commitment through legal means or adaptation.
6. Collaborative—In collaborative exchanges, much trust and commitment lead to true
partnership.