2-2-11

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2-2-22

Chapter 2

The Character ofThe Character of

Business MarketingBusiness Marketing

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2-2-33

CESSNA AIRCRAFT COMPANY TURNAROUND STRATEGY

INTEGRATED THREE CRITICAL PROCESSES:

1.NEW PRODUCT DEVELOPMENT

2.STRATEGIC SOURCING

3.SUSTAINING PRODUCTION PRODUCTION

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2-2-44

SUPPLY CHAIN MANAGEMENT

SCM INVOLVES . . .

INFORMATION SHARING

JOINT PLANNING

COORDINATION OF EFFORTS TO

• ELIMINATE WASTE

• BE INNOVATIVE

• IMPROVE QUALITY

• PROVIDE FLEXIBILITY

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2-2-55

BUSINESS TO BUSINESS:WHAT DETERMINES A

SUCCESSFUL RELATIONSHIP?

• THE SELLER’S MOTIVATION TO RELATE

• THE BUYER’S MOTIVATION TO RELATE

IF THEY AREN’T EQUALLY MOTIVATED IT WON’T BE AN EQUAL RELATIONSHIP

MOTIVATION !

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2-2-66

BUSINESS TO BUSINESS:THE TYPES OF RELATIONSHIPS

BUYER’S MOTIVATION TO RELATE IS

WHEN SELLER’S MOTIVATION TO RELATE IS

LOW

HIGH

LOWSELLER’S ADVANTAGE

RESULTS INSTRATEGIC PARTNERSHIPS

TRANSACTIONAL RELATIONSHIPS

RESULTS INBUYER’S ADVANTAGE

HIGH

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2-2-77

High

Low

Seller’s motivation to relate

Buyer’s motivation

to relateHighLow

Seller’s market

Seller-maintained relation Joint

relationshipmaintenance

Buyer-maintained relation

Buyer’s Market

Discrete exchange(spot contracts)

Noexchange

EXHIBIT 2-2

THE REALM OF RELATIONSHIPS

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STRATEGIC PARTNERSHIPS

OCCUR WHEN BOTH PARTIES HAVE

MUTUALLY STRONG INTERESTS

IN MAINTAINING AN

ONGOING EXCHANGE

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2-2-99

JIT RELATIONSHIPS

A SUPPLIER PRODUCES AND DELIVERS

PRECISELY . . .

• THE NECESSARY QUANTITIES

• AT THE NECESSARY TIME

• WITH THE NECESSARY PERFORMANCE

SPECIFICATIONS . . .

EVERYTIME

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2-2-1010

GOING FOR HIGHPERFORMANCE RELATIONSHIPS

DEVELOP

A

COMMON

GROUND

BUYERS

Want:

Reliable delivery without interruptions

Reliable products Reliable products with low rejection with low rejection and defect ratesand defect rates

Efficient lead timesEfficient lead times

SELLERS

Want to:

Sell Large Volumes

Sell similar amounts over time

Manage their Manage their selling and selling and support expensessupport expenses

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REQUIREMENTS FOR HIGH PERFORMANCE RELATIONSHIPS

GOES BEYOND THE FINANCIAL CONSIDERATIONS:

• INTEGRITY

• FAIRNESS

• LOYALTY

• FLEXIBILITY

• INPUT INTO YOUR PARTNER’S STRATEGY

• PARTNER’S INPUT INTO YOUR STRATEGY

• COMPLIANCE WITH PROCEDURES AND AGREEMENT

• HONOR COMMITMENTS

• STAND BEHIND YOUR PRODUCTS

2-McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved

2-2-12122-2-1212Exhibit 2-4

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THE RELATIONSHIP DEVELOPMENT PROCESS1. Awareness

2. Exploration

3. Expansion

4. Commitment

1.

No interaction. Unilateralconsiderations of potential Partners.

2..

Interaction between the parties occurs. A gradual increase in dependence reflects probing and testing. Termination of this fragile association is simple

3.

One party has made a successful request for adjustment. Both parties are satisfied with some customization involved. Additional benefits from products, services, or terms are sought from the current partner rather than from an alternative partner.

4.

Some means of sustaining the relationship result contracts, shared ownership, social ties, inputs are significant and consistent. Partners adapt and resolve disputes internally

Relationship phase Phase characteristics

Source: Adapted from F. Robert Dwyer, Paul H. Schurr, and Sejo Ob, “Developing Buyer-Seller Relationships.: Used with permission from the Journal of marketing, published by the American Marketing Association, vol 52 (April 1987), p.21.

Expectationsdevelopment

Attraction Communication & bargaining

Power &justice

Normdevelopment

Shared values and decision-making structures

support joint investment in relation.

0 Seller’s dependence on buyer Buyer’s dependence on seller 0

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TWO CHOICES FOR STAYINGIN A BUSINESS RELATIONSHIP

1. YOU WANT TO.

• THE REWARDS ARE FINANCIAL, STRATEGIC OR PSYCHOLOGICAL

2. YOU HAVE TO.

• THE COST TO EXIT IS TOO HIGH OR THERE ARE NO ALTERNATIVES

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2-2-1414

SUGGESTIONS FOR MAKING BUSINESS- TO-BUSINESS RELATIONSHIPS LAST

• MAKE ON-SITE VISITS TO YOUR PARTNER

• TRADE PERSONNEL AND OFFICES

• MANAGE TOTAL DEPENDENCE WITH AN

ALTERNATE SUPPLIER

• MAKE THE PLEDGE OF CONTINUOUS SERVICE

• DEVELOP A RELATIONAL CONTRACT

• PROVIDE OWNERSHIP BY BRINGING FUNCTIONS OR

TECHNOLOGY WITHIN BOUNDARIES OF PARTNER’S

FIRM

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