B2B Marketing Managing The Product Line PGDM–B2B–RS–10

1. B2B MarketingManaging The Product LinePGDM–B2B–RS–10 Amarnath Krishnaswamy

2. Plan for this Session (1) Core Competency Identification Exploitation Product Quality Views Total Quality

3. Core Competency

4. Core Competence - Definition • Unique set of skills or production techniques that deliver value to the customer. (Does the definition make it “inward” focusing?) • Takes a product or production orientation rather than a market orientation.

5. Core Competence - Identification • Three tests. Must satisfy all three! • Provides potential access to a wide variety of markets. • Should make a significant contribution to the perceived customer benefits of the end product. • Should be difficult for competitors to imitate. • Complexity • Spread – within the organization – across suppliers and customers

6. Core Competence – Identification Errors • Errors in confusing “core competency” with” • Scarce or unique “resources” (Threshold Resources) • Do not comply with all 3 tests (Threshold competencies)

7. Competitive Advantage – Requirements • To gain a competitive advantage, organisation needs: • Material resources (Most straightforward. Easiest to achieve) • Human resources (Skills) • Intangible resources (Core competencies)

8. Exercise Remember, there is no unique “formula” or “solution” for these exercise. It needs effort, and analysis on your part.

9. Exercise 1 Pick a company. What are its core competences, threshold competences, scarce resources, and threshold competences? Plot them onto a diagram.

10. Exercise 2 For the same company, what are its material resources, human resources, and intangible resources? Plot them onto a diagram

11. Answer 1 – ITC Tobacco Division Threshold Resources Scarce Resources • Factories – located all over India • Captive printing unit ? • Marketing • Finance • Production • Brand building capability • Supply Chain Management • Distribution reach Threshold Competencies Core Competencies Ease to imitate

12. Answer 2 – ITC Tobacco Division • Factories – located all over India • Captive printing unit • Factories – located all over India • Captive printing unit • Factories – located all over India • Captive printing unit Material Resources Human Resources Intangible Resources Increasing Difficulty To Achieve

13. Core Competency - Exploitation • Focus on a core competency that will be most attractive to the client. • Examples: • L&T – Cutting edge technology • SAP – Customized ERPs • Mittal Steel – Use of Direct Reduced Iron (DRI) in place of scrap in steel making

14. Product Quality

15. Product Quality – Views • Meaning can differ when viewed by: • Within the organization • Meeting the customers’ requirements • Outside the organization • Giving “value” to the customer

16. Total Quality Strategy • Buyers evaluate suppliers on the basis of total offering • There are 3 dimensions to this: • Product Quality • Specifications • Performance – Reliability, Durability etc • Support Quality • After-sales service • Delivery Quality • Delivery schedule • Response to changes in schedule

17. Finally … Daisy Chaining An illegal financial practice whereby traders create artificial transactions in order to make a particular security appear more active than it is in reality. Distrain To seize assets belonging to a person or organization in order to pay off a debt.

18. Moving Forward Next Session: PGDM-RS-11 Date: Thursday, Feb 18, 2010 Subject: Managing the Product Line - Product Policy - Product Strategy

19. Thank you !