Business to Business Marketing (Salvador vs Cholula)
...ecipe that's over 100 years old. This recipe blends pequin peppers, red peppers and spices in a delicate process that produces a perfect balance between flavor and heat. The company chose the name Cholula after the 2,500 year old city in Mexico. What was started as a small business soon gained international acclaim. Bottles of the zesty, delicious hot salsa sauce began popping up in kitchens all over North America. It did not take long for chefs and consumers to discover the unique flavor that Cholula brings to every recipe. Cholula's fans are a diverse crowd, ranging from rock stars and professional basketball players to presidents and world renowned chefs. 5.0 Market Research Market research is any activity aimed at understanding the behaviour of consumers (whether they be industrial (companies) or end users (consumers) in a certain market) www.asiamarketresearch.com A ¡°market¡± is influenced by a multitude of economic, social, psychological, cultural, legal and political factors. Any of these factors can influence the behaviour, (including purchase behaviour) of a set of defined consumers in a defined market. Market research can include broad analysis of a market as a whole such as feasibility research and estimation of market growth, or specific analysis products, product classes or target/subgroups within a market. 5.1 Business to Consumer Marketing (Cholula) B2B and B2C marketing satisfy their respective customers¡¯ needs and wants in different ways. (www.pearsoned.co.uk) B2C product development is driven by fashion and trends. B2C purchases are personal and more impulsive. (please refer to appendices 3) Cholula has targeted chefs and housewives as it main consumer groups to sell their products to. We can easily find cholula salsa sauce on top of the supermarket shelf all over north America. Besides that, Cholula also has a few retail shop of its own to market its products to the consumers. This is because besides salsa sauce, the company also sells a wide variety of edible goods range from jam, butter to hot sauce. Consumers normally buy in small quantity and the packaging is one of the most important factors that attract the consumers to buy. Cholula's fame has moved beyond its flavor. Over the years, Cholula's intriguing packaging and patented wooden cap has also become a quality icon, a status symbol recognized by millions despite its taste that had attracted many customers to have a taste of it. Cholula developed the wooden cap and custom bottle shape to represent the care and quality tradition of Mexican artisanship. Cholula has even hold annual contests where creative woodworkers carve images into Cholula caps as an advertising campaign to attract more consumers. Recently, Cholula has updated itself to globalize, bringing itself to the next step. Cholula has setup its own internet webpage and online ordering for a more secure and convenient shopping for its consumers. Consumers can now purchase Cholula salsa sauce through internet with just a click away. Currently there is a 62 percent growth in the salsa sauce business, but with the help of the advance technology, it is estimated that the potential growth rate will increase up to a total 85 percent. In order to make this happen, besides with the help of internet, Cholula will also have to put more effort in its promotion strategy. This is because by only capturing and maintaining a customer¡¯s loyalty, Cholula will then be able to make repeat sales. This will be the key to success for Cholula in the business to consumer marketing segment. 5.2 Business to Business Marketing (Salvador¡¯s) Business customers and traditional consumers do not buy the same way, they are driven by different impulses and respond to different approaches. Business buyers behave differently. B2B product development is driven by technological progress. B2B purchases are often a considered, group decision. (please refer to appendices 3) Salvador's has targeted three main customer groups to sell their products to. The first group is grocery stores. The grocery stores will then sell directly to the end consumer. This segment is growing at 75% and there currently are 53 potential customers. The second group is wholesale distributors. This segment has a 100% growth rate with 5 potential distributors. The last customer segment is restaurants which have a 45% growth rate. These three groups are equally important to Salvador¡¯s in its business to business market segment. With the help of advance technologies nowadays, it has help Salvador¡¯s business in the B2B segment to grow. EDI (electronic data interchange) system has proven to be a very effective and efficient system to overcome stock shortages issues. EDI has made Salvador¡¯s just in time (JIT) delivery possible. This has strengthened the relationship between the wholesaler and Salvador¡¯s. Business to business marketing is so different than the business to consumer marketing due to four factors. (please refer to appendices 1) The wholesaler will need a longer and more complex decision making process as the purchase involves huge quantities. Salvador¡¯s will have to give some price advantage for the wholesaler who make large purchases to maintain a good relationship because they are not one time customers. 6.0 Differences in B2B Market and B2C Market Characteristics The differences between B2B market and B2C market is that B2B market¡¯s clients are organisations rather than individuals. They have fewer clients compared to B2C market. Their clients are larger and their demands are more concentrated. They are derived demand, they depend on the clients to buy the end product. Therefore, the life cycle of customer firms do matters for company doing B2B business than company doing B2C market. That also means that market consists of a chain of relationships, manufacturers have to give discount, maintain good relationship with the retailers. Besides all that, customers from B2B market have different buying behaviour. Before they can make any purchases, they will have to make a group decision. All the process of buying has to go through formal procedures. Products bought by customers in B2B market are not like those in B2C market, they are based on function rather than perceptual or emotional. Last but not least, the B2B market is less culturally sensitive. 7.0 Differences in Marketing Mix 7.1 Product Although both Cholula and Salvador¡¯s are selling identical products, but the process of purchasing is totally different. Salcador¡¯s consumers ranged from retail stores and restaurants, this means they buy in bulk rather than one or two. On the other hand, Cholula¡¯s consumers are available everywhere, but they buy in very little quantities. 7.2 Price Salvador¡¯s product selling price will be much more cheaper compared to Cholula. This is because Salvador¡¯s customers buy in bulk and on top of that Salvador¡¯s will have to give them discount to maintain a good relationship. But Cholula is different, it can sell its product according to its preference, and the price may fluctuate because the consumer may only be a one time customer. The higher they sell the more profit they will get. Price factor is equally important in B2B and B2C marketing as price will affect the decision making. 7.3 Place Here the channel of distribution is not much different, both products are sold in retail stores. Only the method of getting there is different. Since Cholula has its own distribution channel, Cholula can avoid markup selling price by selling in its own chanel distribution. Salvador¡¯s product on the other hand has to go through a few intermediaries before reaching to the end users. This will cause the end product to be much more expensive. 7.4 Promotion There is not much promotion for Salvador¡¯s to make since it is selling its products to retail stores and restaurants. The only promotion is to give out broachers to its potential customers. On the other hand, Cholula¡¯s promotion strategy will be the most important factors for its survival. This is because without any advertising campaign, nobody will know their products. The only way to reach their customers fast and easy is by advertising their products on television, newspaper, magazines or radio. Promotion plays a very important part in the B2C marketing. 8.0 Budget Budgeting can result in disharmony, fighting and even long-term feuds. Yet with...