Unit 3: B2B Marketing Strategy
Strategy Making and Strategy Management in B2B
B2B strategy is about creating long-term plans to satisfy business customers, beat competitors, and achieve organizational goals.
A. Strategy Making in B2B Markets
Strategy making includes the following steps:
| Step | Explanation (MBA Simple) |
|---|---|
| 1. Market Analysis | Study customer needs, industry trends, competitors, technology. |
| 2. Segmentation & Targeting | Divide business customers based on size, industry, usage; choose target segments. |
| 3. Positioning | Create a clear image (e.g., “reliable supplier”, “innovative partner”). |
| 4. Value Proposition Creation | Define what value is offered → quality, customization, cost-saving, speed. |
| 5. Product/Service Decisions | Choose features, technology, service support. |
| 6. Pricing Strategy | Decide pricing: cost-based, value-based, or competitive pricing. |
| 7. Distribution Strategy | Select channels: direct sales, distributors, online platforms. |
| 8. Promotional Strategy | Use personal selling, trade shows, technical brochures, LinkedIn marketing. |
| 9. Relationship Management | Build long-term partnerships and key account management. |
B. Strategy Management in B2B Markets
It involves implementing, monitoring, and modifying strategies as markets change.
Key Components
| Component | Explanation |
|---|---|
| A. Strategic Planning | Long-term planning based on market changes. |
| B. Key Account Management (KAM) | Managing high-value customers with personalized strategies. |
| C. Performance Tracking | Monitoring sales, customer satisfaction, delivery time. |
| D. Competitor Response Management | Adjusting strategy when competitors innovate or reduce prices. |
| E. Innovation Management | Launching new tech-based solutions regularly. |
| F. Relationship & Trust Building | Strong relationships = repeat business + stability. |
Industrial Product Strategy (B2B Product Strategy)
Industrial products are purchased by businesses for manufacturing, operations, or resale.
A. Types of Industrial Products
| Category | Examples |
|---|---|
| 1. Raw Materials | Steel, cotton, chemicals |
| 2. Component Parts | Tyres, microchips, motors |
| 3. Capital Equipment | Machinery, tools, servers |
| 4. MRO Supplies | Lubricants, cleaning materials |
| 5. Business Services | IT support, consulting, logistics |
B. Elements of Industrial Product Strategy
| Element | Explanation |
|---|---|
| 1. Product Quality Strategy | Focus on durability, performance, reliability. |
| 2. Customization Strategy | Modify product based on buyer’s needs (very common in B2B). |
| 3. Product Line Strategy | Offering multiple models, capacities, versions. |
| 4. Branding Strategy | Build trust through industrial branding (e.g., Bosch, ABB). |
| 5. Technology Strategy | Adopt advanced tech, digital integration, automation. |
| 6. Service Strategy | Include installation, maintenance, training, warranty. |
| 7. Lifecycle Management | Plan upgrades, spare parts, replacements. |
Managing Products and Services for Business Markets
Managing industrial products requires end-to-end planning.
A. Industrial Product Lifecycle Management
| Stage | Focus |
|---|---|
| 1. Introduction | Technical marketing, demos, early adopters. |
| 2. Growth | Increase capacity, improve quality, expand distribution. |
| 3. Maturity | Cost control, product differentiation, after-sales service. |
| 4. Decline | Replace with modern version or retire product. |
B. Managing Industrial Services
Industrial services include:
- Maintenance contracts
- Installation services
- IT & cloud services
- Consulting
- Training
Key Elements for Managing Services
| Element | Explanation |
|---|---|
| Service Quality | Speed, accuracy, reliability. |
| Service Customization | Tailoring service to business clients. |
| Technical Support | On-site technicians, remote support. |
| Service Level Agreements (SLAs) | Clear terms for uptime, response time. |
| Customer Education | Training sessions and product manuals. |
| After-Sales Support | Repairs, warranty processing, spare parts. |
Managing Solutions (Product + Service Bundle)
In B2B markets, companies offer integrated solutions, for example:
- Machinery + installation + maintenance
- Software + cloud support + analytics
- Equipment + training + AMC
This helps create long-term relationships and ensures customer dependence and loyalty.
Short Case Studies
Case Study 1: Siemens – Custom Industrial Solutions
Situation: A manufacturing plant needed automation solutions.
Strategy: Siemens’ engineers customized PLC and automation systems.
Result: 20% higher productivity → long-term service contract signed.
Case Study 2: Tata Motors – B2B Product Strategy
Situation: Logistics companies needed cost-effective trucks.
Strategy: Tata launched the “Tata Prima” series with high load capacity + low maintenance.
Result: Gained leadership in commercial vehicle segment.
Case Study 3: IBM – Product + Service Integration
Situation: A bank needed secure digital transformation.
Strategy: IBM offered cloud computing + cybersecurity + training.
Result: Bank improved efficiency; IBM secured multi-year contract.
Case Study 4: Caterpillar – Industrial Product Lifecycle Management
Situation: Construction firms wanted long-lasting machinery.
Strategy: Caterpillar provided machines + spare parts + AMC + digital monitoring.
Result: Strong customer loyalty and market leadership.
Short Revision Notes (1-Minute)
- B2B Strategy Making = market analysis → segmentation → positioning → value creation.
- Strategy Management = implementation, tracking, KAM, innovation.
- Industrial Product Strategy = quality, customization, product line, service, branding.
- Managing B2B Products & Services = lifecycle management + technical support + SLAs.
- Case Studies show practical application of industrial strategy.
Managing Business Market Channels (B2B)
Business Market Channels = The routes through which industrial products/services move from producer → business customer.
A. Types of Business Market Channels
| Channel Type | Explanation |
|---|---|
| 1. Direct Channel | Manufacturer → Customer (no intermediaries). Common in machinery, IT solutions. |
| 2. Distributor Channel | Manufacturer → Industrial Distributor → Customer. Suitable for MRO items, components. |
| 3. Agent/Broker Channel | Agents connect buyers and sellers for large industrial orders (commission-based). |
| 4. Online B2B Platforms | E-marketplaces like IndiaMART, Udaan, GeM (for govt). |
| 5. Value-Added Resellers (VARs) | Sell products + add installation, customization, support (common in IT). |
B. Channel Management Tasks
| Task | Explanation |
|---|---|
| 1. Channel Design | Selecting the best channel structure (direct/distributor/online). |
| 2. Channel Selection | Choosing capable distributors or partners. |
| 3. Channel Motivation | Incentives, margins, training, promotional support. |
| 4. Channel Coordination | Avoiding conflicts, maintaining communication, sharing data. |
| 5. Channel Evaluation | Measuring performance using sales, delivery time, service quality. |
C. Channel Conflicts in Business Markets
- Price conflicts
- Territory conflicts
- Duplicate sales efforts
- Delayed service from intermediaries
Solution: contracts, SLAs, communication, performance-based incentives.
Strategic Tools in Business Markets
A. Growth–Share Matrix (BCG Matrix)
Developed by Boston Consulting Group.
Used to analyze product/business portfolio.
| Quadrant | Meaning | Strategy |
|---|---|---|
| 1. Stars | High growth, high market share. | Invest heavily to maintain leadership. |
| 2. Cash Cows | Low growth, high market share. | Maximize profit, fund other units. |
| 3. Question Marks | High growth, low share. | Decide whether to invest or divest. |
| 4. Dogs | Low growth, low share. | Divest or discontinue. |
Purpose: Helps decide where to invest, hold, or exit.
B. Multifactor Portfolio Matrix
Used when decisions require multiple factors, not just growth and share.
Factors Used:
- Market Attractiveness (size, growth, profit potential, competition)
- Business Strength (brand, technology, distribution, financial strength)
Products/business units are placed in a 3x3 grid:
| Market Attractiveness | High | Medium | Low |
|---|---|---|---|
| Business Strength | Invest | Selective Investment | Harvest/Divest |
| Medium Strength | Selective Investment | Maintain | Harvest |
| Low Strength | Divest | Harvest | Exit |
C. Balanced Scorecard (BSC)
A strategic management framework to measure overall performance, not just financial.
Developed by Kaplan & Norton.
Four Perspectives:
| Perspective | Measures |
|---|---|
| 1. Financial | Revenue, ROI, profit margins. |
| 2. Customer | Satisfaction, retention, service quality. |
| 3. Internal Processes | Productivity, innovation, operations efficiency. |
| 4. Learning & Growth | Employee training, skills, technology adoption. |
Purpose: Aligns strategy → operations → daily activities.
Case Studies
Case Study 1: Schneider Electric – Channel Management
Problem: Schneider needed to distribute electrical components to industrial clients across India.
Strategy:
- Used multi-tier distributor network
- Offered training to channel partners
- Provided CRM tools for better coordination
Result: Faster supply, stronger partner loyalty, increased industrial sales.
Case Study 2: Samsung B2B – BCG Matrix
Situation: Samsung evaluated its B2B product lines:
- Servers → Question Mark
- Display Panels → Cash Cow
- IoT Solutions → Star
- Old Fax Machines → Dog
Strategy:
- Invested heavily in IoT
- Divested fax business
- Maintained display panel profits
Result: Higher profitability and a sharper product portfolio.
Case Study 3: L&T – Multifactor Portfolio Matrix
Problem: L&T had many business units (construction, IT, heavy machinery).
Application:
- Construction: High market attractiveness + high strength → Invest
- Shipbuilding: Medium attractiveness + low strength → Harvest
- Heavy machinery: High attractiveness + medium strength → Selective investment
Result: Better capital allocation and strategic focus.
Case Study 4: Infosys – Balanced Scorecard
Problem: Infosys wanted to improve global delivery efficiency and customer satisfaction.
Balanced Scorecard Steps:
- Financial: Improved billing efficiency
- Customer: Increased NPS (Net Promoter Score)
- Internal Processes: Faster delivery cycle
- Learning & Growth: Upskilled 25,000 employees through training
Result: Higher client retention and better profitability.
Quick Revision Notes
- Managing B2B Channels = design, select partners, motivate, coordinate, and evaluate.
- BCG Matrix = classify business lines as Stars, Cash Cows, Question Marks, Dogs.
- Multifactor Portfolio Matrix = analyzes market attractiveness and business strength.
- Balanced Scorecard = financial + customer + internal + learning perspectives.
- Case studies show practical application of strategy tools.