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Business-to-Business Marketing R&D Strategies in Industrial Markets

Business-to-Business Marketing R&D Strategies in Industrial Markets. Haas School of Business UC Berkeley Fall 2008 Week 5 Zsolt Katona. Where we stand. Week 3 Pricing in Industrial Markets Week 4 Diving into Industrat Week 5 R&D Strategies in Industrial markets: Sealed Air

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Business-to-Business Marketing R&D Strategies in Industrial Markets

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  1. Business-to-Business MarketingR&D Strategies in Industrial Markets Haas School of Business UC Berkeley Fall 2008 Week 5 Zsolt Katona

  2. Where we stand • Week 3 • Pricing in Industrial Markets • Week 4 • Diving into Industrat • Week 5 • R&D Strategies in Industrial markets: Sealed Air • Industrat Decision 4 • Week 6 • Sales Force Design and Management

  3. R&D Overview • What is research and what is development? • Market driven vs. market driving strategies • Specifics in B2B markets: work together with your customer, co-development

  4. Capability Technology Takes longer Higher Risk on Investment Microprocessor Nanotechnology Product Specifications Relatively fast Low risk if the firm knows what it wants PC Specialty chemicals Research versus Development

  5. What is the goal of R&D? Market-driving and market-driven strategies • Serve existing demand (market-driven) • Focus on new product development using existing technologies • Can be profitable in the short term • Create new demand (market driving) • More common in research intensive markets • Needs more time to succeed Sealed Air

  6. How to Find New Opportunities in a B2B Context How do our potential customers make profits? Analyze their revenue drivers Analyze their cost drivers You Key: Understand who their customers are Understand how they serve their customers Your Customer Your Customer’s Customers

  7. Revenue Drivers • What can we give/develop for them that would: • Allow them to better serve their customers? (give their customers a greater value proposition, greater satisfaction) • Allow them to gain competitive advantage? (time to market, better reliability over rivals, give their customers unique capabilities) • Understand who their customers are and what value propositions they are looking for

  8. Cost Drivers • What can we give/develop for them that would: • Reduce need for costly labor • Deploy physical resources more efficiently? (less real estate, less IT overhead) • Understand the customer’s business and production process and how they serve their customers

  9. Co-development of products in industrial markets • Product development may be inter- twined with the customer’s adoption process. • Product development and adoption sub-processes: • Problem recognition • Need analysis • Product concept • Technology choice • Financial analysis • Product design • Production sourcing • Unit commitment • Use implementation • Seller and buyer may cooperate at different levels for each step.

  10. Traditional Transactionand Customization development adoption

  11. Traditional Transactionand Co-development development adoption

  12. Transaction (Supplier-Customer) Co-development (Joint venture) Custom (Merger) Co-development and Buyer-Seller Relationship

  13. R&D Summary • Research and Development are not the same • Strategic decision: market driving R&D or marketing driven R&D • Working with your customer throughout the development process

  14. Industrat Stock Prices 14

  15. Prediction Market 15

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