...Individual Paper: Activity-Based Costing Matija Karaula Individual Paper: Activity-Based Costing Sippican Corporation Course: B2B Pricing: Negotiation, Calculation, and Strategy Matija Karaula B2B Pricing: Negotiation, Calculation, and Strategy Individual Paper: Activity-Based Costing 1) Defining the problem The main problem of a Sippican corporation was a low pre-tax operating income (1.8%). To solve that problem, a cause had to be found. Sippican reported gross margins of 35% on valves, 5% on pumps and 38% on flow controllers. After looking at a gross margins of the three product lines, one would think that pumps were an issue to work on, and a main cause for a low operating income, because the pump sales accounted for 47,36% of a total sales in March with just 5% operating margin. However, the method of measuring the product profitability had to be questioned. To be more accurate, the method of assigning the overhead costs to each product line was the reason for inaccurate gross margins of the Sippican´s product lines. Exhibit 1 – Result of a wrong overhead cost assignment Wrong assignment of overhead costs Innacurate product profitability Inappropriate product pricing strategy Lower operating income The method of calculating the manufacturing overhead used by Sippican would be accurate if every of their three product lines was of the same or similar complexity. More complex products require more indirect work so one cannot simply...
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...INTRODUCTION The idea or concept of Business to Business (B2B) marketing has existed for centuries but for a long time it had been ignored and remained in the shadows of the more traditional Business to Consumer (B2C) marketing (Pitt & Honeycutt, 2001). It is over the last two decades has more light been shone on this important phenomenon- where businesses trade with other businesses, governments and Institutions . It is essential to first and foremost understand that B2B marketing cannot exist in isolation, the existence of B2B and B2C markets are in many ways dependent on each other for its survival and growth, a single demand for a B2C product such as a car gives rise to millions of B2B market demands such as aluminum, leather, steering systems, engines, etc (derived demand). Furthermore a failure in one market will have significant detrimental impact on the other. This essay however aims to identify the differences that exist between the two markets and how multinationals such as Hewlett-Packard (HP) implement separate marketing strategies based on the distinctions that exist within the market and their consumers. PRODUCT DIFFERENCE (standardized vs. complex) Hewlett Packard (HP), famous for its laptops, desktops and printers and storage devices sells its products in both markets. The B2C market it operates is more standardized and less complex that its B2B counterpart. Large groups of individual customers exist whose specifications for the products are more or less...
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...Business-to-business B2C & B2B A B2C site is defined as a consumer shopping on the Web, often called business-to-consumer (or B2C). B2C ordinarily refer to on-line trading and auctions, for example, on-line stock trading markets, on-line auction for computers and other goods. B2C e-commerce refers to the emerging commerce model where businesses /companies and consumers interact electronically or digitally in some way. One of the best examples of B2C e-commerce is Amazon.com, an online bookstore that launched its site in 1995. In a B2C e-commerce the focus is more about enticing prospects and converting them into customers, retaining them and share value created during the process. The ultimate goal is the conversion of shoppers into buyers as aggressively and consistently as possible. In a typical B2C flow of information between business and consumer typically is through the medium of Internet. This flow includes product orders/service requests from customers, product information, specifications, providing of services by Business etc. In addition, it may also include, flow of tangibles (e.g. goods ordered from customer, documents transfers between business and customer etc.) Giving credit to the author retrieved from http://projects.bus.lsu.edu/independent_study/vdhing1/b2c/ A B2B site is defined as transactions conducted between businesses on the web. In simple words B2B commerce can be defined as "doing business electronically" or business that is conducted...
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...Business-to-business (B2B) markets products or services to commercial businesses, government bodies and institutions for various purposes including for resale, commercial use or for incorporation in their products or services (Hutt & Speh, 2010). Business-to-consumer (B2C) markets products or services to individual buyers for their own personal consumption (Hutt & Speh, 2010). Although both are selling products and services, there are differences that distinguishes these two types of market from each other, especially when it comes to formulating strategies and marketing activities. Therefore, I agree with the statement. In general B2B is relationship-driven whereas B2C is product-driven. B2B focuses on relationship marketing efforts by retaining loyalty and meeting the needs of buyers while B2C focuses on developing products that fit into specific target markets rather than based on buyer needs. One of the difference is the market structure of both markets. B2B market is niche size. There are relatively few buyers however those buyers are large buyers. B2C market is large in size but consists of small buyers. Also, B2C market is pure competition whereby there are many sellers and buyers in the market. Due to the target market being a mass market, a single buyer or seller does not have much effect on the market. However, the niche size B2B market is oligopolistic competition with very few sellers, hence they are sensitive to each other’s pricing and marketing strategies...
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...MARKET IN B2B ENVIROMENT: Understanding the B2B Dynamics Seminar Report ii ABSTRACT With the rise of globalization and saturated local markets, many companies started chasing international opportunities that would help them expand to new countries and increase their brand recognition around the globe. One of the challenges that companies face while entering a new market is defining the right price and pricing of their offering to be competitive and successful in the market. In B2B area, there are not any wide research on pricing issues that companies face in the markets that they are planning to enter and the effects of business relations on pricing. This paper focuses on market entry strategies and market entry modes, the fundamentals of pricing in a new market and the differences of B2B and B2C pricing. The study covers market entry modes and its impact on profitability, value creation in B2B area and the key aspects of pricing behaviour while entering a new market. This study in general provides a framework for implementing the right pricing strategy while entering new markets and defining the right pricing behaviour in B2B environment. This framework enables companies to understand the dynamics of B2B environment covering buyer-supplier and distributors relations and providing pricing models for companies to be a competitive player. Tamur, O. iii PREFACE This paper discusses the concepts of pricing and pricing behaviour in a new market in B2B environment...
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...market whose scope is purely domestic to a more complex market dimension- The business to business market. (B2B). Fast moving consumer goods (FMCGs) are those products with a short shelf life as a result of the high frequency with which they are sold and also because some of them are easily perishable. One major characteristic of FMCGs is that they sell fast at a relatively low cost. Examples of these products include perishable foods such as meats, fruits, vegetables and baked foods; Fast selling goods such as soft drinks, alcohol, processed and prepackaged foods as well as toiletries etc. These goods are bought frequently due to their essential nature in the daily life of consumers. (Erdoğan and Taymaz ,2005). Of interest to a marketer is a clear understanding of the characteristics of this type of goods and the FMCGs market in general. FMCGs market involves a high volume of goods per day for example. This is due to the fast moving nature as well as the essential of the goods. Some of them are have to be bought by consumers on a daily basis. As a result, the companies dealing with these goods have an extensive distribution network in order to reach as many consumers as possible. The stock turnover is also high. Profit margins are relatively small due to the nature of the goods dealt with in this type of business. BUSINESS TO BUSINESS Business to Business (B2B) is type of commerce transaction that exists between businesses, such as between manufacturers and wholesalers...
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...including Business- to- Business (B2B) and Business- to- Customer (B2C). The terms B2B and B2C were developed to make a major choice whether they sell to consumers or others businesses that need products or corporate to manufacture or distribute. B2B refers to the potential market being a business and the primary activities are business-to-business sales. In the contrast, the term B2C refers to a business-to-consumer sales situation. | Business to Business (B2B)B2B refers to business model in which trading and exchanging directly between businesses. Transactions with other companies usually occur as manufacturers selling to distributors and wholesalers selling to retailers.Pricing is based on the quantity of order and is often negotiable. | Business to Customer (B2C)B2C is included commercial transactions over the Internet between businesses and customers, in which customers of this type is that individuals purchase. This type applies to any business or organization to sell their products or services to customers for personal needs. | Target customer | Customers of B2B transactions are companies, while B2C customer are individuals. Considering the letter C in B2C is the final consumer (end-user). This also means that C refers to companies, which buy products to use.Overall, B2B transactions are more complex and require greater safety. | | Negotiation and transaction | Sales to businesses (B2B), including factors such as price negotiations, delivery and determine the specifications...
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...E-Commerce Business Models: B2B & B2C Name of the Student Name of the Institution Definition of B2B Model (Business to Business): The B2B business model is defined as a form of trading in which the buyer and different companies come together to make purchases and sales in an electronic environment (Yeoman, 2004). In this kind of trading on the electronic medium both the buyers and the sellers are business people or two organizations. The example of this trade can be when the wholesalers are selling their goods to the retailers through internet. Another example can be when the manufacturers advertise and sell their productions online to the wholesaler or to the retailer. In this kind of trade the end consumer of the product is not involved. Definition of B2C Model (Business to Consumer): Business to consumer model in electronic environment is very effective model in the study of commerce. This model has opened the ways to access to a wide market of customers. In this kind of trade there are more chances of involving the potential customers into sales. B2C model is defined as internet based trading that’s allows the different buyers (manufacturer, wholesaler or retailer) to communicate and sell its product to the end consumer. This model is also defined as all the e-commerce activities that take place to cater end consumer of the product (Coteanu, 2005). Unlikely B2B model the seller is the business person and the buyer is the individual consumer...
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...parties agree to and the clauses upon which the deal is finalized. Since the case is based on sale of good it will therefore include terms and conditions on which the contract is formed and the desired actions from both parties. The terms on which the sale of good is made and the clauses which make the contract null and void. The report will discuss the contract from seller perspective including the processes involved and stages throughout the selling process through a commercial contract. However, the report will also consider the buyer perspective as no contract is formed without the consent of two independent bodies therefore the terms and conditions laid down by buyer on which the sale is to be made will also be highlighted. The contract serves as a purpose to cushion both the parties against any foreseeable losses and provide a guideline to perform a profitable deal which provides a mean to conduct business. Therefore contracts cover every concerned authority involved with definite understood terms upon which they agree and sign contract. Upon finalizing, the contract serves as a mean to seek the guideline for desired actions and basis of deal and as and when necessary might be used as a measure to prevent from any loses with the help of law. There are some desired actions by the management in case of any disputes therefore effective management practice is vital in any B2B or B2C contract. Introduction: Bin Hashim Products are manufacturer of quality textile products...
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...1)A proven leader with extensive experience in sales, marketing, vendor negotiations and management at the senior executive level. Offering expert level skills in change management and problem resolution. HIGHLIGHTS • Strong track record delivering outstanding sales results and effecting massive positive change in a wide range of challenging situations. • Proven ability creating highly effective sales and marketing campaigns. • Skilled and recruiting, training, and motivating teams of top-performing sales experts. • Perfect record of attaining all sales and performance objectives. • Able to manage multiple projects simultaneously while meeting all deadlines. • Demonstrated ability troubleshooting business problems and implementing creative, highly effective solutions. • Highly motivated, confident, organized, detail oriented, patient and disciplined. 2) Profile Dynamic, results driven and enthusiastic sales & marketing professional with proven ability to deliver innovative marketing concepts and strategies. Conceptualizes and develops appropriate marketing solutions to benefit customers, increase market share and overall sales. Possesses strong presentation, negotiation and closing skills plus ability to make strategic decisions and react rapidly in conditions of high competition. Key Strengths • Thorough knowledge of marketing and sales; analysis of clients' needs; devising and implementing customized solutions. • Developing an...
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...eCollaboration: Overcoming Boundaries through Multi-Channel Interaction June 15 - 18, 2008; Bled, Slovenia Value Creation in B2B E-Markets of China: A Practical Perspective Jing Zhao a, , Shan Wang b and Wilfred V Huang c a Center for International Cooperation in E-Business, College of Management China University of Geosciences, Wuhan 430074, P.R.China zhao5563@gmail.com b Department of Management Science, School of Business, Renmin University, 59 Zhong Guan Cun Avenue, Haidian District, Beijing 100872, P.R. China wangs7@gmail.com c College of Business, Alfred University, Alfred, NY 14802, U.S.A. fhuang@alfred.edu Abstract In China, the development of e-market has unique characteristics in the transactional processes and market mechanisms, which relate largely to the current industry structure, financial infrastructure and organization structure. This paper seeks to develop a conceptual model of B2B e-market value creation strategy, and can also be used to highlight the complexity of such activities for Chinese B2B e-markets. A process-oriented approach to modelling the value of e-market, rather than strategic position theory or a simple descriptive approach, is found to be more suitable and has been selected. The model consists of two dimensions: the e-commerce process and the controlling complexity. We apply the model in an actual Chinese B2B e-market (Alibaba.com). The crucial value creation activities and strategies in the four phases of e-commerce process are...
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...“INSTITUTIONAL SALES AND ITS GROWTH AT NIPPO BATTERIES Co. Ltd. PRODUCTS” SUMMER TRAINING PROJECT REPORT SUBMITTED TOWARDS PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT (Approved by AICTE, Govt. of INDIA) (Equivalent to MBA) ACADEMIC SESSION 2009-11 SUBMITTED BY: CHINGAKHAM DENIS SINGH Roll no. BM 09 056 SUBMITTED TO: EXTERNAL SUPERVISOR: Prof. Anagha Shukre Faculty IMS, Ghaziabad INTERNAL SUPERVISOR: Mr. Saswat Das General Manager(Sales and marketing) NIPPO Batteries Co. Ltd, New Delhi INSTITUTE OF MANAGEMENT STUDIES C-238, BULANDSHAHR ROAD LAL QUAN, PB No. 57 GHAZIABAD ACKNOWLEDGEMENT I would like to extend my deep gratitude towards NIPPO BATTERIES CO. LTD. for providing me with an excellent opportunity to be associated with it as a part of my summer internship programme. I was associated in particular with GLIDE Institutional sales, the specialized department of NIPPO Batteries Co. Ltd. responsible for extending the market share of Glide shaving kits and its database of clients. Working here turned out to be a great learning experience for me, the credit for which goes to each and every member of NIPPO batteries Co. Ltd. New Delhi sales and marketing team. It is my privilege to acknowledge my sincerest gratitude to Mr. Saawat Das (Country Head - Sales and marketing, NIPPO) for his co-opearation and inspiration at every stage during the pursuance of the project. However, in particular I would like to thank Mr. Saswat Das (General Manager - Sales and marketing...
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...1. Price Waterfall Analysis Firms must understand how sensible the prices are that your current negotiation process is leading to. 1.1. Action plan. • Plot the price paid against the number of units bought by the customer. Often it becomes evident that your best (high-volume) customers are paying more per unit than your less profitable customers. This is not a recipe for happy and long-term relationships. • One often-recommended solution is to construct a ‘price waterfall’ chart. This allows you to work out the true net price for each customer. – Start with ‘Transaction price’ – Net Rebate – Net Allowance – Net Discount – Calculate final ‘Pocket Price’ 2. Negotiation Price often looms larger in sales reps minds than in repeat buyers minds. You do not know if the price is too high until you lose the sale • Establish economic value before discussing price • Be the first person to bring up price: If you dont talk price, your customer will. – 94% of sales reps do not talk price until their customer does – 1/3 will not say price ever, will only write it down or point 1 2 B2B NEGOTIATIONS 2.0.1. Implement Pricing Policy via a Price Menu. • Establish consistent, transparent criteria for discounting -Fixed prices, Flexible offers • Never give ad-hoc discounts to repeat customers • Reward loyalty and trial, not sheer volume Study of 64 firms who dropped vendors • Price was reason vendor was dropped 8.1% of the time • 70.2% delivery problem • 9...
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...for conducting business electronically, and bringing us into the age of electronic commerce (E-Commerce or EC). The advent of Internet-based business-to-business electronic commerce (B2B-EC) has brought about many benefits to enterprises in developed countries. It offers direct links between trading firms and their customers, which creates a new trading mechanism in a highly effective and efficient manner, thus reducing operating costs and achieving quick response time. As such, enterprises in developing countries have begun to apply B2B-EC to their businesses, in order to achieve these benefits as well. China has been developing dramatically these years, and has joined the WTO in 2001. However, B2B electronic markets are still in their early stages of development. Diverse aspects of consumer economy such as purchasing habits, payment methods and modes of exchange are different from those of the developed countries. These years, many corporate suppliers and customers in China are looking for Internet-based solutions to streamline their procurement procedures and to reduce the cost of establishing trading relationship by conducting trading transactions electronically (Martinsons, 2002). Due to the China’s specific economy environment, the development of full-scale e-commerce processes in B2B markets may encounter several obstacles. According to Hempel and Kwong (2001), the network infrastructure is less of a bottleneck in China today, but the business infrastructure presents...
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...A Report on Customer Attitude Towards M‐Commerce in B2B Submitted to Ms. Priya S Senior HR Mydeals247 At Mydeals247 Bangalore, Karnataka Prepared by Anumeha PGDM 2014‐16 IIM Rohtak Acknowledgement I would like to express my heartfelt gratitude to all the employees of Mydeals247, who constantly made me feel at home, even though my training span was for only two months. I would also like to profusely thank all the members of the Business Develpoment Team for being kind enough to answer my queries whenever I approached them. I would like to specially extend my thankfulness to Mr. Venu G. Somineni for motivating us constantly during these two mots of internship. I would like to thank Mr. Panchseheel and Mr. Rafique for taking pains in helping me grasp the existing work processes and at the same time making the environment cheerful to learn in. I would also like to particularly mention Mr. Aneef and Ms. Anjali for being kind enough to always offer a helping hand and a cheerful smile. Last, but far from least, I would like to profusely thank Ms. Priya S, for offering his constant guidance and motivation which helped me complete this internship programme with a gain in knowledge and experience and in a timely manner. Contents E‐ Commerce Industry in India Trends in B2B eCommerce Concerned Challenges Company Profile ...
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