Managing Change in a time of Economic Slowdown

chillibreeze writer — Pranoti Sheldenkar

This is the era of improvisation. As the economic slowdown necessitates a tightening of the belts and wallets, it becomes increasingly important for everyone – individuals and companies alike, to innovate.

For the individual this has meant that having skills is not enough – there is a need to create a unique combination of skills which are not easily replicable. For corporate houses, this has translated into a need to operate beyond the conventional business boundaries and foray into newer, and often, unknown terrains.

A great example of this could be a company like Google – which started off as a vanilla web-search engine (competing with Yahoo and Ask Me), moved on to becoming an online repository of photographs (the ‘Kodak territory’) and has now come up with a G-drive which is challenging hardware companies. The Indian counterpart could be Reliance industries which has traversed a long way from petrochemicals to footwear.

Illustrations like this make it increasingly obvious that it is not enough to be “Few things to few people”, but is necessary to be a “Many things to many people”.

Even for the B2B companies, traditionally selling their wares to purchase/production managers are finding it increasingly important to embrace, if not lure the elusive end consumer. Intel can serve as a wonderful example of how having the buy-in of the end user can significantly and directly impact profitability. From a company which sells microprocessors – it is now a household name that has left the competition quite far behind.

Any company planning to make this transition needs to realize that the task is much wider than just creating a product or modifying the business spiel to cater to end consumers. The fundamental premise of the two types of businesses are so completely different that it calls for a seismic shift in approach right from management strategy to the operational minutiae.

For this, it’s essential to evaluate and take cognizance of the many differences between B2B and B2C products in order to formulate and execute an appropriately compelling business plan. (A caveat here, these differences refer to typical and not outlying products in B2B and B2C space.) The five main differences between B2B and B2C products are as follows.

1. Why does the product exist?
In the most simplistic sense, a B2B product is essentially exists for pain mitigation. There is a problem or a pain area – whether it is a machine that is not efficient enough, or another that guzzles too much power, a process which is unwieldy or any other problem which essentially needs a solution – THAT is where the B2B vendor comes in to provide a better or a more efficient way of doing something.

A consumer product on the other hand starts at the other end of the spectrum – it is a POSITIVE enhancement to the end consumer’s life – a product which makes the quality of life better, more luxurious, more comfortable...

This necessarily implies a approach which is nuanced in the manner in which the product is perceived – a soap which cleans faster – might not necessarily be the right spiel to give to the end consumer.

2. How is the product developed?
One of the most interesting differences is the process of conceptualization of the products in B2B and B2C. The product in the B2B space comes into being by a process which is essentially an “inside-out” approach. There is an accumulation of a continuous scientific body of knowledge which leads to better technology and a better way of doing things. Because these products are knowledge and science driven as such, they tend to be completely global and boundary less and can be easily replicated at any part of the world.

Consumer products on the other hand, evolve from a much more “outside in” developmental method. A consumer product comes into being as the outcome of the socio cultural trends and the forces operating in the market. Trends, fashion and societal change is not a continuous or cyclical process – thus consumer product development tends to be much more intermittent than business products. Thus consumer products can often be harnessing two different trends rather than any fundamental technological progression – a Nike Plus rode on the fitness AND iPod trend to come up with a unique new product.

3. How is the product sold?
The sales conduit is also significantly different – while to say that it’s completely relationship based might be a fallacy, the fact remains that the “selling” and “relationship” component is significantly more important in a business scenario. The hot buttons required to convert a business buyer needs to be necessarily different depending on the business imperatives of that particular buyer. Thus knowledge and relationship plays a focal role. A good sales representative can thus make or mar any transaction in the B2B space.

Consumer products however, are sold on a completely different paradigm – the “pull” philosophy rather than the push since it works on a mass produced, volumes game than the more restricted business products.

4. How are the buyers different?
A business buyer, is purchasing a product for a specific function, he is accountable for the purchase and needs to show a direct cost and benefit relationship. Thus the purchase tends to be more planned and more rational then the case of an end consumer – where it’s typically more spontaneous.

Of course there is a business to consumer continuum which shades which overlap – a consumer buying a high ticket functional purchase would have a significant amount of rational motivations as conversely a Business buyer would also have some “human” motivations of not wanting to err in the decision and so on.

5. The selling philosophy:
Since the buyers approach the entire process from differing world views, it is necessary to modify the selling approach to be in line with the world views. Business products would typically necessitate an “editorial” approach – viz. information heavy, rational arguments, facts and figures. Consumer marketing on the other hand, requires a more “advertising” approach – significantly softer, touchy feely and emotional.

The underlying assumption of course is that former is led by the ideology of rationality. And I use the term ideology on purpose – it’s a misconception that business purchases are completely rational – a purchase manager evaluating two equally attractive alternatives – with only one difference – a known entity versus a new player, which one would he chose?

But the fact remains that the business product sales approach needs to LOOK and SOUND rational rather than the overtly emotional approach which works well with end consumers.

While there are many other variables which can impact the success or failure of the business plan, being aware of these differences can have a significant impact on the way the production strategy will be formulated and implemented and consequently on the success of the migration.

Chillibreeze's disclaimer: The views and opinions expressed in this article are those of the author(s) and do not reflect the views of Chillibreeze as a company. Chillibreeze has a strict anti-plagiarism policy. Please contact us to report any copyright issues related to this article.

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—About our writer: Pranoti is a Brand-Strategist (Beta) and a Marketing Communications professional. She holds a Master's degree in Management, has spent most of her professional life as a Strategy Planner in advertising agencies in Mumbai, and is now is in the process of setting up a small brand consultancy in Pune. She is a part-time philosopher, an obsessive people watcher, a full-time bibliophile, an amateur culture & mythology sociologist and an advertising & social media enthusiast. Writing is her addiction, her passion and her escape. She is an avid blogger is eagerly waiting for the day some publisher will land on her blog and run screaming Eureka down the cyber highway.

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