Marketing communication in a B2B market - DiVA portal

J?NK?PING INTERNATIONAL BUSINESS SCHOOL

J?NK?PING UNIVERSITY

Marketing communication in a B2B market

- a case study of the store interior industry

Paper within Business Administration

Author: HALLIN IDA

JOHANSSON MARIA

LARSSON CAMILLA

Tutor:

Anette Johansson

Elena Raviola

J?nk?ping December 2006

Bachelor Thesis within Business Administration

Title:

Marketing communication in a B2B market

? a case study of the store interior industry

Author:

HALLIN IDA

JOHANSSON MARIA

LARSSON CAMILLA

Tutor:

Anette Johansson

Elena Raviola

Date:

2006-12-12

Subject terms:

Marketing communication, marketing tools, B2B markets, brand awareness.

Background:

Today firms are facing increased global competition, and it results in shorter product life cycles. The present situation demand firms to focus more on marketing and how to communicate with the customers. In the marketing field there has always existed a perceived dichotomy between B2B and B2C markets. It is said that B2B markets must be handled differently than B2C markets. Recently the perceptions have changed and it is said that B2B and B2C markets have more similarities than previously assumed, and this might affect the decision about which marketing tools to implement. This could even change the old way of thinking, which states that B2C marketing tools cannot be used effectively in a B2B market. Theories show that brand awareness is of crucial importance in B2C markets. Will the change of market structure make brand awareness equally important in a B2B market?

Purpose:

The purpose of this thesis is to critically analyze the attitudes towards different B2B marketing tools and the possible appropriateness of using B2C marketing tools in a B2B market in order to achieve brand awareness.

Method:

A qualitative approach has been used in order answer the purpose of the thesis. ROL AB has been used as a case study, and 13 open phone interviews have been conducted with existing and potential customers of ROL AB. Furthermore, two interviews have been conducted with firms that successfully use B2C marketing tools in B2B markets.

Conclusions:

The typical characteristics of B2B markets show a tendency to blur. This insinuates that brands are gaining importance in the B2B market. In order to react to this change, B2B firms need to increase their brand awareness. The traditional relational (B2B) marketing tools seems no longer to be sufficient to be used alone but now need to be accompanied with transactional (B2C) marketing tools.

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Table of Contents

1 Introduction............................................................................... 1

1.1 Background ............................................................................................1 1.2 Problem discussion ................................................................................1 1.2.1 Problem specification .............................................................................2 1.3 Purpose ..................................................................................................2 1.4 Delimitation.............................................................................................3 1.5 Definitions...............................................................................................3 1.6 Disposition..............................................................................................3

2 Theoretical Framework............................................................. 5

2.1 Principal B2B market theory ...................................................................5 2.1.1 B2B marketing........................................................................................6 2.1.2 Business buying behavior process .........................................................6 2.2 Branding .................................................................................................7 2.2.1 Brand equity ...........................................................................................8 2.2.2 Brand awareness....................................................................................8 2.2.3 B2B branding..........................................................................................9 2.3 Marketing communication.....................................................................10 2.3.1 Transaction marketing ..........................................................................11 2.3.2 Relational marketing.............................................................................11

2.3.2.1 Database marketing......................................................................................................12 2.3.2.2 Interaction marketing ....................................................................................................13 2.3.2.3 Network marketing ........................................................................................................14

2.4 Research questions..............................................................................15

3 Methodology ........................................................................... 16

3.1 Research methods ...............................................................................16 3.1.1 Conditions for choosing method ...........................................................16

3.1.1.1 The course of action .....................................................................................................16 3.1.1.2 Problem statement........................................................................................................16 3.1.1.3 Prerequisites and resources .........................................................................................17

3.1.2 Quantitative vs. Qualitative...................................................................17

3.1.2.1 Method chosen .............................................................................................................17

3.2 Case study ...........................................................................................18 3.3 Interview selection ................................................................................18 3.4 Data collection......................................................................................19 3.4.1 Primary data .........................................................................................19 3.4.2 Secondary data ....................................................................................20 3.5 Data Analyzing .....................................................................................20 3.5.1 Validity and reliability ............................................................................20

4 Empirical Findings.................................................................. 22

4.1 Case study- ROL AB ............................................................................22 4.1.1 The company........................................................................................22 4.1.2 Customers ............................................................................................23

4.1.2.1 Process for customer firms ...........................................................................................23

4.1.3 ROL AB's current situation ...................................................................24

4.1.3.1 ROL AB's current marketing strategy ...........................................................................24 4.1.3.2 Mr. Kron's personal reflections .....................................................................................25

4.2 Interview with existing customers .........................................................26

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4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.3 4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 4.3.7 4.3.8 4.4 4.4.1 4.4.2

Abecita .................................................................................................26 Design House Stockholm .....................................................................27 Philip Morris..........................................................................................28 Posten ..................................................................................................30 Systembolaget......................................................................................31 Interview with potential customers........................................................32 Company A...........................................................................................32 Company B...........................................................................................33 Company C ..........................................................................................34 Duracell ................................................................................................35 Gina Tricot............................................................................................36 Hemtex AB ...........................................................................................37 Zeta ......................................................................................................38 ?hl?ns AB.............................................................................................39 Firms operating in a B2B market using B2C tools ................................41 Ahlsell...................................................................................................41 Ramirent ...............................................................................................42

5 Analysis ................................................................................... 45

5.1 Why is there a dichotomy between B2B and B2C markets? ................45 5.2 How is brand awareness affecting B2B and B2C markets? .................48 5.3 Which marketing tools are preferable in a B2B market?.......................51 5.3.1 Relational Marketing.............................................................................51 5.3.2 Transactional marketing .......................................................................54

6 Conclusion .............................................................................. 56

6.1 Suggestions for ROL AB ......................................................................56

7 Discussion............................................................................... 59

7.1 Limitations ............................................................................................59 7.2 Suggestions for further studies.............................................................59

References ................................................................................... 60

Appendices

Appendix 1 Interview guide for existing/potential customers. Appendix 2 Interview guide for B2B firms that use B2C marketing tools. Appendix 3 The ROL process for partners. Appendix 4 Approval of interview with Monica Gustafsson, Philip Morris

Figures

Figure 2.1 - Theoretical Framework ....................................................................5 Figure 2.2 - The value of brand awareness (Aaker, 1991, p.63) .........................9 Figure 3.1 - Degrees of structure in interview (Jacobsen, 2002) .......................19 Figure 3.2 - Data analyzing ...............................................................................20 Figure 4.1 - ROL AB's customer segments (ROL group, 2006d) ......................23

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1 Introduction

This section has the purpose to give the reader an introduction to the subject in matter. Further, the first chapter contains the background and problem discussion that will introduce previous and contemporary research within the field of B2B markets and marketing. The chapter will proceed with a problem specification resulting in the purpose of the study.

1.1 Background

In early history it might have been enough with innovative products, great engineering, or great salesmanship solely to close a business deal. However, today's firms are facing a different situation with shorter product life cycles and the intensity of global competition, which no longer provides the luxury of "build it and they will come" thinking. Therefore, in the present day situation firms need to focus more on marketing, and how to communicate with the customers. (Olivia, n.d.)

Within the marketing field there has always existed a perceived dichotomy between Business-to-Business (B2B) and Business-to-Consumer (B2C) markets. This is a general perception in the theory of marketing. The aspects that differ between B2B markets and B2C markets according to Coviello and Brodie (2001) are the influences, buyer decision processes, and buyer-seller relationships.

It is said that B2B markets must be handled differently than B2C markets because of their uniqueness due to a derived demand, long purchase cycles, and a market structure that is shifting and fragmented (Lilien, 1987). A distinction is made on B2B marketing by concentrating on the attributes of product complexity, and buying process complexity (Webster, 1978). This is also supported by H?kansson and Snehota (1995) who adds to the assumption of the dichotomy by claiming that B2B marketing is driven by relationships, which are to be considered different from those in B2C markets. This is supposedly due to a continuity, complexity, symmetry, and informality of the relationship (Coviello and Brodie, 2001).

Although, the question stands: Is there in fact a difference between B2B and B2C markets and why do firms need to separate the marketing approaches towards the two? Are the previous recognized differences between B2C and B2B marketing practices just a historical artifact rather than a current reality? (Coviello, Brodie, Danaher and Johnston, 2002)

1.2 Problem discussion

Even though there are some differences between B2B and B2C markets, the process of making a purchase seem to be the same in both markets. The process starts with gathering information about alternatives, processing that information, followed by learning about available products and determining which alternative matches the perceived needs most closely. Finally, the process ends by the action of purchasing. (Brown and Fern, 1984) Thus, it is said that the complexity of the decision itself makes a difference no matter what kind of environment a purchaser is in.

Wilson (2000) asks "Why should we assume that separate theories are necessary to explain the exchange behavior adopted by the same individual when placed in different contexts?" (p.780?781). People in a business environment are not suddenly transformed from a human being into a robot

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