Business-to-Business Marketing R

1
Business-to-Business MarketingRD Strategies in
Industrial Markets

• Haas School of Business
• UC Berkeley
• Fall 2008
• Week 5
• Zsolt Katona

2
Where we stand

• Week 3
• Pricing in Industrial Markets
• Week 4
• Diving into Industrat
• Week 5
• RD Strategies in Industrial markets Sealed Air
• Industrat Decision 4
• Week 6
• Sales Force Design and Management

3
RD Overview

1. What is research and what is development?
2. Market driven vs. market driving strategies
3. Specifics in B2B markets work together with your
   customer, co-development

4
Research versus Development

• Capability
• Technology
• Takes longer
• Higher Risk on Investment
• Microprocessor
• Nanotechnology

• Product
• Specifications
• Relatively fast
• Low risk if the firm knows what it wants
• PC
• Specialty chemicals

5
Market-driving and market-driven strategies

• What is the goal of RD?

• Serve existing demand (market-driven)
• Focus on new product development using existing
  technologies
• Can be profitable in the short term

• Create new demand (market driving)
• More common in research intensive markets
• Needs more time to succeed

Sealed Air
6
How to Find New Opportunities in a B2B Context
You

• How do our potential customers make profits?
• Analyze their revenue drivers
• Analyze their cost drivers

Key Understand who their customers are
Understand how they serve their customers
Your Customer
Your Customers Customers
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Revenue Drivers

• What can we give/develop for them that would
• Allow them to better serve their customers?
  (give their customers a greater value
  proposition, greater satisfaction)
• Allow them to gain competitive advantage? (time
  to market, better reliability over rivals, give
  their customers unique capabilities)
• Understand who their customers are and what value
  propositions they are looking for

8
Cost Drivers

• What can we give/develop for them that would
• Reduce need for costly labor
• Deploy physical resources more efficiently?
  (less real estate, less IT overhead)
• Understand the customers business and production
  process and how they serve their customers

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Co-development of products in industrial markets

• Product development may be inter- twined with the
  customers adoption process.
• Product development and adoption sub-processes
• Problem recognition
• Need analysis
• Product concept
• Technology choice
• Financial analysis
• Product design
• Production sourcing
• Unit commitment
• Use implementation
• Seller and buyer may cooperate at different
  levels for each step.

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Traditional Transaction and Customization
Problem recognition Need analysis Product concept Tech. choice Financial analysis Product Design Production Sourcing Unit Commitment Implemen-tation
Problem recognition
Need analysis
Product concept
Technology choice
Financial analysis
Product Design
Production Sourcing
Unit commitment
Implementation
development
adoption
11
Traditional Transaction and Co-development
Problem recognition Need analysis Product concept Tech. choice Financial analysis Product Design Production Sourcing Unit Commitment Implemen-tation
Problem recognition
Need analysis
Product concept
Technology choice
Financial analysis
Product Design
Production Sourcing
Unit commitment
Implementation
development
adoption
12
Co-development and Buyer-Seller Relationship
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RD Summary

• Research and Development are not the same
• Strategic decision market driving RD or
  marketing driven RD
• Working with your customer throughout the
  development process

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Industrat Stock Prices
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Prediction Market
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