Managing Business Marketing & Sales

Professor Waldemar A. Pfoertsch弗沃德

Term 4/MBA 2006 Oct. 8 -28, 2007

How do organizations buy?

• Derived demand

• Multiple Buying influences

• Long Term relationship

How do organizations buy?

• Make or Buy or Outsourcing

• Reciprocity

• Competing with the customers

Organization of Purchase Function

• International Aspects

• Professional Buyer

• Professional Purchasing

DIPROD

•  Hexonic Acid

• UPAC Name: 2,3,4,5,6pentahydroxyhexanoic acid

• CAS Number 5328-41-6Chemical

• Formula

Purchasing Objectives

Market Development Hexonic Acid

• 3000 t

• Canchem 60%

• & Alfo 40%

• Shortage over the last 2 years

• Depressed prices

• Low capacity

DIPROD Business Ethics

The player

• Brent Miller Purchasing agent at DIPROD

• Mr. Baker at Alfo

• Mr. Wallace of Michigan Chemicals

• Mr. Aldert Canchem

Final Quotes

DIPROD Case Questions:

1. Evaluate DIPROD’s purchasing objectives and the firm’s policies with respect to its suppliers. What would be your recommendation as to the possible change? Support your recommendation.

2. If you were Brent Miller, what would you decide with respect to the Hexonic contract award? Support your decision.

3. What are the key points that each supplier might make in support of its bid? Explain the rationale for them

Big Account Management at Dell China

Dell China

• $ 220 Q 2004

• 9% market share

• No. 3

Dell’s selling in China

• Direct selling

• To customer’ special demand

• Selling types:– “relationship mode” – “trading mode”

Dell’s China Segments

(1) Relationship customer (companies with more than 3,000 employees), including:

- Public sector – educational departments from the government- Business sector – telecommunication, energy, finance, insurance,

automobile, petrol, chemical, and airline industries- Global account – world top 500 enterprises which have purchase

contract with Dell

(2) Middle-sized customer (companies with 500-3,000 employees)

(3) Small-sized and family customer (companies with less than 500 employees and individual consumers

Dell’s China sales

• Sales districts as profit centers

• External / Internal sales force ratio

• RAD method

• Customer types: – below 0.5 million, – between 0.5 and 1 million, and – above 1 million US dollars.

RAD

• R Retention– SOW, share of wallet, refers to the percentage of

purchase from Dell in the client’s overall IT investment, > 50 %

– SOA, share of account, refers to Dell’s coverage on the departments or subsidiaries of the client which have independent purchase power, > 50 %.

• A Acquisition– BP, buying power, refers to the annual IT purchase

of the client • D Development

– it relates to client with SOW between 10% - 50%

RAD categories

The creation of RAD model is shown in the following steps

• The first step: creating the current client database

• The second step: analyzing the data

• The third step: determining the RAD framework

• The fourth step: making a working plan

Big Account Management at Dell China

1. Describe Dell’s marketing efforts in China. How did they segment the market?

2. What is the structure of Dell sales management in China?

3. Evaluate the RAD tool: What option does it open up for the company and the sales team?

4. Apply the 4 step approach for another industry/company.

5. Can you recommend other ways for big account management?

High Low

High

Low

Supplier’s business strength with customer

Customerattractiveness

Strategic:invest

Volume: manage for cash

Bread & butter: maintain

Future stars: selectively invest

Key customer

Developed from McDonald, Millman & Rogers, 1996

Customer portfolio strategy matrixKey account Portfolio Analysis

Thank you!

谢谢！

Waldemar Pfoertsch

Professor Business Marketing

CEIBS

699 Hongfeng Road, Shanghai China