B2B Marketing 4
BUSINESSTO BUSINESS MARKETING AND SUPPLY CHAIN MANAGEMENT
Business-to-BusinessMarketing and Supply Chain Management
Anyorganizations` activities fail to live to their expectations withouthaving relationships with their surrounding environment. Anorganization`s performance and survival depend on the kind ofrelationship with other organizations. Modern enterprises haveattached more importance and familiarity to the inter-organizationalrelationships and the management (Mathur, 2008, p. 16). To recognize,analyze, and promote the inter-organizational relationships are keyand prerequisite for businesses to acquire resources, knowledge, andcontinuous competitive advantage they require.
Scholarshave applied strategy, economics, sociology, Organizational Behavior,and Game Theory to study and understand the inter-organizationalrelationships embedded from business to business. Theinter-organizational relationships between organizations also engagein business-to-business marketing. B2B marketing refers to the kindof situation where one business organization engages in a commercialtransaction with another business organization. B2B marketing thusrefers to a situation where one business sells goods or services to adifferent business as opposed to the same business selling its goodsand services to a customer.
Forsmooth running or B2B marketing in respect to inter-organizationalrelationships, there has to be trust and mutuality. Trust firstemerges as an essential topic because it perceives the creation of amore conducive atmosphere of collaborating between organizationswhile raising commitment of the partners. However, there is acritical surrounding environment regarding trust contentment.Mutuality, on the other hand, is perceived to be important. Theperception to have a common ground and a certain level of commitmentto have a common goal clearly proves to be important in largeorganizations (Ellis, 2010, p. 10). A committed top management inlarge firms additionally acts as the ambassadors for the allied goaland disseminates crucial information that would enhanceinter-organizational relationships. The paper, therefore, will focuson the reasons as to why trust and mutuality are crucial elements ofthe inter-organizational relationships (IQRs). The paper will drawrelevance from some of the academic theories in support of theargument while using a relevant example from a chosen organization.Additionally, the argument will be related to the B2B marketing ininter-organizational relationships and supply chain managementtheory.
Connotationsand Features of Inter-Organizational Relationships
Connotations:According to Mathur (2008, p. 17), comparisons of the currentdefinition of inter-organizational relationships, there is different,but have similarity on keywords such as transaction, interaction,social relations, and persistence. Therefore, inter-organizationalrelationships that are embedded in B2B marketing are defined as therepeated interactions and process of exchange between businesses andother organizations. The relationships also have a set of series ofsustainable business connections.
Ellis(2010, p. 35) observed that inter-organizational relationship isconsidered a continuous process. If there is no continuation of therelationship, the network will not have the distinguishingcharacteristics of the market and its B2B marketing. Time is also arelated factor. The past and the future expectations that are relatedto the inter-organizational relationships influence the currentstate. For an effective state of the relationship, time is animportant factor.
Features:The first feature is mutuality. It refers to the intrinsiccharacteristic associated with inter-organizational relationships.The relationship may continue regardless of the low level ofmutuality due to the different kinds of business marketing. Thebonds, which include technical, planning, economic, knowledge, andsocial bonds, result in inter-organizations correlations while therelationships are continual.
Trust:It is an important feature of inter-organizational relationships. Thecontinuation is built upon the mutual benefit of learning effectsbetween two or more organizations. Trust ensures a continual exchangebetween organizations with a test of time. The trust betweenorganizations is about the necessary investments that make itexpensive to switch organizations` counterparts. Saunders (2010, p.90) noted that “trust between organizations break when there is alack of different partners, which also contributes to the costs.”
Interaction:It is one of the main features of inter-organizational relationships.Interaction means that changes in the behavior of the organizationsin question can impact on the entire B2B marketing and supply chainnetwork and that it would further affect the behavioral relationshipswith other organizations. These relationships are functional to oneanother. Any slight changes in the kind of inter-organizationalrelationships not only are functionally based on their ability, butare also functional in other organizations` relationships. Theseinteractions include dynamics, adaptability, exchange, value, andadjustment.
B2BMarketing Principles, Analysis, and Strategy
Thereexists a connection between B2B marketing and key elements of IQRs(Inter-organizational Relationships), which are both trust andmutuality. Organizations may have a lot of unique attributes thatfail to assist in the exploitation of opportunities andneutralization of threats (Biemans, 2010, p. 38). Marketingattributes dictate that for an opportunity to be a resource, it mustcontribute to the value of the organization`s ability to effectivelyhandle a competitive environment by being rare. Again, even when amarketing resource turns out to be valuable, but is easily imitatedby other competitors, would fail to offer a sustained competitiveedge.
Thereis a casual link that enhances value creation, which means it is notpossible to precisely define resources to offer a competitive edge.While the planning approach to marketing principles and strategy areequally applicable to different businesses that operate in businessor consumer markets with the following marketing perspective donedirectly into business markets research. It could also be the case ofbusiness to business marketing of consumer goods and servicesbenefiting from the adoption of inter-organizational relationshipsand business network perspective, and particularly about their supplychain management. However, the business-to-business marketing betweenorganizations, which relate to identifiable business-to-businessnetworks of both the customers and supply chain suppliers, havecertainty in gaining most from inter-organizational relationships andbusiness-to-business strategy.
B2Bmarketing within organizations do not focus on the numbers of therelatively huge customer base, each giving a relatively little powerin marketing. Rather, B2B marketing focuses on a small size ofheterogeneous customers with some of them wielding a huge marketpower, customers, and suppliers in a supply chain management (Ellis,2010, p. 39). Responsible B2B marketing strategy inbusiness-to-business markets pays attention to doing businesstogether for a long time, and thus forming dyadicinter-organizational relationships within which the parties inquestion make substantial investments. The investments would, inturn, create a strong bond between organizations about social bondscreated from the same.
M2BMarketing principles dictate that inter-organizational relationshipsare often connected in marketing networks, which can be characterizedin respect to activities and resources. In an organization, forexample, the principle dictates that one could fail to properlyunderstand the behaviors at the individual relationships levelwithout having to understand the manner in which it took place. Themarketing networks and relationships approach to strategy has a thingin common with the current resource of the organization and isconsidered to be a crucial factor in the determination of itsstrategic behavior.
CaseStudy: Trust and Mutuality
Syscois a B2B supply chain management company established five years ago.Recently, as part of its strategy to increase its customer base,while strengthening their trust and mutuality with its currentsuppliers and customers, the company launched a social video campaignon its website, in addition to doubling its web traffic numbers. Tomanage this, Sysco came up with a video series termed as theSuitemates. Suitemates is a comedy kind of video that focuses on twobusinessmen representing their organizations that were jailedfollowing a shady deal involving corporate merger.
Aspart of its business-to-business markets strategy, Sysco created thevideo featuring two healthy individuals to represent twoorganizations. Engaging in a shady deal involving a corporate merger,the video went ahead to highlight the chances and probability of aninter-organizational relation going south. In its bid to push for thevideo to go viral, the company used humor, while it avoids anyobvious sales messages.
BecauseSysco is a chemical and pigment company, important ingredients areneeded for pigments production and facilitating basic services. Foreach of its products range, Sysco tends to depend on one supplier foreach of the main ingredients. The company is supplied with theproducts by one Supply Company, but in some cases, there are othertwo alternative suppliers. Sysco is further limited by the setstructure of the industry since there are minimal numbers of trustedsuppliers for most of its principle products. The company is furtherlimited considering several of its main suppliers across the worldare also competitors. Additionally, there is a continued of importpenetration, and Sysco has anxieties over the predictability of trustof the suppliers.
WhyTrust and Mutuality are Crucial Elements of the Inter-organizationalRelationships
Trust:Organizations engage in trust relationships based on their missionand business demands. Trust among organizations primarily existsbased on a continuum of varying levels of trust acquired alongnumerous factors. The level of trust demanded these organizations toestablish strong partnerships varies widely depending on theorganizations` specificities, for example, goals, mission, andobjectives of partners` potential. A look at the case study above,Sysco aims at showing how its business-to-business marketing strategyis targeted at becoming increasingly reliant the information thevideo reveals about the company`s level of trust with otherorganizations (Ellis, 2010, p. 40). Trust is crucial ininter-organizational relationships however, the overreliance ontrust among external organizations can also elicit greater risks toorganizations.
Sysco,the B2B supply chain management company, came up with Suitematesinvolving two shady businessmen in a bid to highlight how the companywork on and handles trust with other organizations. The videocampaign calls for the use of trust models as part of the theory thatdescribes better understanding among organizations. Sysco is anexample of such a theory that validates trust as is evidenced bycampaign video about the information or application system while itprovides evidence. The preparation of the Suitemates gave way to themodel trust theory that would validate the level of trust based onthe evidence provided by the first businessman to the second towardssatisfying the organizations` trust expectations and requirements.
Anotherreason trust is important in an inter-organizational relationship,according to Chopra & Meindl (2007, p. 69), is in respect tofulfillment of assigned responsibilities. It is based on thecomplexity that two organizations exchange the kind of relationshipthat extends beyond the level of individual transactions. Greatcomplexity of winning consumer trust, just like Sysco, a B2B supplychain management company in the case study above, portrays the higherlevel of trust between the two organizations in question.
Contraryto discretely regarded supply chain transactions, for example, trustin inter-organizational relationships explains the kind of exchangesthat comprise different expectations from potential customers. Inrelational theory, according to Chopra & Meindl (2007, p. 71),organizations that are involved with exchange process, are requiredto fulfill particular roles in which they reveal the level of trustthat exist during a build of their relationships development. Thetrust results in each organization to heighten expectations thatconcern their behavior (Mentzer, 2001, p. 87). In B2B marketingrelationship, Mentzer (2001, p. 89) noted that integrity among thesuppliers elicits a positive influence on customer trust andsatisfaction.
Accordingto King (2015, p. 30), trust is also explained by organizationalbehavior theories and is involved with the supervisory or controlover the operations done by one of the business partners. Again,trust prompts one of the organizational partners to have a closesupervision to guarantee there is a special performance during theexecution of trust agreement. To consider the advantages that thetheory and practicality have on the approach, there is likely to be aflourishing inter-organizational relationship, which according toMathur (2008, p. 18), is crucial to the development and nurturing ofhealthy trust among these organizations. Sysco for example and fromthe case study above, the Suitemates worked towards the building oftrust between the two businessmen.
Mutuality:It relates to the agreement and acceptance by partners representingorganizations that the successes of individuals are achieved throughthe common success of the partners. Fill & Mckee (2012, p. 56)defines mutuality as the “degree in which focus is placed on therelationship benefits as a whole for a period, rather than to monitorpartners for fairness.” It is also evident that there is a closeassociation between mutuality and trust. Mutuality breedsreciprocity, which in turn figures immensely on the theory of socialexchange. Over the long term, mutuality reflects on the certainty ofthe time scale, which distinguishes the essence of mutuality on thespecificities of trust between inter-organizational relationships tobe based on the partner`s integrity and trust.
Inthe supply chain management companies, for example, Sysco in the casestudy above, mutuality has since been identified to have a positiveimpact on their inter-organizational relationships, and also as thekey factor, which influences the supply chain success process. Whatis considered to be clear is that the inter-organizationalrelationships work towards mutual advantage by seeking to ensuretheir relationship produces the kind of benefits that would satisfyall the partners involved. Mathur (2008, p. 21) observes that itrequires the organizations to not only carry out their duty but alsogo beyond the mere obligations of their contracts by meeting theexpectations and responding to each other. Mutuality works towardsforming a cornerstone for the realization of the contractualrelationship in supply chain management.
Supplychain collaboration, for example, starts with the communication ofobjectives towards building a mutual ground on forecasts and planstowards working closely with the organizations in the creation ofefficient products flows to the customers (Mathur, 2008, p. 24). Inany form of collaborative efforts in any inter-organizationalrelationships, any open communication to all the other chain partnersmeans risking vulnerability of other parties involved. Collaborationdoes not relate to the technical and operational matters but is alsorelated to a solid foundation of mutuality as it involves individualsworking with other individuals in organizations (Fill & Mckee,2012, p. 65). Mutuality impacts on the improvement of opportunitieson the success of the collaboration in the supply chain.
Mutualityis a crucial element in inter-organizational relationships in whichthe supply chain departmental members perceive that it depends ontheir mutual interaction. Previous research, according to Mathur(2008, p. 23), is an important element in respect to the reliabilityand predictability of one organization over the other. Throughcollaboration, there is a generation of competence levels, which isalso essential in competing with crucial tasks. Additionally, thepresence of mutuality facilitates the supply chain within theinter-organizational structure to foster the kind of coordinationthat would coordinate making of decisions and solving problems.Mutuality emphasizes on the principles of entrepreneurship,accountability, cooperation, and expertise.
B2B Marketing Practices
Inrespect to trust and mutuality concepts of inter-organizationalrelationships by drawing evidence from the Sysco case study, thereare experiences of business-to-business marketing practices that areessential to the relevance of the operations. Despite the challengesand complexities at the center of B2B marketing, there remains theneed to identify, develop, and maintain inter-organizationalrelationships. The relationship, according to Ellis (2010, p. 43), isanchored in two main theories, namely, fruitful marketing theory andgenerating demand theory based on the B2B marketing practices. Toestablish relationships and drive supply and demand based on mutualvalue, while wiping out a section through different complexities, itis important to internalize the nature, while changing perspectivesof the B2B buyers.
Inrespect to the B2B marketing theory, the Sysco case study above, theassessment of the inter-organizational relationship between Sysco andits main supply present a new scale of measurement. The B2Brelationship performance scale is shown to be an essential concept.King (2015, p. 34) noted that when such a “relationship performancescale is tested between two organizations and a sample also done byover 300 SMEs operating in B2B marketing.” Findings from the casestudy reveal an improved relationship performance, which includes:relationship commitment, relationship practices, and policies, trust,and mutuality in a relationship, cooperation, as well asinter-organizational satisfaction.
Drawingrelevance from the case study, B2B marketing theory identifies amulti-dimensional scale that reveals a strong reliability evidence,and at the same time discriminant, convergent, and validity. It wasalso revealed by the findings that B2B marketing performance issignificant and positively associated with trust and mutuality. Whileit is built on this theory, the B2B marketing practices were alsointended to immerse in periodic reports. Additionally, Mentzer(2001, p. 94) noted that B2B marketing theory explains how itspractices are characterized by challenges and complexities. B2Bmarketing explains how difficult it is to harmonize theinter-organizational relationships between the organizations` theoryand practice, but there are available ways to ensure the two benefitsfrom each other.
HowB2B Marketing Relationships Affects Supply Chain Management
Despiteall the positives in respect to supply chain co-operation within theB2B marketing organizations, there are tensions evident within theinter-organizational relationships. It is, in particular, to do withthe alteration of relations between suppliers and the sellers. Forexample, Sysco may have claims about its buyers laughing at thestructural code of practice supposedly in partnership. Here,suppliers may allege that the buyers have heightened the use of theirpowers. Therefore, to consider the issue that examines a particularglobalization impact on supply chains, the organization in question,for example, Sysco would have an enormous effect on its supply chainmanagement and buyers.
Effectsupply chain management requires the kind of mutuality built andmaintained by close and long-term relationships (Chopra & Meindl,2007, p. 76). Christopher (2005, p. 102) noted a successful supplychain, which relies on creating a strategic partnership that aims atensuring there are long-term inter-organizational relationships withtrading and supplies partners. In respect to this context, supplychain management in B2B marketing places more emphasis on thepartnership approach in place. Eventually, the identifiedinter-organizational relationships tie two firms with their successesas a whole supply. The effect B2B marketing has on supply chainmanagement is in line with joint ventures and strategic alliancesthat may fail to increase the inter-organizational cooperation of oneof the implemented components agreed upon by the two.
RelationshipB2B marketing works towards satisfying the organizations` customerneeds by making resources available. B2B marketing ensures thecustomers are motivated to structure and maintain the kind ofrelationships to reduce risk with the suppliers (Saunders, 2010, p.91). Here, the impact of B2B marketing over the supply chainmanagement on the organization`s financial benefits, for example,increased revenues and minimal marketing costs. For example, Biemans(2010, p. 45) found out that by “lowering the customers` defectionby 20% to 10%, the supply chain longevity of the suppliers wouldincrease from five years to ten years.”
Additionally,they would also be an increased net from the present value of profitsaccumulated. Finally, B2B marketing affects supply chain managementby interfering with its market effectiveness. The reasons for thisare because, as an organization, for example, the customers exercisea sense of trust because of the long-term commitment. This way, anorganization can directly work towards providing greater value forparticular customers. Again, it also impacts on customers`involvement on valuable information.
Forpurposes of recognizing, identifying, and analyzinginter-organizational relationships, it is crucial for businesses toacquire knowledge and resources, while having competitive advantagein the industry. The paper looked at the issue of B2B marketing andhow it impacts the supply chain management of an organization. It wasnoted that B2B marketing focuses on a situation that theorganizations engage with commercially. The paper also focused on acase study Sysco, a supply chain management company that handles thesupply of chemicals and pigments. Trust and mutuality took the centerstage, and was aimed at looking at how inter-organizationalrelationships benefit from exercising trust and mutuality in theiroperations.
B2Bmarketing practices drew evidences from the case study despitehighlighting some of the challenges and complexities, which remain aneed to develop, identify, and maintain fruitful relationships. Thesupply chain management within any markets relationships seeks toheighten trust among business partners for a common good. The papertherefore, identified how B2B marketing affects theinter-organizational relationship in a supply chain management.Additionally, the present value of profits is then accumulated withsupply chain management having an impact in the effectiveness of themarket. It is because, as an organization, the customers are alsopart of the customers trust for a long term B2B marketing commitment.
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