Essay Example on The value creation in B2B market

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Being the industrial marketer of the company TRUCKERS it is important to first identify what kind of business we are into and what type of customers we are trying to sell our product to I shall assume in the answer that the business is B2B where the forests would be harvested and the wood sold to other businesses I assume the company's product would be raw wood Our company is harvesting wood from the forest then moves it outside of the forest to the lumber yard of the company where the wood logs are further refined and then shipped off to be sold Pricing for a marketer is the most important component to formulate a marketing plan Determining the price of a product can be very difficult at times because there are many factors that need to be studied very deeply before finalizing the products price When looking at our company as mentioned before we are going to be selling our produce to other business markets There are three main approaches to pricing Cost based Competition based and value based Costing The value creation in B2B market is a lot more than just determining the price of the product we have to look at several cost factors Production Costs which in this case is the heavy machinery tools and labor to harvest the forest Product Management Cost There will be other management costs like designing a framework for cutting the trees and how to load them and which machinery to use and where and how much wood to be transported Inventory Cost 



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The cost to keep the wood in the lumber yard can be included here Capital Cost These are the fixed costs that need to be considered before the start of operation Like buying the equipment machinery trucks for loading and unloading Administration The administration costs for logistics supply chain management legal issues and taxes These things will make up for the total costs of the product which is essential in deciding the product s final price Competition The competition is also an important part of the decision making process for pricing In this case we assume that there is competition and obviously they will affect the pricing for our product but we will not base our pricing based on the activities of the competitors but the quality of our product and creating value for our customers through our price Value Based And our aim will be to formulate long term business relationships with our customers through value creation and networking Whenever we look at B2B pricing it is important to note that price is not set by the seller or supplier but through interaction and resource combinations Lecture 6 B2B marketing For a long term relationship with our customer we also have to understand what our customer s purchasing strategy is Are they using the promiscuity or the partnership strategy for their business We assume we will be targeting the companies with the partnership based purchasing strategies and marketing them our product b Analyzing potential new customers 10 p

In B2B markets our customers are the other businesses In our case it will be other companies that require wood for their manufacturing processes or other activities like furniture home appliances or construction etc B2B customers are a lot different than B2C customers and marketing and analyzing them can be a challenge To analyze the potential new customers we have to look at several things B2B customers have more complex decision making units In other words they often have purchasing and procurement departments that buy stuff after the scrutiny of the product according to their standard and criteria And the decision to buy one type of product can take a lot of time Our customers as businesses are more rational in decision making than normal consumers Average customers tend to buy stuff that they want to buy but the B2B customer will only buy what they need to buy B2B customers are not as large as the B2C market customers are B2B customers are usually found to be very small in number and thus our size of customers in the timber industry are also not that big themselves B2B buyers are usually long term buyers 



But in our case our customers will have to buy our equipment quite frequently because of the fact that they are in the furniture and home appliances manufacturing business These items are always in flow in the market And thus it means that our customers will be requiring our good very often Some other factors to look at when analyzing the customers are Behavioral In this part we have to deeply understand what creates value for the customer company Are they price sensitive Are they delivery sensitive Are they quality sensitive Or are they all of them Demographic In this part we have to analyze the size of the buying company and the kind of products the company makes The size and requirements of the company will greatly influence our work rate in the forest harvestation Geographic We have to look at the customers whether they are close to our lumber yards or not Because the further they are from our warehouses the cost it will be for us One more thing could be the language or mode of communication between the our company and the buyer



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