Saxon Plumbing Services London Ltd (SPSL) in B2B and B2C Market

This study aims to investigate the feasibility of SPSL (Saxon Plumbing Services London Limited) in new B2B market. This study evaluates different business promotional tools in new markets and concludes the importance of additional sales force for SPSL in new B2B market. Afterwards, this study evaluates the importance of relationship marketing and business networks for SPSL in new market and identifies key benefits of above mentioned strategies in new market target market. In last, this study identifies key differences between B2B market and B2C market and suggests the strategies to SPSL which should be considered while entering into B2C market.

2: SPSL in New Market—Sales Force

2.1: Benefits of Sales Force

Sales force can be considered as a potential asset for a company and for most of the firms it is also a major investment (Zoltners et al., 2001). Due to potential benefits associated with sales force in B2B markets, major sales and marketing budget is allocated to sales force expense which includes their salaries, bonuses, training and development (Zoltners et al., 2001). Sales force is important for business because they are more authorised people and they directly interact with customers which show that sales force is entrusted with business customers which are the most important component of any business (Zoltners et al., 2001). Moreover, sales force is directly responsible for business growth or failure (Zoltners et al., 2009). It is also an essential part of go-to-market strategy (Zoltners et al., 2009). On the basis of above discussion it is concluded that SPSL will attain required benefits in new market with the help of additional sales force.

2.2: Types of Sales Force

Different types of sales force can be employed in new B2B market by SPSL such as geographical, product-based or client-based. Geographical based sales force can be helpful in dealing customers more effectively and can generate maximum sales from their own area (Feigenbaum, 2014). In product-based sales force, sales people become experts in specific product or service and can become useful in handling specific problems effectively (Feigenbaum, 2014). In Client-based approach, sales people are assigned duties to serve a certain client only and all issues relating to that particular person will be addressed by a particular sales person/service provider (Feigenbaum, 2014). As SPSL will serve SME segment in Manchester market as well so product/service-based sales force will provide required benefits to SPSL in Manchester B2B market. Moreover, training and development programmes of SPSL enable its employee to become client/service based sales force in new market.

2.3: Business Promotion Tools—Options for SPSL

Despite the benefits associated with sales force, SPSL has many other options to promote its business in new market as well. These options may include personal selling, advertisements, sales promotions and public relations. A combination of these mentioned options is termed as promotional mix (Kotler & Armstrong, 2008). Depending upon the nature of business, promotional mix can be designed by using any of above mentioned four strategies (Hatten, 2011). Organisations can use one or combinations of all four techniques to promote its business as all these promotional tools have pros and cons depending upon the situation (Lamb et al., 2013). Product/service awareness can be increased in target market through advertisements but it has short term impact on target market and heavy expenses are required for advertisement purpose (Hutt & Speh, 2012) therefore, SPSL will continue its current advertisement policy and rely on occasional advertisement and word-to-mouth advertisement due to limited resources.

If target market is interested in product/service and target audience waits for your initiative to peruse them to purchase product/service then these initiatives are termed as sales promotions (CIM, 2009). This approach is useful in those markets in which a company is already serving but it is least effective in new target market. As SPSL is entering in new market and want to capture market share with rapid pace so this approach will not generate desired results immediately. Public relations are useful in building customer awareness but results in least sales (Longenecker et al., 2011). These relations help in those situations when companies want to increase their market share and relations with different people help to generate new referrals for business. This phenomenon can help SPSL in new market to hunt new customers but it cannot help SPSL capture huge market share with rapid pace. According to Kotler & Keller (2007) Personal selling is more effective tool for achieving organisational sales and business growth objectives but it creates less awareness among target market.  Here it is concluded that SPSL has decided to adopt personal selling method as it has decided to employee additional selling force.

3: Relationship Variables and Business Networks

3.1: Role of Relationship Marketing for SPSL

Mathur (2008) stated that in today’s marketing environment, relationship marketing has become more influential trend. He further stated that company today cannot survive until unless they know their customer best which includes their needs, demands and requirements. Relationship marketing is developed with strong bonds with customers providing them information in accordance to their needs, demands and requirements (Ciotti, 2013). Relationship marketing mainly focuses on enhancing customer’s participation in providing useful feedback regarding products/services through word of mouth advertisement and repeat business (Ciotte, 2013). Relationship marketing also increases customer loyalty which is beneficial for any organisation (Mathur, 2008). As it is clear that SPSL’s major advertisement activity is word-of-mouth publicity from its customers so relationship marketing can play a vital role in its business development. According to Brennan et al., (2010) relationship marketing is designed on the basis of relationship variables such as trust, commitment, mutual goals, adaptation, social bonds, performance satisfaction and shared technology. Trust and commitment are most important relationship variables in relationship marketing. Trust is developed with the passage of time through company’s commitment to be ready any time for customer service. These components enhance strong relationship between customer and company which can better be encased by companies in future. As SPSL is entering into a new market so it needs a strong foundation for relationship marketing to survive in the market because already many competitors are serving the market and new entry survival is possible only if customer trust is developed and business is repeated from same customers again and again which is possible through strong implementation of relationship marketing.

3.2: Importance of Business Networks

The concept of business network is to focus as dynamic components of a network range includes the complete insight of suppliers, competitors and whole business environment irrespective to observe firms as isolated entities. Porter (2008) defines competition as a dynamic process where you need close relationship with all stake holders in any business sector. Furthermore, Chetty & Holm (2000) define network as a set of two or more connected business relationship and Hakansson & Ford (2002) divide networks as actor, activities & resources. As a result network of relationship could enhance by exchanging and sharing activities and resource. 

SPLS Company has a strong edge to get sales order by word of mouth referrals because of provision satisfactory services to customers and regular participation in trade shows and putting Adsin local newspapers as advertising strategy. Company should focus on business networks and best services to get sales orders in Manchester. Moreover, the company should have a room to accept and fulfill any new demands from customers. This strategy wins the trust of your customer. Furthers the representative of company can voluntarily offers services in keeping the core business of their company. There is only one way to remain top of your customer’s need a best business relationship back with your business network and timely services, as we analyze in parent location in London. Company can attain top positions by adopting above strategies, at this stage company has acceptance position if company suggests and offers something new for better results of customer.

3.3: Customer Loyalty

Loyal customer normally gives you more business even in your worst times therefore; building customer loyalty has become an integral part of firm’s marketing activities. It has become more important when you are dealing in business to business market and to build customer loyalty, organisations are normally trying relationship marketing as a fixture tool and to ensure the customer repeating purchase behaviour (Mathur, 2008). He further argued that companies can implement several strategies to maintain relationships and to build customer loyalty. Firms can publish newsletters and conduct special meetings and arrangements for personal contacts. In case of SPSL the situation is quite interesting. Company has good reputation in existing market and delivering quality services and total customer satisfaction. 

SPSL can adopt resource based view approach to maintain its relationship and business networks and to ensure customer loyalty in future by adopting customer centric approach as well. Since, the company has developed specialties in certain services therefore by offering standard services on competitiveness prices SPSL can achieve customer loyalty goals through the adaption of technical leadership and innovation. Company’s competitive resources like its technical, skilled and highly committed staff and state of the art secondary plumbing sources will be its competitive sources. The bottom line approach for higher customer loyalty would be the provision of total customer services and customer loyalty programmes. Customer loyalty programmes has been considered the best effective tool for maintaining business relationships. Personalisation approach in the provision of customer service would leave the customer with the sense of personal care as well.

4: SPSL in B2B and B2C Market—Advantages & Disadvantages

4.1: Differences between B2B and B2C Market

Before stepping forward to identify the importance of B2C market for SPSL it is necessary to identify key differences between these two markets which are listed in below table 1.

	B2B	B2C
Primary Dealing	Other Businesses	General Public
Target Customers	Small audience	Large audience
Focus	Relationships	Prodcut/Services
Brand Awareness and Loyalty	Created through personal relationships	Brand positioning and business repetition
Purchase Decision Complexity	Higher due to multi step decision process based on business values	Lower due to single step decision process based on price, quality, status or impulse
Reason for Purchase Decision	Relationship driven purchase decision	Emotional driven purchase decision
Purchase Volume	Higher	Lower
Purchase Frequency	Lower	Higher
Dependence	Educational and awareness building activities	Merchandising and point of purchase activities
Payment Mode	Monthly basis on credit	Cash and credit

Table 1: Differences between B2B and B2C Markets (Source: Huffman, 2010 and McFann, 2007)

4.2: The STP Model for SPSL—B2B vs B2C

STP Model is a strategic tool used by marketers to identify the target audience for company’s products/services (McCabe, 2010). It is necessary for marketers to evaluate the feasibility of company’s products/services with customer needs regardless of the nature of business (McCabe, 2010).

Market segmentation is considered as a potential tool for business growth. Both B2B and B2C markets cannot be segmented on the same grounds because of differences prevailing between both markets. Both markets can be segmented on the basis of demographic factors, psychographic factors, behavioural factors and environmental factors but parameters of these factors will differ in both markets (Demand Metric Blog, 2008). SPSL is already serving in B2B market and has decided to enter into new market on the demographic basis where its previous experience will be fruitful in successful entry. While entering in B2C market in future, SPSL will have to conduct an extensive market research because SPSL cannot go into B2C market with same practices of B2B market due to differences available in both markets.

After dividing the market into different segments it is necessary for companies to select those targets which companies can serve with its available resources as companies cannot target all segments due to limited resources (McCabe, 2010). It is also evident that SPSL is unable to target the whole market due to its limited resources. Moreover, while serving B2C market, SPSL will have to increase its resources because in B2C market, target audience is very larger as compared to B2B market which requires more skilled labour to serve the market.

Geehan (2013) stated that in B2B market current company customers are the best source of brand positioning and it is also clear from case study that current customers of SPSL are promoting the brand of SPSL through word-to-mouth advertisement. While SPSL also uses occasional advertisement for its brand promotion which is working best for SPSL because it’s more than 90 percent customers are referred through word-to-mouth advertisement so SPSL has no need to spend extra for brand positioning in B2B market. Market positioning process is different in B2C market as compared to B2B market. In B2C market, companies have to invest millions to position its products among customers (Geenhan, 2013) and market positioning is developed on the basis of price, quality and product features. So, SPSL has to allocate more financial resources for market positioning as compared to B2B market which will increase company’s expenses.

4.3: Marketing Mix of SPSL—7 P’s of Services Marketing

4.3.1: Price

Pricing strategy is a fundamental element of marketing mix and the factor has significant impact on company’s success in targeted markets (Kotler & Armstrong, 2008). SPSL is working with a bit complex pricing strategy in South London directing towards market premium pricing and is working well for the company due to the provision of unique quality services in the wake of existing competition. The decider factors are company size, numbers of call out, location and length of contract. In new business to business Manchester market, entering with the same pricing strategy would not as effective as it is. For new B2B market company will negotiate with customers to grasp the adequate market share quickly. But in business to consumer market scenario the things will act in a totally different way. The decider factors; market size in B2C market is large enough, market will totally behave differently in number of callouts and length of contract, market will be more diverse geographically and the most importantly the needs and requirements of customer will totally different. Therefore, the company has to restructure its pricing strategy and according to my analysis, SPSL has to go with compatible pricing strategy for business to consumer market.

4.3.2: Product/Services

Company is offering services with excellent customer experience and quick response time. They are offering services of leak repair, leak detection, toilet repair, radiator and general maintenance in B2B market with premium pricing policy. Company is intends to go in B2C market. Company should have initially gone with same services as offering in B2B market but they have to develop these services according to individual customer needs and requirements.  Company’s well trained employees are its competitive edge and they can give satisfactory services to each customer. On the other side company has limited resource to tackle big chunk. Company should have to compete on pricing, because company has only one way to enter in this market, after winning some satisfied clients they can differentiate their services and can increase their profit margin.

4.3.3: Place

Place is a critical element of marketing mix (Kotler & Armstrong, 2008). Marketing expert believes that marketing is getting to the right products, in the right quantity, to the right place at the right time (Kotler & Armstrong, 2008). Currently SPSL is offering services in South London to small and medium enterprises. Clearly the market of B2C is different from B2B in size and needs. Initially, SPLS has to target a smaller chunk of South London based on accessibility and reliability and instead of offering services to the entire market. Furthermore, company has to recruit and train more employees according to B2C market.

4.3.4: Promotions

Promotional campaigns are integral part of any new business growth, because you have not direct tool to attract number of customers instead to adopt some effective and cost cutting promotional activities to offer your services with unique quality and price (Kotler & Armstrong, 2008). SPLS has a unique strength in B2B market and how they deliver their strength to individual to get their service is success of company. Company can adopt paid nom personal communications like television, newspaper, magazine, radio, billboard etc. but it is recommended that company should adopt personal selling strategy.

4.3.5: People

People can be differentiated demographically, location wise, language and on the basis of living standards (Kotler & Armstrong, 2008). Currently, company is getting lots of advantages from its trained and skilled employees, its customer relationship and supplier networks. But, while entering in B2C market SPSL has to rethink and revise its people strategy. Company has to identify its customers and market segment. Furthermore, according to the needs and requirements SPSL has to recruit and train employees for the provision of quality services.

4.3.6: Process

In the realm of services industry, process is intended to achieve certain objectives regarding associated marketing goals (Kotler & Armstrong, 2008). Companies usually have clearly different process in B2B and B2C markets. It is the system of service delivery which will be totally different in B2C market for SPSL. B2C marketing service provision required extra sophistication in skills because normally the structure of plumbing is different from companies’ structure. Furthermore, customer can demand personalized services therefore SPSL has to design process strategies accordingly. But, by replicating the same in B2C market, the company can still yield the advantages from its current process strategy which is delivering quick and timely plumbing services with total customer satisfaction.

Conclusion

It is concluded that while entering into new B2B market, SPSL will select additional sales force to promote its business rapidly and acquire large market share with this tool more than any other business promotional tool. It is also concluded that SPSL may also use other potential business promotion tools if it has rich financial and other useful resources which are required for other business promotion tools.

It is also concluded that relationship marketing plays a vital role in business development in new B2B markets and as SPSL is entering into new B2B market so relationship marketing is essential for SPSL and will provide fruitful results for SPSL. It is also concluded that relationship markets is based on critical relationship variables and most important of those variables are trust and commitment. Moreover, it is concluded that networks will also serve a vital place in successful growth of SPSL in new market as networks help companies to target new market efficiently and also help companies to capture market share rapidly.

It is concluded that many key differences prevail between B2B and B2C markets. So, marketers cannot apply same strategic policies in both markets. As SPSL is already working effectively in B2B market but while entering into B2C market it has to conduct extensive research and redesign its STP model and 7P’s of service which will decide about company’s direction into new market and will prove to be useful in company’s growth.

References

Brennan, R., Canning, L. and McDowell, R., (2010), Business-to-Business Marketing, 2^nd ed. London: SAGE Publications Ltd.

Chetty, S. and Holm, D. B., (2000), Internationalisation of Small to Medium-sized Manufacturing Firms: A Network Approach, International Business Review, 9:1, 77 – 93.

CIM, (2009), How to Achieve an Effective Promotional Mix: 10 Minute Guide, [Report] UK: CIM, 1 – 9.

Ciotti, G., (2013), How Relationship Marketing Builds a Loyal Customer Base | Help Scout, [online] Available at: https://www.helpscout.net/blog/relationship-marketing/ [Accessed: 12 Apr 2014].

Demand Metric Blog., (2008), Target Market Selection Segmentation and Positioning - Demand Metric Blog, [online] Available at: http://blog.demandmetric.com/2008/08/06/target-market-selection-segmentation-and-positioning/ [Accessed: 12 Apr 2014].

Feigenbaum, E., (2014), Types of Sales Force Specialization, [online] Available at: http://smallbusiness.chron.com/types-sales-force-specialization-3122.html [Accessed: 12 Apr 2014].

Geehan, S., (2013), Branding and Positioning in the B2B World - B2B customer strategies | Geehan Group, [online] Available at: http://blog.geehangroup.com/blog/b2b-customer-strategies/branding-and-positioning-in-the-b2b-world [Accessed: 12 Apr 2014].

Hakansson, H. and Ford, D., (2002), How Should Companies Interact in Business Networks? Journal of Business Research, 55, 133 – 139.

Hatten, T. S., (2011), Small Business Management: Entrepreneurship and Beyond, 5^th ed. New York: Cengage Learning, 355.

Huffman, K., (2010), B2C vs B2B Marketing: Do the Differences Really Matter? | THE SOCIAL CMO Blog, [online] Available at: http://www.thesocialcmo.com/blog/2010/10/b2c-vs-b2b-marketing-do-the-differences-really-matter/ [Accessed: 12 Apr 2014].

Hutt, M. D. and Speh, T. W., (2012), Business Marketing Management: B2B, 11^th ed. USA: South-Western Cengage Learning.

Kotler, P. and Armstrong, G., (2008), Principles of Marketing, 12^th ed. New Delhi: Pearson Education India.

Kotler, P. and Keller, L. K., (2007), A Framework for Marketing Management, 3^rd ed. New Delhi: Pearson Education India.

Lamb, C. W., Hair, J. F. and McDaniel, C., (2013), MKTG7, Student ed. USA: South-Western Cengage Learning.

Longenecker, J., Petty, J., Palich, L. and Hoy, F., (2011), Small Business Management: Launching and Growing Entrepreneurial Ventures, 16^th ed. USA: South-Western Cengage Learning.

Mathur, U. C., (2008), Business to Business Marketing, New Delhi: New Age International (Pvt) Ltd.

McCabe, S., (2010), Marketing Communications in Tourism and Hospitality: Concepts, Strategies and Cases, UK: Routledge.

McFann, M., (2007), Marketing to Both Businesses & Consumers | Performance & Hotrod Business, [online] Available at: http://performancebiz.com/article/marketing-both-businesses-consumers [Accessed: 12 Apr 2014].

Porter, M. E., (2008), On Competition, USA: Harvard Business Review.

Zoltners, A. A., Sinha, P. and Lorimer, S. E., (2009), Building a Winning Sales Force: Powerful Strategies for Driving High Performance, New York: AMACOM.

Zoltners, A. A., Sinha, P. and Zoltners, G. A., (2001), The Complete Guide to Accelerating Sale Force Performance, New York: AMACOM.