Full file at Solution-Manual-for-Business-to-Business-Marketing-IM
Case Studies to accompany
Business-to-Business Marketing: Analysis and Practice
By Robert P. Vitale, Joseph J. Giglierano, and Waldemar Pfoertsch
Authors’ Comments
It probably comes as no surprise to many instructors that using case studies, particularly in undergraduate courses, is more of a challenge than it once was. Notwithstanding this, we continue to believe that case studies that present real-world situations for student analysis and discussion are an excellent instructional tool.
We do not necessarily subscribe to what may be known as “standard operating procedure” in case analysis. Too often, when a student completes a first reading of a case they jump to what they think is an obvious answer. When this is combined with a web search of the principle companies and markets discussed in the case, the student analysis becomes a regurgitation of first impressions mixed with search results. In light of this, we believe that a good case is a case that can’t be ‘solved” with a web search, that presents instructive situations, is of reasonable interest to students, and if possible, doesn’t have a “standard’ solution. With this framework in mind, here are our considerations in the application of case studies in business-to-business marketing.
Consumer Perspective of Students
It is very difficult, at least initially, for students to view circumstances as other than the ultimate consumer. Not only is there difficulty breaking away from the mindset of being “the target,” many companies and channel designs are just unknown to students. To get in the “middle of a case, a cultural shift is often necessary. Reinforcement of the buying center concept is critical to recognizing that the business-to-business buying process is a collaborative effort with many external and internal stakeholders to satisfy.
We also find that we must remind students (particularly here in Silicon Valley), that the ultimate solution is not always a web site.
The “Newness” Of The Case
We continue to hear from many of our case-oriented colleagues of the difficulty finding appropriate new cases for business-to-business marketing. We tend to believe that the value of a teaching case is not always limited by its age. Principles of good marketing haven’t changed, though the business environment evolves, often requiring different recommended actions in a market. A business situation that is not current often cannot be “googled” for the correct answer.
Note: This is not to say we don’t see value in current business situations. Throughout the semester we seek current business items to reinforce classroom theory. The Wall Street Journal is a particularly good source, and students appreciate its online version.
With regard to older cases, here is a list of some that we have found usefulyou will likely recognize some of them.
- Dominion Motors and Controls
This is an excellent case to demonstrate the influence of external stakeholders and the impact of standards organizations on product development. You can also use this to show that 10 years in a market should not be the same as one year 10 times!
- Titan Controls
- Huntington Electronics
Presents an opportunity to demonstrate how R&D can lead to business diversification.
- Steel Products Company
Short case about “what business are we in and what value do we create.”
- Omni Automated Systems
Though one of the more difficult to use today, this case presents differing views of sales cultures–glad-handing versus value creation.
- Sealed Air
Timeless in many ways, this case demonstrates international segmentation, value from customer perspective, and life cycle issues. Students call this the bubble case–“how big is your bubble?”
Author’s Solution Is Not The Only Solution
Your experiences may provide a different perspective than that of the author’s. You may want to emphasize different aspects of the case. An older case may have an entirely different solution in today’s business environment than what the author envisioned. While we certainly have attempted to provide good teaching notes with the cases presented, you may have another view.
Technology versus Purses and Shoes
Students can find the somewhat technical nature of many business-to-business cases intimidating. A student once remarked “can’t we have cases about things we know about, like purses and shoes instead of chemicals and motors?”
To help defer this bias, reinforce the value aspect and solution potential of the product/offering rather than the technology that makes it valuable.
Example: Ask students to consider a hypothetical customer that wants a box that “when you kick it, it yells.” The customer specifies how hard it must be kicked before it yells, how “big” of a kick it must withstand, how fast it must yell after kicked, how loud, what pitch ... and so on. The customer doesn’t specify the technology that creates the yellit can be a sophisticated motion sensor/electronic amplifier or a trained gerbil yelling into a megaphone (usually brings a good chuckle).
Teaching Notes Included in This Manual
A full discussion is provided for each case in the textbook. Below is a summary of the topics and issues that can be addressed with each case. Note that, as mentioned above, you may have different learning points or may use a case in an entirely different manner than we anticipate. If you are particularly successful with a unique approach, let us know!
LastMile Corporation–Choosing a Development Partner
Issues:Crossing the Chasm
Protecting Intellectual propertytechnology
Creating a successful joint venture, value network, or partnership
B2B e-commerce in China: the Strength of Alibaba.com
Issues:Strategic plan implementation throughout an organization
Recognizing differences between domestic and international markets
Government influence in emerging markets
Competitive branding in emerging markets
Dow Corning Success in China
Issues:Business to Business branding
Different brand positioning based on dual market segments
Protecting a premium brand position
Marketing Plastic Resins: BW and GE
Issues:Marketing channel design changes over the product life cycle
Competitive advantage through field market development and customer education
Different market segments may require a very different channel design to meet customer needs of form, time, place, and possession–Dual distribution
Different organizations can see the same market differently when viewed through their own culture and paradigm.
Note: This case, when combined with Automotive Headlamps II and Makrolon: The High-Tech Material combine to demonstrate
- The different views competitors can have of their markets
- Changing channels and customer value over the Product Life Cycle
- Managing (or leaving) business at the mature stage of the life cycle
- Strategic Business Unit management over the PLC
Automotive Headlamps II (Revised for academic clarity)
Issues: Disruptive versus incremental innovation
How innovation is viewed differently by different stakeholders
How Marketing Myopia prevented a major supplier from understanding customer needs
Difference between market share leadership and Market Ownership
“If you don’t innovate your own offering, someone else will.”
Note: This case, when combined with Marketing Plastic Resins: BW vs. GE and Makrolon: The High-Tech Material combine to demonstrate
- The different views competitors can have of their markets
- Changing channels and customer value over the Product Life Cycle
- Managing (or leaving) business at the mature stage of the life cycle
- Strategic Business Unit management over the PLC
Makrolon: The High-Tech Material
Issues:Ingredient branding in the consumer market of a mature industrial product
Branding a product without major differentiated attributes that were available from several sources
Product management in the mature stage of the PLC
Note: This case, when combined with Automotive Headlamps II and Marketing Plastic Resins: BW vs. GE combine to demonstrate
- The different views competitors can have of their markets
- Changing channels and customer value over the Product Life Cycle
- Managing (or leaving) business at the mature stage of the life cycle
- Strategic Business Unit management over the PLC
Sensacon, Incorporated
This is the capstone case for the book, combining many elements from many chapters.
Teaching notes follow in the same order as listed above.
Case Notes: LastMile Corporation
Synopsis
The founder of LastMile Corporation, Tom Sherman, is pondering how to bring new products to market under conditions of scarce resources for development and launch. The company has proposals from two entities: Midwest Technologies, a major diversified technology company; and ANZ Investment Group, a venture capital investor. Both are potentially attractive suitors. Their initial offers were not entirely appealing. Sherman must decide how he wants to proceed with an attempt to forge a strategic partnership.
Case Questions
What are the other alternatives that LastMile could look at that would create a working relationship between Midwest Technologies and LastMile?
There is a range of possibilities for working with large partner, rather than licensing the technology to them. LastMile could arrange a contract to provide finished product to Midwest, on an OEM basis. Another alternative would be for LastMile to provide product components to Midwest, who would use the components within their own finished products. A third alternative would be to license the technology, but to obtain financing from Midwest to fund the development and engineering of the products. If control over the technology and the market direction are important issues, a joint venture may be appropriate. A joint venture provides each party with an opportunity to limit risk to specific assets (Midwest–money and market access, LastMile–technology) while exploiting the strengths of the combination. An extreme alternative would be for LastMile to become acquired by Midwest, which would provide funding for product development in-house.
What are the advantages and disadvantages of these alternatives?
The advantages and disadvantages of the licensing-only option are spelled out in the case. So, too, are the advantages and disadvantages of receiving funding from ANZ.
OEM Contract
For the OEMcontract, the advantages are that LastMile would retain the rights to the technology and would have the opportunity to develop the technology and products based on it into the future. LastMile could also market the products to other companies in the market or in related markets. The disadvantages are that development financing would be restricted. They could probably secure venture funding based on having the contract with Midwest. However, this would probably be very expensive money, requiring short- to mid-term payback and at the cost of a significant portion of the company. Also, whether they build finished products or components, LastMile will have to outsource their manufacturing to be able to meet the needs of Midwest. This may drive costs above an acceptable level.
Licensing
With development funding from Midwest, licensing has some attraction to it. LastMile would get the funding needed to “productize” the technology. However, the funding would not extend to marketing and may indeed have covenants requiring exclusivity in the partnership. LastMile would retain ownership of the technology, but would have limited growth potential.
Joint Venture
If a joint venture is considered, LastMile should recognize the need to continue to push the technology envelope independent of the venture. Unless the venture could produce the cash to make this possible, this has some of the same financing difficulties as other alternatives.
Acquisition
In an acquisition, LastMile would lose a good measure of control over the direction of the technology. However, the money obtained would be substantial and a degree of autonomy for the LastMile organization might be built into the arrangement. The upside potential of LastMile would be subsumed within Midwest. Also, the profit stream would substantially go to Midwest, to be used as Midwest management saw fit. Lastly, both organizations would need to think about the problems in melding two distinctly different cultures. Midwest management will see LastMile as being too loose; LastMile will see Midwest as bureaucratic.
What are the objectives that LastMile would like to accomplish out of such a partnership?
LastMile is looking to grow fairly rapidly. To be a player in this emerging market, they will need to achieve a larger size than they are now.
LastMile needs to acquire access to markets. The marketing resources of a large organization are thus attractive.
To continue to develop new technology, a degree of stability is probably a desirable state to achieve.
The people of LastMile would appear to be interested in continuing to develop the technology and develop it to its fullest potential. It’s “their baby.”
LastMile has some longevity already. Tom Sherman probably has a bond with his employees. It is likely that one important objective for him will be to “take care of his people.” This means financial advancement for them, stability and probably retention of as much of the culture as he can manage.
What counter proposal(s) would you recommend?
This will depend on the students’ weighing of the alternatives. They will need to think about the intangibles in the various advantages and disadvantages and find a way to make tradeoffs.
What Happened?
In reality, the real company represented by Midwest in this fictitious case acquired the company that was the model used for LastMile. This occurred in 2000. Even though the acquisition limited the upside potential for the principals of LastMile, they probably did OK, given the technology stock collapse that occurred shortly thereafter.
CASE NOTES: B2B E-COMMERCE IN CHINA: THE STRENGTH OF ALIBABA.COM
Synopsis
In 2007, Alibaba.com had its initial public offering (IPO) at the Hong Kong Stock Exchange. The company raised 1.33 billion HKD, the second largest investment offering since the IPO of Google. High hopes from the investment community have pushed the stock-price even higher since then. Alibaba’s market presence has changed the competitive landscape in China, and the leadership style of Alibaba’s founder Jack Ma sheds light on the challenges and opportunities of China’s e-commerce market. Jack Ma is preparing to further expand his company’s offerings in China and abroad. The question is whether such an ambitious expansion could be continued with existing strategy.
Suggested Assignment Questions
- Does the “bird cage” theory, when applied to China’s Internet policy, constitute a serious threat to the development of the B2B e-commerce industry?
- What is the focus of Alibaba’s business and what makes it so different from some US e-commerce companies?
- Would Alibaba have been as successful today without the leadership of someone like Jack Ma?
- What are the benefits of the cooperation with China Post?
- What are the current and future benefits of the cooperation with Yahoo?
- Is there room for Alibaba in the global race for online supremacy? What would you do to secure the futureof the company?
Teaching Objectives
The case is suitable for MBA-level or advanced undergraduate courses on marketing strategy and communication. It has been used successfully in executive training courses devoted to business-to-business marketing. Finally, instructors will find the case useful for illustrating the opportunities and challenges found in the Chinese market of the past few years, when business structures and legal frameworks were changing rapidly, and market dynamics were hard to predict.
Specific teaching objectives include:
To establish the importance of developing an integrated marketing plan, one that takes into consideration the company’s overall strategic vision, leadership situation, specific market situation, company’s offering and dynamics of the domestic and international market.
To explore the challenges associated with emerging markets and new technologies. This includes challenges associated with building a portfolio of brands, managing cooperation and fighting competitive forces.
To demonstrate the differences between mature and emerging market environments and government influences. The case gives the opportunities to specifically look into the Chinese development of the last 10 years and to draw conclusions for other ventures.
To illustrate the competitive challenges foreign companies are facing in non-open market investments and the opportunities for local business.
This teaching note has five sections. The first section provides an overview of the China e-commerce market; the following sections concentrate on company analysis.
Situation Analysis
Business Environment:
In the last 35 years, China has undergone dramatic economic and technological changes. Its political leaders are committed to the goal of catching up and achieving a leading position in the near future. Since many industries are protected by government regulations, foreign companies only have the chance to cater to the Chinese market with local partners. Since China’s entry into the World Trade Organization (WTO) in 2001, various measures have been taken to open up the country to international competition.
With its 1.3 billion people and huge differences of economic wealth in the various areas of the country, the Internet is an important tool for the liberation from geographical constraints within and outside China. Since government institutions seem unsuited to foster technological and entrepreneurialdevelopment, private enterprises play an important role in the development of technology and its commercialization. With the emergence of the export- oriented economy in China, e-commerce has become an important business tool for the export-oriented Chinese business community. It has also opened doors for foreigners wishing to participate. Chinese companies’ advantages are based on low cost labor, low capital cost, and rudimentaryenvironmental regulations.
Internet technology is a good example of how quickly and efficiently technology adoption occurs in China. Despite its initially rudimentary telecommunication network system and its short history, China has been quick to embrace e-commerce, enabling phenomenal growth in the sector. The best example of this would be Alibaba, which has experienced unprecedented success under the leadership of Jack Ma. The company has positioned itself as champion of e-commerce in the business-to-business sector in China.