Managing Business Marketing & Sales

1. Managing Business Marketing & Sales Professor Waldemar A. Pfoertsch弗沃德 Term 4/MBA 2006 Oct. 8 -28, 2007

2. How do organizations buy? • Derived demand • Multiple Buying influences • Long Term relationship

3. How do organizations buy? • Make or Buy or Outsourcing • Reciprocity • Competing with the customers

4. Organization of Purchase Function • International Aspects • Professional Buyer • Professional Purchasing

7. DIPROD • Hexonic Acid • UPAC Name: 2,3,4,5,6pentahydroxyhexanoic acid • CAS Number 5328-41-6Chemical • Formula

8. Purchasing Objectives

9. Market Development Hexonic Acid • 3000 t • Canchem 60% • & Alfo 40% • Shortage over the last 2 years • Depressed prices • Low capacity

10. DIPROD Business Ethics

11. The player • Brent Miller Purchasing agent at DIPROD • Mr. Baker at Alfo • Mr. Wallace of Michigan Chemicals • Mr. Aldert Canchem

12. Final Quotes

13. DIPROD Case Questions: • Evaluate DIPROD’s purchasing objectives and the firm’s policies with respect to its suppliers. What would be your recommendation as to the possible change? Support your recommendation. • If you were Brent Miller, what would you decide with respect to the Hexonic contract award? Support your decision. • What are the key points that each supplier might make in support of its bid? Explain the rationale for them

14. Big Account Management at Dell China

15. Dell China • $ 220 Q 2004 • 9% market share • No. 3

16. Dell’s selling in China • Direct selling • To customer’ special demand • Selling types: • “relationship mode” • “trading mode”

17. Dell’s China Segments • Relationship customer (companies with more than 3,000 employees), including: - Public sector – educational departments from the government - Business sector – telecommunication, energy, finance, insurance, automobile, petrol, chemical, and airline industries - Global account – world top 500 enterprises which have purchase contract with Dell (2) Middle-sized customer (companies with 500-3,000 employees) (3) Small-sized and family customer (companies with less than 500 employees and individual consumers

18. Dell’s China sales • Sales districts as profit centers • External / Internal sales force ratio • RAD method • Customer types: • below 0.5 million, • between 0.5 and 1 million, and • above 1 million US dollars.

19. RAD • R Retention • SOW, share of wallet, refers to the percentage of purchase from Dell in the client’s overall IT investment, > 50 % • SOA, share of account, refers to Dell’s coverage on the departments or subsidiaries of the client which have independent purchase power, > 50 %. • A Acquisition • BP, buying power, refers to the annual IT purchase of the client • D Development • it relates to client with SOW between 10% - 50%

20. RAD categories

21. The creation of RAD model is shown in the following steps • The first step: creating the current client database • The second step: analyzing the data • The third step: determining the RAD framework • The fourth step: making a working plan

23. Big Account Management at Dell China • Describe Dell’s marketing efforts in China. How did they segment the market? • What is the structure of Dell sales management in China? • Evaluate the RAD tool: What option does it open up for the company and the sales team? • Apply the 4 step approach for another industry/company. • Can you recommend other ways for big account management?

24. Customer portfolio strategy matrix Key account Portfolio Analysis Supplier’s business strength with customer High Low High Strategic: invest Future stars: selectively invest Customer attractiveness Bread & butter: maintain Volume: manage for cash Low Key customer Developed from McDonald, Millman & Rogers, 1996

25. Thank you!谢谢！ Waldemar Pfoertsch Professor Business Marketing CEIBS 699 Hongfeng Road, Shanghai China