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Business-to-Business Service Retailer in Automotive Industry

Executive summary

In the dynamic world of marketing, along with the selling of products, service marketing is also becoming a common scenario. This constitutes the necessity of advertisement and other sort of promotional tools with greater specialization and selling effort. Nowadays, all businesses in the world tend to spend a huge expenditure on advertising themselves and their offerings in order to obtain a greater awareness and response from their target market. This coursework is going to represent a system, formation, and operational methodology of a B2B service retailer named ABC advertisement agency. The idea of the selected agency is to satisfy customer needs as an ultimate goal and developing strong relationships even when there is a constraint of indicating the nature of the target market. The car industry is still showing potential reluctance and unwillingness of adopting such a service, as it seems to be highly expensive for them. Specifically, by deciding to serve the Australian car industry, Adopt has promised to provide specialized consulting services in advertising and it desires to deliver cordial advice and perfect knowledge with the finest professional excellence. The overall study will show a logical framework by which this industry will be able to influence the forthcoming promotional performance by minimizing costs and keeping the unique benefits of advertisements in mind. Additionally, various players within that industry will realize their brand valuation, ultimate customer response towards the ads as well as the communicator’s capability for separating the campaign outcome and the matching of a budget with forthcoming value generation. So, the mission strategy can be indicated as a practical, effective, and efficient media solution for the clients to be successful in the future. It does not bear the formal concept of acquiring customers rather than gaining a mutual partnership with them by generating a profitable cash flow or commission. Finally, the company will be built upon the services of competent personnel by holding glory for gathering huge loyalty from customers by changing their general viewpoint towards advertisement with a greater number of clients from the targeted country for more than 30 years.

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Idea loops of ABC Advertisement Agency

The idea cycling stages of this proposed ad agency involves four parts, namely:

Idea loops of ABC ad agency
Figure 1: Idea loops of ABC ad agency

At the first stage of idea loops, ABC will consider its own industry situation as this new form of business has already boomed and competitors within a shorter period. Therefore, to conduct a proper investigation, it will find out a number of global competitors with huge revenue, winners of so many national and global awards, efficient capital structure, and stronger customer base. However, the major service deliverer in this industry according to 2007 revenue can be shown as below:

Global leaders of ad agencies
Figure 2: Global leaders of ad agencies

Currently, the number of national and international ad agencies is increasing because of the growing concern of the target markets since a maximum of them want to present their corporate values in some differentiated ways. For this, those agencies are formed up of two main departments of core agency and creative thoughts. The integrated problems and scopes of the new venture will be as below:

Problems

  • Australian car industry does not have adequate money for affording expensive expertise ideas.
  • Lack of knowledge about the effectiveness of ads.
  • The use of celebrity endorsement often creates confusion between reality and ethics.

Opportunities

  • Operation with the motto of altering intended industry partners’ thinking of waste culture perception towards ads.
  • Worldwide recession is confronting the advertisement scenario, which will expand the industry.
  • The positioning strategy of customer persuasion and measured benefits of ABC agency will make it successful in capitalizing in an upswing.
  • Stutely (2007) said that the use of integrated internet, television, wireless network, and streaming audio and video systems would create additional trust in customer’s minds.

Lunn (2009) said that the topmost difficulty in the value-generating process involves existing popular beliefs of the possibility of wastage because of the common reasoning of poor management caliber and negligence of management. The reason for which such thought exists in corporate behavior is for a lack of proper idea upon the cost of ads as well as its usefulness in relation to the increase or decrease in sales, stakeholders’ profit, or generate current assets. Efficiency measurement may also be hindered for the social criticism for the wastage, stereotype of tolerating ads as “necessary evil” where there is no fixed return.

The design phase will solve three major issues. Kotler & Armstrong (2006) argued that the former one involves perfection criteria since the agency will target the difficult market segment having negative value perception. Here, it will be committed to providing timely and customized solutions to the individual car manufacturer, long-term customer satisfaction and partners will be ensured to maximize their ad efficiencies with genuine feedback. Next, several ideas will be implemented to do so. The best solution will engage:

  • Adoption of global depression;
  • Implementation of AIDAS;
  • Development of strong buyer-supplier relationship;
  • Improving the marginal level of client satisfaction.

The major goals of ABC will become the indicator of execution factor as its aim to gain achievement of reasonable market persuasion and popularity at a profit. Therefore, the specific objective will be gaining 60% market share in ad consultancy at 10% initial profit. The company will measure its success by conducting market research to the desired outcome. Implementation will induce:

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  • Deciding positioning strategy
  • Selecting service line
  • Fixing financial charges
  • Introducing distribution and sales force layout
  • Creative development
  • Production
  • Media planning and purchasing
  • Associated services including direct marketing, sales promotion, branding, design, etc.
  • Conducting budget

Thus, the ending effect on the system, structure, and stakeholders is supposed to be positive and sequential.

The last phase is an adjustment, which implies will provide insight upon feedback procedure to estimate the active and non-active terms along with the causes of such occurrences while will steer for a future action plan with updated understanding and influence as ending recommendation such as changing of media planning, communication message or terms or charges of consultancy.

Toyota Production System vs. adversarial commerce

One of the most popular Japanese automobile company Toyota’s production systems is an ideal of lean manufacturing known as TPS, which integrates the overall corporate philosophy, values of culture and technical process.

Some operative business philosophies are:

  • Take a long-run goal of creating market demand and CRM.
  • Continuous improvement for solving the visible problems. A contingency plan is also essential to handle tiny to largest difficulties.
  • “Pull” strategy needs to be utilized by which the industry will willingly adopt its services.
  • Development of a culture where there will be no permanent problems.
  • Offering quality to get first attention.
  • Standardization will be maintained at each phase of our prepared ad, which will indicate the level of continuous improvement.

Basing upon those guidelines, ABC will specifically concentrate on continuous improvement and respect-oriented motto to all parties, as:

  • Regarding the former one, the agency will enlighten its vision theme relies upon creative working and audacity.
  • Following the popular Kaizen method as a symbol of developing distinct corporate culture will also improve performance through innovation and growth. This task involves the critical innovation of searching inside the industry and mega business society for newer ideas by a benchmarking process and then searching out of any drawback will be maintained.
  • Implementing Genchi Gembutsu will tend us for moving to the actual need of developing ads for car companies while the organizational purpose of value maximization (Gembutsu 2009).
  • Maintaining of JIT or Just- in-time philosophy.
  • Implementation of proper IT and IS in sustaining strong CRM.
  • The later one will emphasize respecting each party in the value chain through a trust generation way in terms of consultancy, supervision, and feedback, which will make better communication.
  • Motivating the internal workforce of the agency will involve team working, job diversification, presentation, educative development, and team respect.

On the other hand, adversarial commerce can be used by businesses to gain short-term benefits by which an entity dominates the relationship with their supplier in some negative ways. It is commonly used by ABC’s target clients as car manufacturers who concede the agency without any sort of consideration as a minor party within the entire supply chain. This mostly forces an adversarial firm to move on shorter goals rather than longer objectives, which is responsible for creating distrust and conflict between both parties.

Situation analysis

Current market situation: The present market situation normally analyzes different internal and external factors affecting commercial ad firms, such as SWOT analysis, potential market analysis, and related difficulties and scopes in that field.

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SWOT analysis

Ad agency SWOT analysis consists of projected strengths, weaknesses, opportunities, and threats which can be accumulated from internal and external facts, as:

SWOT analysis

Strengths

Several positive issues are –

Internal:

  • Integration of so many tactical skills conversing intellectual, objective, or situational;
  • Stronger philosophy of profit generation with value incentive.

External:

  • Involvement and dealing with most effective marketing tools as advertising.
  • Better communication opportunity than any other tactics.

Weaknesses

Some drawbacks will be –

Internal:

  • Hisrich & Peters (2006) stated that the internet ambiguity and fraudulency through online profiling of many fake companies had already created a negative question regarding the ethical value of ad agencies.
  • Higher costs associated with each phase of preparing in an ad, which is responsible for making it difficult for the clients in assuming their sales benefits.

External:

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  • Existence perception of many successful global leaders in the intended industry towards taking such specialized services is somewhat liable in the downturn return of many players.
  • It is difficult to create demand as well as high sales volume within a limited period.

Opportunities

Although there are some black sides, positive sides will involve the following –

Internal:

  • Integration with latest technologies regarding social networking, media sites, and proposal outlining are increasing loyalty to the reluctant customer groups.

External:

  • In the entire world, Australia occupies a special opportunity of expanding the recent ad market for favorable costs, price and growth issues.
  • Diversified market competition is creating more scope for such organizations to offer more competent and skilled services.

Threats

Some anxiety issues are –

Internal:

  • The increased number of total ad agencies is increasing where the formation of such type of entity will face numerous pressures and challenges.
  • Hitt, Ireland & Hoskisson (2001, p.66) said that any mistake in prediction and real acceptance will pose certain incontinence upon the agency strategy.

External:

  • Much specialized corporate personnel ranging from industry specialists to top executives find out no direct impact of advertisement on selling.

Target market analysis

As previously noted, ABC is interested to serve the Australia-based automobile industry which is executed and prioritized by high-class global car manufacturers. Some most notable potential customers who are a need of considering a reasonable budget to advertise their exclusive brands are Toyota, Ford, Land Rover, Nissan, Honda BMW, MINI, Dymler- Chrysler, etc. Traditionally, the car industry is being targeted by various suppliers because of greater adequacy in maximizing profits by benefiting the involved suppliers. Since the recent world is merely going to depend on marketing and the final customers always try to seek information before purchasing a single item, it is very much essential for the industry not only to manufacture a better quality product but also to inform them properly to the final customers.

Problems

  • The global industrial recession is creating ultimate pressure upon the car industry. They are wasting a lot of money on advertising (but it can be reduced if they buy our company’s measurement techniques)

Scopes

  • In relation to the world, the targeted country is less infected from recession scenario in the automobile sector.
  • Growing acceptance, especially for the internet, which is an effective media vehicle of advertisement today, more than half of the customers use the internet for gathering information about new models and prices and thus make a buy.

Value proposition

Regarding the sources of value, ABC will consider a value triad as following:

Value triad
Figure 4: Value triad

ABC will offer a number of services by their present options:

  • Legal advice on advertisement through solving problems and issue analysis
  • Logical measurement on market research
  • Customization
  • Communication
  • Feedback of ad efficiency
  • Tracking and trailing the trend
  • TTL or Through- the- line advertisement
  • Creative and media planning and buying service
  • Others (designing, branding, etc.)

Explanation

  • Advisory service generally stands upon the consultancy services on designing web, marketing through a search engine, online advertising and e-commerce and e-business.
  • Intended market research will be based on various techniques regarding the exploratory and descriptive modules.
  • Customization of delivering services according to the specific needs of clients;
  • Cooperative communication by breaking through stereotypes, a remote image of the agency from such style with an effort to create an image of appreciated corporate advisor.
  • By feedback, it will provide information surrounding the influence of ad on customer’s mind.
  • TTL is an IMC or Integrated Marketing Communication tool that earns revenue via media engagement.

All of those services are derived to “pay more, get more” exchange to car producers, as:

Possible value proposition of ABC ad agency
Figure 5: Possible value proposition of ABC ad agency

Value assumption

In the questioning of addressing value to the targeted car companies, the following structure can be implemented:

Value assumption
Figure 6: Value assumption

Therefore, in the car market, we need to persuade the top-class employees at first, like- CEO, CFO, Marketing manager, financial advisor, and controller.

Arrangement of market research

It will include several steps, as:

  • At first, outcome-oriented client interviewing will be noted by selecting the interested participant by choosing the higher-ranked employees who make promotional decisions.
  • Focusing outcome requires the use of a moderator for accepting valuable and rejecting unnecessary information by a true judgment of participant intention of using service. Distinguished requirements are elements of measurement and desired level of improvement. After, the conformation of the translation will occur.
  • Outcome organization means charting out the possible results by eliminating carbon copies and categorizing them into groups related to each step. Overview of this list will be helpful for ABC to calculate how the clients estimate value.
  • Next, a quantitative survey will be conducted in which a panel of selected companies, like- Toyota, Land Rover, and Ford will be asked to rate the conclusion regarding importance and satisfaction. A popular mathematical method namely opportunity algorithm will be applied where a ten-point scale will be used to measure the essence of ads and the equation is – Importance + (Importance – Satisfaction) = Opportunity;
  • Finally, that data will expose the service opportunity in concept development, effective segmentation, and the making of competitive analysis for introducing jump-start innovation.

Value required

Communication plan

The communication plan is an ultimate outcome of 4cs from 4ps of marketing mix where the purpose is to effectively communicate with customer solution, cost, and convenience for purchasing a service or suggestion from ABC. It will be interactive which entails a huge opportunity for clients to make dissatisfaction or suggestions. Here, objective identification is necessary while ABC will assume on buyer- readiness stages, as:

Communication plan
Figure 7: Communication plan
  • Diagnostic strategy: It will entail on a certain prospect that is affluent to be convinced where the agency will target higher scope of conviction. Although the clients are not fully conscious of their need for ads, ABC will make a good diagnosis with differentiated professional efficiency.
  • Communication strategy: In making conversation with customers, our salespeople will show their linguistic skill, appearance, presentation, and persuasion capability.
  • The diagnosis mindset: This process will be helpful to become the car producers as strategic partners of the agency by doing with and doing to them. 5 attributes and consequences that it can bring for our agency are-
  • Value relevancy: By value relevancy, ABC with linking the dots. That means, different services of the company will be connected with specific problems of the client, like- a problem of poor response to the existing TV ads can be diagnosed by reformulation with famous celebrity endorsement. This process will engage different functions and levels by creating a value web as identification of most influential personnel, like- marketing manager, showing of proof at the absence of our services and an indication of solution.
  • Change leadership: Braun et al (1997) argued that change in leadership means fully understanding the negative outlook of the car companies regarding ads, designing a solution format to change this attitude from negative to positive in order to invest in ABC Ad Agency.
  • Mutual self-esteem: In generalizing self-esteem, the agency will have to prepare a perfect quote, demo, or proposal relating to the delivered solution of each individual company.
  • Mutual self-interest: Mutual self-interest will secure both the client’s goal of generating more customer traffic to the branded cars and the agency’s goal of gaining profit with approval.
  • Emotional maturity: Emotional maturity will be protective in times of threats and pressure when ABC will have to deal with client’s complaints patiently.

Conversation implementation: Successful conversation results can be implemented in the following situations:

  • Thull (2006, pp. 89-153) mentioned that CMO or Marketing managers are typical personnel who decides to take help of commercial ad services with their greater influence on own self or top sales personnel for making such decision. They are also influential for the final value proposition and achievement by the users of the car. However, the sales segment of a car company is an actual sufferer by giving out an opportunity to make better sales than before by communicating with a final car purchaser about new car models to make them delighted.
  • Therefore, ABC will be inclined to keep regular conduct with them.
  • By using various cognitive approaches will clearly inform them about the complete feature.

By using white papers, the agency will supply scientific information about its services with marketing communication for initiating contact, justification in buying decisions, and catching attention. ABC will serve a specific pattern of white papers as below:

  • Business benefits white papers to the ad decision-makers of the industry to show the agency advantages and projected solution.
  • Hybrid technical papers will be submitted to convince both persuasion groups and decision-makers describing the technological implications of media streaming or creative ads.

Value leveraging: It will promote values in terms of capabilities, requirements, and missing values through positioning and perspective.

Uses of value: It considers:

  • Perfectly measuring present costs of ads for an assurance of achieving the best outcome;
  • It concentrates guidance to improve ad functionality.
  • Better activity;
  • More market share.
  • Recognition of opportunities in increasing revenue;
  • Removal of waste;
  • Breeding cash flow by cutting expenditures.
  • Investment opportunity.

Therefore, all those projected values are capable to implement in both the service level considering service and performance intensity and process level.

Value expected

Value expectation consists up of some integral parts, as:

  • Overcoming value gap: It is a solution stage to adopt burden of proof that incline the act as an expert. It is a distance between our thought of delivering value to the manufacturers and its desire to make payment along with a chasm between them for the expected values. Selling is one solution when the clients will be finally persuaded to buy our services.
  • Absence of value: It will be resulted in higher total costs on advertisements, overlapping projected clients and ineffective ads, which will create scopes for competitors.

As a result, missing value sources and uses that we will offer, clients will continuously waste a greater amount of money on ads with less idea on success. As a result, their overall flow of cash will be diluted.

Value achieved

The CRM process of ABC will consider as –

Keeping big customers: It will spend less time to find out and persuade prospects who will have a lesser chance to become a partner and offer various regular and after-sale services to the actual and affordable industry players, like- Toyota, Ford, Nissan, etc.

Toyota production system and adoption of SCOREThe lean production technique of Toyota involves –

  • Visual control program is used to show the clients each beat of our functioning associated with related graphics and information.
  • Using updated technology for media planning, execution, and pre-tested techniques for serving people.
  • Value addition by internal and external development of personnel;
  • Development of organizational leadership.
  • Well treatment of external suppliers.
  • Decision-making by agreement with a broader consideration of all issues and apply those rapidly.

However, armed with that upgraded module, ABC will find their customer segment termed with such characteristics, especially the company Toyota. Therefore, it can be said that it will also be both most interesting and complicated for ABC to offer and tune value for the Australian car market.

Further, to make additional sophistication in building buyer-seller ties, ABC will try the popular SCORE program of Chrysler enterprise by which almost all the players in the car industry will be benefited by taking various services to form ABC. Such as tracking record or intimacy, the realization of agency profit, measurement of the difference between actual and desired performance, anticipated relationship of business deals, trust, cooperation, and substantial functionality in the context of contact. Under this SCORE technique, companies can assume that a minimum of 50% of their original expenses of ads will be saved in terms of sales. After, those benefits are measured in SCORE by the removal of costs. Although the overall ad expenditure seems to incur a greater cost for companies, with this measurement, they will understand how the short-term advertisement costs can increase their long-run sales volume by reducing relevant costs of the supply chain. Here, the agency is motivated to submit design-oriented proposals, sourcing, managing, and disseminating materials, productive functionality, agency practice, TQM, and application of the “lean production” technique for a lower price. So, all of those factors are influential for the company for making up good private channeling and network support from both the agency and client perspective.

Problems

  • JIT system is a matter of crisis for some instances.
  • For operating a successful continuous improvement program, self-motivation is very much essential which lacks in many employees.

Regard for next process

Forthcoming activities of the agency will be committed to building upon strong personnel and removal of all the weaknesses after conducting feedback through a survey or some other means of research.

Six-sigma (6- σ)

Six-sigma can be used at ABC as a quantity indicator, which will remove defects in the ad generation process along with explaining how a process will perform. Within ABC, the Quality Manager will be liable to symbolize the client’s demand and improve its overall operational capability. MBB or Master Black Belt will implement to perform some specific areas like- communication, branding, etc. Similarly, PO or Process owner will be responsible for each client company’s order. Black Belt or BB acts on the main theme of this initiative by providing full-time effort for the completion of a project.

Conclusion

Like the B2C market segment, B2B is also becoming highly competitive day-by-day for what planning for the formulating and functioning of an independent advertising agency will be helpful to save the time of the intended car market. To handle their entire marketing and branding policies, sales promotion, prevention them from a greater chance of wastage of resources or correctly measure the effectiveness of their delivered advertisement especially for the automobile industry. Similarly, combining all the discussed elements for making exceptional sales to the B2B partners can expect to be profitable for ABC associated with perfect regulation, management, and integration.

Reference

Anon. 2009. Top 25 U.S. Agencies Ranked by Revenue. [Online] Web.

Braun, J., Guthrie, M., McCampbell, E. & Sit, V. 1997. Chrysler Corporation: Innovations in Supply Chain Management. [Online] 2009. Web.

Gembutsu Consulting. 2009. What would Toyota Do? Toyota Production System TPS. [Online] Web.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. 2001. Strategic Management. 4th ed. Singapore: South-Western Thomson Learning.

Hisrich, R. D., & Peters, M. P. 2006. Entrepreneurship. 5th ed. New Delhi: Tata McGraw- Hill Publishing Company Limited.

Kotler, P., & Armstrong, G. 2006. Principles of Marketing. 11th Ed. New Delhi: Prentice-Hall of India Private Limited.

Lunn, S. 2009. Ad agencies net phantom feedback. [Online] Web.

Stutely, R. 2007. The Definitive Business Plan. 2nd ed. Financial Times Prentice Hall.

Thull, J. 2006. Exceptional Selling: how the best connect and win in high stakes sales. New Jersey: Wiley. [book] 2009. Web.

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