BUSINESS TO BUSINESS MARKETING AND

SUPPLY CHAIN MANAGEMENT

MODULE LEADER
Dr Nick Ellis

Room KE 606

Office hours: usually Tuesdays 11-1, but please email first

n.ellis@le.ac.uk

0116 223 1816

MODULE AIMS
On completion of this module, students should be able to:

• understand of the characteristics of business/organisational markets

• appreciate the extent to which they differ from consumer markets

• recognise the importance of inter-organisational relationships within industrial

networks

• analyse the key processes involved in supply chain management

• empathise with the roles of the industrial marketing and purchasing managers

The module is designed to raise students' awareness of the significance of B2B

marketing. It aims to re-dress the common imbalance of typical marketing
programmes, which tend to over-emphasise the importance of business-to-consumer
(B2C) marketing. The role of individuals and organisations in the marketing
channels, supply chains and networks which are thought to function to ensure that
consumer demands are met will be discussed. As well as outlining possible
managerial solutions to common B2B marketing dilemmas (such as the design and
delivery of business products and services, the selection of promotional tools and the
challenges of key account management), we will also examine issues such as
relationship marketing, e-commerce, logistics management, supply chain ethics and
fair trade.

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TEACHING METHODS

The module will typically comprise nine 2 hour periods.

For 2010-11, these sessions are timetabled as follows:

Tuesday 9-11, KEB LT2

Thursdays 2-4, KEB LT1

Please the Programme of Study ahead for specific dates.

Each of these nine sessions will normally begin with a lecture element and then a
seminar/tutorial slot. Learning will be facilitated via a series of conventional
lectures, with more detailed discussions of topics taking place in seminars. These
will involve the analysis of a combination of videos, journal articles and mini cases
from a variety of sectors.

Lecture material will be structured around issues raised in the main recommended
textbook and readings. Copies of all lecture slides will be provided, either in Hand-
outs or via Blackboard. In seminar slots students will apply concepts introduced in
the lectures in order to analyse given case studies or their own chosen organisations
and supply chains, where relevant.

You will usually be asked to read a case study or article BEFORE the next session in
order to maximise discussion time in the teaching room – if this is the case it is
essential that you do so or you will (a) not get the most out of the discussion and (b)
be letting your fellow students down. Sometimes we shall be working in groups to
discuss questions, but I will also aim to ask individuals at random to contribute, so
please make sure you have read the relevant material.

If this material is not indicated in the programme of study ahead, or if any last-minute
changes are made, then instructions about what to read will be posted on
Blackboard well before the appropriate session.

TEXTS
The core textbook will be a brand new text that has just been written by the module
leader. This title will be stocked in the library (probably about 10 copies) and by the
University bookshop, both of whom have been advised that it is the core textbook for
this popular module:

• Ellis, N (2011) Business-to-Business Marketing: Relationships,

Networks and Strategies, Oxford: Oxford University Press

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A good source of classic and contemporary B2B journal articles is a 4 volume
reference set held in the library:

• Ellis, N, Tadajewski, M & Pressey, A (eds.) (2011), Business-to-Business

Marketing, Volumes I - IV, London: Sage.

A number of other B2B texts will prove useful to augment your studies, or to do any
pre-module reading, including these two, quite student-friendly, UK books:

Brennan R, Canning L and McDowell R (2007) Business-to-Business Marketing,

London: Sage Publications

Fill, C and Fill KE (2005) Business to Business Marketing, Harlow: FT Prentice

Hall

The above two textbooks are probably the most useful extra ones to you, especially
as they are not too heavily US-orientated in their examples, something which has
been a problem with many of the best-selling tests in the area of B2B. There should
be quite few of each in the library as they have both been core texts for this module
in the past.

Please see the library for a host of other relevant B2B marketing, industrial
marketing, organizational marketing, industrial network, and supply chain
management books and journals, including these titles and publications:

Books:

Anderson, J, Narus, J & Narayandas, D (2009), Business Market Management (3rd

ed), New Jersey: Pearson International
Blythe, J & Zimmerman, A (2005), Business-to-Business Marketing Management,
London, Thomson
Bowersox, D, Closs, D & Cooper, M (2002), Supply Chain Logistics Management,
New York, McGraw Hill
Dwyer, F R & Tanner, J F (2002), Business Marketing, New York, McGraw Hill
Gadde, L-E & Hakansson, H (2001), Supply Network Strategies, Chichester, John
Wiley
Ford, D et al (2006), The Business Marketing Course (2nd ed), Chichester, John
Wiley
Hakansson, H et al (2009), Business in Networks, Chichester, John Wiley
Hutt, M & Speh, T (2002), Business Marketing Management (7th ed), Fort Worth,
Dryden Press
Michel, D et al (2003), Business-to-Business Marketing, Basingstoke, Palgrave
New, S & Westbrook, R (Eds) (2004), Understanding Supply Chains, Oxford, OUP

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Journals:

Focussed (*the 3 titles in italics are the most relevant)

Europe Journal of Purchasing & Supply Management

*Industrial Marketing Management
International Journal of Logistics Management
International Journal of Physical Distribution & Logistics Management
International Review of Retail, Distribution & Consumer Research
*Journal of Business & Industrial Marketing
*Journal of Business to Business Marketing
Journal of Business Logistics
Journal of Business Market Management
Journal of Supply Chain Management
Journal of Purchasing & Materials Management
Supply Chain Management
The IMP Journal

General

Administrative Science Quarterly

Academy of Management Review
British Journal of Management
European Journal of Marketing
Global Networks
Harvard Business Review
Journal of Academy of Marketing Science
Journal of Business Research
Journal of Macromarketing
Journal of Management Studies
Journal of Marketing
Journal of Marketing Management
Journal of Marketing Research
Journal of Personal Selling & Sales Management
Journal of Strategic Marketing
Marketing Theory
Organization
Organization Studies
Scandinavian Journal of Management
The Marketing Review
The Service Industries Journal

Readings:
If they are not available in the core text, then other readings will be provided for
seminar work, as well as lists of further readings.

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ASSESSMENT

B2B Marketing & SCM Assignment 2010-11

Case study: Managing the trade marketing relationships of ‘Texfin’

The importance of B2B marketing by manufacturers to channel intermediaries is

often discussed in relation to the FMCG arena where powerful supplier brands
abound. This case looks at a rather different situation: that of decorating supplies,
where the influence of product branding on channel relations may not be so great.
The case illustrates some of the choices facing suppliers trying to facilitate closer
relationships with downstream organizations in the marketing channel. (Remember:
the meaning of ‘trade marketing’ here is that carried out by manufacturers to channel
intermediaries, or ‘the trade’.)

The focal firm of this study, hereafter known as ‘Texfin’, sells a range of gypsum-
based products including textured finishes for walls and ceilings. (Gypsum is a soft
white or yellowish mineral used in the manufacture of plaster products.) The firm
distributes its goods across the UK to over 3,500 organizational customers within
‘the trade’. Texfin has a projected annual turnover of £30 million and over 200
employees.

The firm’s customer base comprises three sectors: retailers, builders’ merchants and
decorators’ merchants. While the largest number of customers is to be found in the
builders’ merchant segment, the increasing size and buying power of the retail
multiples has resulted in a ‘Pareto’ situation with 80% of Texfin’s turnover generated
by approximately 20% of their customer base. One particular retailer, known as
‘Alphastore’, now accounts for 36% of annual turnover. Although brand awareness
amongst end user consumers for Texfin’s core product is high (thanks to decades of
support from the construction sector), textured finishes are perceived as rather old
fashioned. In fact, they were described as ‘commodity items’ by a buyer at
Alphastore. To make matters worse, senior management at Texfin had become
aware of two large European manufacturers’ plans to enter the UK market. They
were thus keen to add value to their market offering.

So how might Texfin do this? The firm’s managers consulted staff at a local
university who pointed out that academic research into trade marketing and supply
chains suggests customer service is becoming crucial, especially when linked to the
idea of ‘availability’. This means that if the desired brand is not present on the
intermediaries’ shelves, the end user customer will simply purchase the nearest
alternative: thus logistics management is an important issue for manufacturers.
Indeed, it is thought that efficient logistics systems can produce good service levels,
which in turn affect the manufacturer’s leverage with the customer (trade) and the
consumer (end user) stakeholders. A further area that the university recommended
Texfin to consider was that of partnership development via relationship marketing
(RM) in order to build organizational customer loyalty through activities like
exchanging data. Moreover, Texfin wanted to know if branding and promotion had a
role to play in the effectiveness of their channel management strategies.

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Market research was therefore commissioned by Texfin’s marketing team. This
included an initial phase of interviews to establish the relevance of some of the
above theoretical issues to the context (this revealed an extra issue, that of the role
of sales representatives). The second phase of the study involved a questionnaire
being sent to 1,200 organizations. This contained a series of ratings scales to
measure respondents’ attitudes to the importance of a number of different trade
marketing issues. Although the response rate was rather low (76 usable replies),
this is not uncommon in industrial marketing surveys. The key results are listed
below in descending order of importance. Issues were classified by Texfin’s
marketing manager according to which area of trade marketing effectiveness they
seemed to refer:

Rank Issue Classification

1 order completeness logistics service
2 on time delivery logistics service
3 sales rep’s product knowledge sales management
4 ease of placing orders logistics service
5 frequency of sales rep’s visits sales management
6 marketing brands to end users branding
7 training of trade staff by supplier RM
8 sharing of market data RM
9 offer of customised promotions RM
10 innovative packaging branding
11 product quality product
12 rate of NPD product

Although these scores were fairly uniform across the sample, there were also some
differences between customer segments. For instance, merchants seemed to
identify with a historical need to see their sales representatives on a weekly basis.
As one builders’ merchant said, ‘We rely on good manufacturer sales support to
keep our staff abreast of what’s happening in their specific sector’. Moreover, RM
was much more important to retailers: one of Texfin’s own account managers
admitted, ‘It’s almost becoming embarrassing. The multiples (i.e. retail groups) know
more about market movements and the performance of my products than I do’.

Texfin’s senior management pondered the research that their marketing department
had commissioned. It struck them that, while the findings of the survey suggested
that superior levels of logistics service may offer Texfin the opportunity to gain
competitive advantage, if other manufacturers also ‘raised their game’ in this area,
then this would cease to be a determining factor in the trade’s evaluation of
manufacturers. It was also likely that the sector would see a growth in RM practices,
especially if retail multiples were to exert their influence as ‘market drivers’. This
could mean a decline in the importance of local sales reps and an increased use of
centralised head office buying by the trade. Careful decisions were clearly going to
have to be made about where to invest the firm’s B2B marketing budget in the
coming years.

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Assignment brief:
You are required to write a structured essay (i.e. with subheadings, and fully
supported by references) of 3,000 words (+/- 10%) that addresses the following
questions.
NB essays that exceed the word limit may be penalised at the discretion of the
marker - this will typically involve a 5 mark reduction for essays over 3,300 words,
and a 10 mark reduction for those over 3,600.
1. What were the key findings of the market research in terms of the
overall relative importance of the issues affecting B2B trade marketing
in Texfin’s sector? (20% of the total marks)
2. Drawing upon the case findings, as well as your own knowledge of B2B
marketing and SCM, what actions would you recommend to Texfin’s
senior management? (60% of the marks)
3. What are the implications of this study for how we understand
manufacturer/retailer IORs in general? (For instance, think of how
Texfin’s sector compares to other sectors where the balance of power
between supplier and distributor might be different). (20% of the marks)

Notes & Advice

1. You will be expected to relate marketing and supply chain management theory
from the module to the case material, and make appropriate recommendations,
thus showing an understanding of B2B marketing principles and practice.

2. As you can see, although the question topics are reasonably discrete, each of
them can draw upon theoretical material from more than one session – so think
carefully about which sessions you will need to return to and research in greater
depth in order to be able to provide a good answer.

3. If you read and prepare answers for all the end-of-chapter case studies before
each lecture session, you should be able to apply some of the analytical
processes and strategic thinking that you go through for these cases to your
assignment question too. Don’t forget to check Blackboard to see if your
approach to the case questions corresponds to the suggestions that I put there
after each session.

4. Although it makes sense to look for concepts and authors discussed in your core
module text that you can apply to the assignment, you will be expected to draw
upon library readings (e.g. academic and trade journals) beyond your main
textbook (i.e. Ellis 2011) to support your answer.

5. This means that if you make a point about something that the case firm should
consider, it should be backed up with a citation from a good reference that shows
how prior research suggests that your point is valid one.

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6. Students who do this intelligently, and from a broad a range of (ideally academic)
sources as possible, will have the opportunity to gain a high mark, rather than just
passing the module with a C grade.

7. The submission date will be Monday 9th May 2011 (for full details of how to
submit, please wait to hear from the FT Office).

8. By ‘structured essay’ we mean a discursive essay rather than a report, but one
that is divided into a few key sections. For example: an Introduction and
intervening sections of Discussion or Analysis that correspond to the assignment
question, and which have separate sub-sections or paragraphs devoted to key
topics, perhaps with supporting diagrams or data where relevant.

9. In the Introduction, you should set out your main themes and intentions: describe
the issue you are addressing, identify its main components, and indicate what
you are going to do in the body of your essay.

10. Break down your arguments into smaller parts - use this as a basis for the main
Discussion part of your essay that will then be divided up into several sections or
paragraphs (you may want to have a sub-heading title for each section of the
question).

11. Summarise your arguments briefly in a Conclusion. What is the main significance
and implications of what you have been saying?

12. Make sure you read your Programme Handbook carefully on issues of
submission, deadlines, essay writing, referencing and plagiarism.

13. ALL material that you use should be referenced appropriately. This includes any
material borrowed from websites or corporate brochures. Information on
referencing is available in your Programme Handbook.

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PROGRAMME OF STUDY
Date Session Lecture Topic Reading Seminar Study
Guide* Topics/Activities Materials**
Thu 1 The Significance of Ellis Main Case Study Read the
3/3 B2B Marketing Chap 1 Ch 1 W Perks
2.00- (if we have time) machinery case
4.00 (no prep needed)

Tue 2 Organisational Ellis Main Case Study Read the

8/3 Buying Behaviour Chap 2 Ch 2 Danurex
9.00- packaging case
11.00

Thu 3 Inter-Organizational Ellis Video: Supplier Read the

10/3 Relationships Chap 3 Relationships Pt 1 Branston
2.00- plus Main Case potatoes case
4.00 Study Chap 3

Tue 4 Marketing Ellis Video: Supplier Read the

15/3 Channels & Supply Chap 4 Relationships Pt 2 Dongfeng
9.00- Chains plus Main Case trucks case
11.00 Study Chap 4

Thu 5 Industrial Networks Ellis Main Case Study Read the

17/3 Chap 5 Ch 5 Shell
2.00- oil case
4.00

Tue 6 B2B Planning & Ellis Main Case Study Read the
22/3 Strategy Chaps 6&7 Ch 6 KMS
9.00- software case
11.00

Thu 7 Business Products Ellis Video: JCB Case Read the

24/3 & Services Chaps 8&9 Study PNG
2.00- plus Main Case coffee case
4.00 Study Chap 8

Tue 8 Value & Pricing in Ellis Main Case Study Read the
29/3 Business Markets Chap 10 Ch 10 Abbey
9.00- steel case
11.00

Thu 9 Marketing Ellis Main Case Study Read the

31/3 Communications & Chaps Ch 11 Re-Sourceful
2.00- Personal Selling 11 & 12 promotions case
4.00

* The Reading Guide is exactly that: you are advised to read these chapters, or other
recommended texts, in order to support the lecture material, but it is not compulsory.

** The Study Material for the seminars, however, you must try to read in advance of
each session (apart from Session 1) - even if we run out of time in the following
session to discuss the cases in detail, outline answers will be put on Blackboard.

PTO for an overview of the chapter structure of the core textbook

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