Category: Influencer marketing

B2B Marketing of Commodities

by admin

B2B Marketing of commodities, especially building materials, is distinct from retail marketing in that in B2B marketing, the company sells directly to a large buyer like a developer, commercial organization or government for building a commercial space, factory, warehouse, public building, infrastructure, etc. Purchase decision is often after vetting the options in the market and involves inputs or influence from several stakeholders.

A few stakeholders or influencers in B2B marketing are Architects & Interior Designers, Builders & Developers, Project Management Consultants (PMCs), specialist consultants like structural consultant, facade consultant, etc. and Government officials (for Government funded constructions).

Types of B2B marketing of commodities

Broadly, two types of B2B marketing of commodities happen in an organization.

Project specific pitch: The sales person has information of an upcoming project and he wants to influence the stakeholders to use his/ her company’s material. The sales person will start from one lead and try to gather information about all the influencers and decision makers for the product and try to get appointments with them. Project specific products are only discussed. It is explained to them how the product can contribute to making construction cheaper/ faster, more energy efficient building, aesthetically improved look or improve in some other pain area. If needed, samples are sent or mock-ups are done for the client to get the touch & feel and to do any performance test.

The sales person, often needs to be accompanied by people in technical or manufacturing department from his company where the usage of the product is not straight forward and needs some designing activity or change in manufacturing process before supply. Feature – Advantage – Benefit (FAB) framework is an optimal way to pitch for a specific project.

General influencer marketing: This is like sowing the seeds for future crop in B2B marketing of commodities. In-house presentations, sample delivery, get-togethers, gifting to influencer, loyalty programs, etc. are a few ways used by commodity companies to impress the influencers and get leads of projects. Generally all the products available in the company relevant for the type of projects done by the influencer is showcased. The influencers need to be periodically met so that the recall for the brand stays in their minds. The discussion with the influencers can be on any relevant topic and internal trainings go a long way in preparing the salesforce for such meetings.

Apart from these, a lot of companies participate in events like trade shows, design competitions, award functions etc. so that at a single platform, they get leads for multiple influencers.

Value Proposition

Most salespersons when given an opportunity to present on their product, enlist all the benefits which their product offers, without knowing much about the customer preferences or project requirement. This often is like a wild goose chase and does not result in order closure mostly. In B2B marketing of commodities, it is important to know the customer needs and aim for achieving customer delight.

One of the better framework used in B2B marketing of commodities to show the value proposition of the product portfolio is Feature-Advantage-Benefit model. FAB approach is a data driven approach where the benefits are quantified to justify the price. It has to be preceded by a questionnaire to understand the customer profile, preferences and needs.

A second approach which can be used by salesperson, especially when the client has already decided or specified a competition brand is the Points of Difference model. In this, the focus is primarily on the superiority or exclusiveness in our brand vis-à-vis the competition brand.

In all the approaches, case studies of projects completed with our product and snaps of completed projects help in convincing the client/ specifier. In B2B marketing of commodities, it is very important to convince the specifier of long term durability or weather resistance of the product.

Trade Partner schemes

by admin

In the earlier post Dealer Incentives, we had discussed about the various types of schemes floated by the companies to increase the off-take by the dealers. The change in purchasing behaviour desired through these trade partner schemes has to be clear upfront. Then only they can achieve their objective.

Trade Partner scheme objectives

The desired objective of the trade partner schemes can be one or many of the following:

  1. Increase off-take of the product by the trade partner over several months, sometimes even more than a year. Generally targets assigned to each stockist or dealer is for a minimum 3 months period. The targets should be set up at least 5% or 10% or as per the company’s objective higher than last year achievement in the same period. Payouts are generally grand as incentive accumulated over the scheme period is high. It can be in the form of tours, gold, electronic items, etc.
  2. Motivate the dealer to stock up the product by the trade partner in a short span. This is often a special price scheme valid for a short span. Generally, there are slabs in trade partner schemes and payout is often in form of cash back or gift coupons. Sometimes, payout is in the form of product itself.
  3. Incentivize the dealer to purchase value added products or new products launched recently. These type of trade partner schemes are often the most complicated. The major portion of the incentive is on purchasing the new or premium products, and a nominal or no incentive on the existing/ flagship product. The companies often introduce incentive multipliers during the scheme period to further boost the sales of the focus products.
  4. Annual Turnover discounts to motivate the dealer to do business round the year and not switch to competitors. This is a volume-based discount. Objective is to motivate the trade partner to do business for the whole year. This incentive is seen by the trade partners as pure profit from the business as often they have passed on all other discounts to their customers.
  5. Incentivize a competition dealer to switch loyalty or to increase the shop share. Single brand outlets are given additional incentive by a few companies over multi-brand outlets. Sometimes the shop also gets incentive of it keeps the advertisement for a certain period of time. This is a short-term scheme to increase the shop share.
  6. Incentivize the channel partners if they bring other influencers to company fold. Companies track the sale activity through these new influencers. The tracking mechanism can be physical passbooks, mobile apps, physical coupons placed with the product, etc.
Trade Partner schemes
Trade Partner Incentives

How to make Trade Partner schemes successful?

Trade partner schemes can be made successful if there is proper planning done during the scheme formulation, enough engagement is built with the channel partners during the scheme period and satisfactory closure of the scheme is done. The scheme should have simple terms and conditions for the sales team to be able to explain it to the dealers and for the dealers to understand easily. Constant communication about the scheme or about achievement by the dealers helps in making the schemes successful.

Equally important is the closure of the trade partner schemes. The disbursement of the payouts has to be as fast as possible and with good transparency so that the beneficiaries look forward to the next scheme. Internally for the company, it is necessary that it analyzes what went right with the scheme and what went wrong and where did the scheme fly and where it was a failure.

A sample Loyalty scheme is attached for encouraging the channel partners to do business with the commodity company regularly as well as not to switch to a competitor.

Commodity-Loyalty-ProgramDownload

Wholesaler Promotion- How to achieve

by admin

Wholesalers are the first contact for the company’s for B2C sale. It is the wholesaler who pushes the brand to the retailers and other bulk consumers. He plays a big role in maintaining the price in the market. So, wholesaler promotion or motivation is an important task for the companies.

Why should commodity wholesalers be promoted

If a wholesaler is able to generate good business through a brand, he might also take steps to promote the brand. A dealer of my cement company was so happy with our services that to boost sales in his region, he got advertisement sign-boards installed, distributed Point-of-Purchase material to his retail network and conducted promotional meetings at his cost. A wholesaler will give a brand he trusts on credit to his retail network with confidence that his investment will not sink as the retailers will be able to liquidate the product. Same cannot be said for untrustworthy brands.

Remember, having quality wholesalers in the network reduces the effort of the company towards push sales and company can concentrate on creating a pull from the market. They can make or break a brand in the market. They are so closely associated with companies that often customers cannot distinguish them from the company. That is why wholesaler promotion is an important strategy element.

Wholesaler Promotion requirements

Wholesaler promotion needs to fulfill two needs of wholesaler from the brand point of view: monetary & psychological. Companies need to fulfill both these needs in their wholesaler promotion plan.

Monetarily the commodity brand should be as rewarding or better than the competitor brands. Only exception is when the commodity is having a good brand equity and despite lower returns, the wholesaler is able to quickly rotate his money and does not need to give material on credit in the market. Apart from the mark-up on the billing price of the company, the wholesalers also earn through the discounts and schemes run by companies.

However, if the company gives entire discount along with billing itself, there is a possibility that the wholesalers will pass it on to the retailers due to pressure to clear the stock. This will put a downward pressure on the prices in the market. So the companies pass on some discounts at the end of the year. This is not informed to the wholesalers initially and is an additional profit for him. Also, often schemes benefits are in the non-cash form like gold, white goods, vehicles, etc.

Psychological satisfaction is the second thing wholesalers look for when dealing with commodity brands. It is due to this reason that companies conduct competition for highest sales at district, state or national level as part of their wholesaler promotion plan. To encourage small wholesalers, companies often have various other categories, like highest growth, highest market share, etc.

Big wholesalers always want a treatment different from the smaller ones. A few big wholesalers are so egoistic that they do not like to stay in the same rooms as small wholesalers when the company takes them to tours. Companies need to be careful while handling such wholesalers. At the same time, the small wholesalers should not feel step-brotherly treatment. There should be an endeavour to reduce company’s dependence on the egoistic wholesalers.

A tertiary need of some wholesalers is the relationship building by the companies. Companies organize picnics, festival get-togethers, movie shows, etc. to allow wholesalers interact with company personnel in a non-business set-up. Company personnel personally give birthday and anniversary gifts to Wholesalers. Companies are trying to have formal systems to track this initiative also. Automatic messages are sent to local salesperson, reminding him of the birthday or anniversary of the wholesaler. On festivals or important occasions, greetings are sent by the company directly to the wholesaler or through the sales personnel. All these initiatives are taking wholesaler promotion to a new level.

Wholesaler promotion
Wholesaler promotion- How to achieve

Role of influencers

by admin

No industry will be so peculiar like building materials wherein the consumers’ decision is shaped so much by the influencers. The role of influencers like masons/ glaziers, engineers, architects, retailers, shop managers, friends, family members, contractors and star endorsers is immense, not to forget the influence by the wholesalers/ distributors. Their influence is because consumers do not know much about these products and there is no second opportunity for them to build a house. It should not come as a surprise if the mason is insisting on a specific cement or steel brand or the contractor is insisting for one paint brand.

The role of influencers is so high that companies are running incentive schemes for these influencers so that they promote their brand more often. Companies are sending the engineers & architects for foreign leisure tours, giving white goods to masons and shop managers and felicitating high sales volume retailers.

Role of influencers
Role of influencers varies with awareness level of end user

Role of influencers

Masons, glaziers, plumbers, electricians, painters etc.

Role of influencers, who have become specialists in their job, because of their know-how earned through years of experience, have a lot of clout among the customers. Their influence is higher in rural areas. As these people have worked with the commodities like cement, steel, pipes, cables, paints, etc., consumers think that they will provide correct feedback. Consumers often go against the other influencers and well-wishers’ advice to procure the brands suggested by this lot. Their influence reduces in urban places where they act on the recommendations of the contractors.

Contractors

Individual house builders are now-a-days outsourcing construction to contractors. Here, the contractors becomes the biggest influencer. The contractor recommends brands with which cost of construction is minimum or there is a special incentive for promoting a brand.

Engineers & architects

In urban areas, it is a trend to hire engineers and architects/ interior designers for house construction. These technical people often recommend certain brands according to the durability and design needs. Brands try to bring them under their loyalty fold by creating awareness programs for them and through referral programs.

Retailers & Shop managers

Role of retailers or shop managers appears at the point of purchase, especially if the customer has not come with a pre-determined brand in mind. They are often able to influence him to the brand which is most profitable to the store’s business.

Other influencers

There is another set of influencers like friends and family, and celebrities promoting a brand in advertisements. That is why we see that several actors and sportsmen now-a-days are advertising for cement, steel, paints, etc. The role of influencers varies with awareness level of end user.