The Basics of B2B #3 - Without brand positioning, don't mention sales

06 Apr, 2021

This is the third article in the series of articles titled The Basics of B2B by Brands Vietnam co-operated with Dr. Dinh Tien Minh, Head of Marketing subject, School of International Business - Marketing of University of Economics Ho Chi Minh City. The content of the article revolves around the basic knowledge of the B2B world. From there, readers have their own conclusions when they want to venture into a large and prosperous career market - B2B Marketing.

Many people often equate B2B Marketing with sales. But the category of a marketer in a business includes many stages, from market research to product development to media promotion to branding. Selling is just a tiny link in the process. And planning for all activities must be driven by an indispensable factor, which is brand positioning.

* Firstly, many people think that B2B Marketing is merely selling, what is your opinion on this viewpoint?

B2B Marketing is not just selling, and it’s just the last step in a series of jobs that marketers need to do. I understand that many young people are hesitant to join B2B businesses because they do not fully understand it. But selling is only in the later stage, and all the previous stages, such as market research to shape products or branding communication, are within the scope of B2B Marketing's work. Even when the sale is going on, B2B Marketing still has to do it in parallel to best support the sale, according to the set target of both Marketing and Sales.

Take the case of an enterprise specializing in selling electrical equipment to construction projects. Each region or country has quite different electrical standards and socket configurations, so they often have to do research to create products that match the requirements of each market as electrical appliances sold in the UK are all three-pin flat-pin plugs, while in Vietnam, it is easy to find both flat and round pins. And once they understand customer needs, marketers need to continue to evaluate the resources of the business to ensure a smooth production process. After that, when the finished product is available, they will continue to build a pricing strategy combined with a distribution policy (the sales team performs this task) to push the products into the consumer market. Finally, communication is an indispensable activity, such as advertising in specialized magazines or exhibiting at specific fairs such as VIETBUILD, to build awareness and connect with potential customers.

Thus, the job category of the marketer in B2B enterprises has little difference compared to the B2C, which still encompasses four groups of strategies: Product, Price, Place and Promotion. Besides, Personal Selling in B2B Marketing is so important that it is strategically separated, although it is often seen only as part of a communication strategy. All the above strategies need to be designed consistently and closely through brand positioning to achieve optimal efficiency.

B2B Marketing's work category encompasses 5 strategic groups: Product, Price, Place, Promotion and Personal Selling.

* Can you share more about positioning strategies for B2B businesses?

Talking about positioning strategy, I want to share about a fairly standard model is STP (Segmentation - Targeting - Positioning). The first job is to segment the market (S) according to the criteria, B2C businesses often divide consumers by demographic, psychological or behavioral characteristics. Still, for B2B businesses they usually divide customers by company size, area of activity or purchasing situation. Next, marketers will evaluate the size and potential of each segment, combining with comparison with the capacity of the business to choose the appropriate target market (T). But the problem is that many businesses will choose the same segment to do business, then building brand positioning (P) is indispensable to influence customer choice. Simply ask yourself: Why should customers buy from your company when they have so many options? If there is nothing special, there is no difference, do not expect them to think about you, let alone buy.

So what is a good brand positioning? A good enough position will make an impression on the mind of customers, so that when they are in the midst of so many choices, they still decide to buy your company's products. To do so, businesses need to find out customers' expectations in order to determine positioning criteria. Like when they make a purchase, what do they usually expect? Do they want competitive pricing or attentive after-sales service? Based on those expectations, new marketers determine the most crucial criterion for the type of product the company is offering.

* Why should customers buy your company's products when they have more than one choice?

In fact, businesses often draw a positioning map with two axes that are the two criteria that customers expect the most. Through quantitative survey, marketers can determine the relative position of their brand on the map, thereby comparing their position with competitors and get a complete picture of the market. For example, the price your business offers may not be too competitive, but your after-sale service is better, and if these factors match what customers expect, don't worry too much.

In general, brand positioning is a key strategy for both B2C and B2B businesses. The essence of this activity is to make a difference in the mind of customers by finding out and identifying the attributes that customers really expect.

* So, according to you, how businesses should choose their competitive attributes and draw positioning maps to be effective?

Before talking about competitive attribute selection, I want to go through a three-level model of a product, where each product/service is made up of three circles. The first circle (Core product) is the basic benefit of the product to satisfy customer needs, as the core of a phone is used for communication and communication. The second circle around (Actual product) is the tangible features of the product such as Quality, design, packaging, brand... Finally, the third circle (Augmented product) is the added value of products such as: Payment, warranty, customer care... Thus, when selling products, businesses compete on the solutions they provide and can rely on associated features or services.

The three-level model of the product.

Understanding this, the question for businesses is that they should build a competitive attribute on which circle(s) to gain dominance in the market? We need to go back to the story of customer expectations. Marketers need to know how to apply qualitative techniques, such as in-depth interviews, group interviews or observations, and asking prompt questions to discover the attributes that customers expect when buying products.

After that, businesses will need to conduct more quantitative research, through the scales, to quantify the identified attributes. For example, marketers can do a survey evaluating customer interest with attribute A on a scale of one to ten. From there,, work out the average score based on the collected data. To ensure statistically significant results, we need to keep in mind how representative samples are selected and approached. Finally, the enterprise only needs to compare the average point of each attribute on two axes of the positioning map to determine its own coordinates.

Do the same with competitors, and thus we can draw a systematic positioning map, thereby providing an overview of the relative position of each business in the market.

* Can you share how to read the navigation map to make strategic decisions?

First, businesses need to look at the coordinates of themselves and their competitors on the map to assess whether the current location is good or not. If not, marketers need to identify things that need improvement, like customer service or pricing, to gain a competitive advantage. In the case of the business having advantages, the marketer also needs to be sensitive to realize that such an advantage is absolute or just a relative advantage.

Brand positioning process for B2B businesses

If both evaluation criteria are absolute advantages, and at the same time, what customers expect, businesses need to continue to maintain that competitive advantage to beat competitors. But if the two criteria are only relative advantage, the marketer must always be in the spirit of improvement or educate the market and communicate with customers to direct their expectations in a more favorable direction.

However, in the course of operation, businesses need to realize that no advantage is permanent over time. Technological advancement, or changes in customer needs, may cause them to expect different properties and positioning from the present. Therefore, marketers must always be in the spirit of innovation, ready to reposition when necessary to become superior to their competitors or even lead the market.

* Thank you for your sharing.

Source: Brands Vietnam.