Platt Perspective on Business and Technology

Meshing innovation, product development and production, marketing and sales as a virtuous cycle 10

Posted in business and convergent technologies, strategy and planning by Timothy Platt on January 17, 2018

This is my 10th installment to a series in which I reconsider cosmetic and innovative change as they impact upon and even fundamentally shape the product design and development, manufacturing, marketing, distribution and sales cycle, and from both the producer and consumer perspectives (see Ubiquitous Computing and Communications – everywhere all the time 2, postings 342 and loosely following for Parts 1-9.)

I said at the end of Part 9 of this, that I would turn here to consider the issues of marketing and sales in the types of complex and multi-layered business-to-business contexts that I have been addressing here in this series. And I begin doing so by pointing out that I should have said “continue to consider” there, as I assembled that posting in large part around a point of distinction in which I parsed markets according to how businesses connect together in supply chain and other collaborative business-to-business systems. More specifically, I characterized markets as being direct or indirect, according to whether they represent the immediate direct markets of a business under consideration, or whether they are the markets of partner businesses that an enterprise works with and helps support through collaborative effort.

Let’s consider that from the perspective of the fundamentals; a business derives its competitive strength, and its overall viability as well as its profitability from how effectively it meets the needs of a marketplace and the consumers that comprise it. So ultimately, when a business benefits from the activities of the partner businesses that it collaboratively works with in supply chain and other settings, it does so because they perform in ways that enhance its ability to enter into productive transactions with its own direct customers and its markets, increasing its cost-effective ability to do business. Adding in indirect market support enhances that. So ultimately, that means that in a supply chain or related context, indirect market support can be as crucially important as direct market participation and support can be, and certainly when competition is fierce and even small incremental differences in cost-effective capability can make all of the difference.

I did not, at least entirely raise this point of distinction in Part 8 in order to address marketing per se. But I did in fact address at least the rationale behind it, or at least an understanding of the target that it would be directed at there. So what would I continue that line of discussion with here? My answer to that question is in fact fairly simple. I am not going to discuss specific marketing techniques or related details, but I will discuss marketing from a higher level perspective here for what it seeks to accomplish again. And I will begin that by parsing marketing per se in a second way:

• Consumer and end user-facing marketing, and
• Collaborative partnership-facing marketing.

First the obvious: when people speak and think about marketing per se, it is virtually always consumer and end user-facing marketing that they have in mind, and reaching out to buyers and potential buyers to convince them to purchase from their business and not from a competitor. That holds for efforts to secure and carry through on purchase transactions that are carefully considered from the purchasing consumer perspective, and for maximizing the business that they generate. That also holds for encouraging and securing as large a percentage of attainable impulse buy sales as possible too. And the first of the above two categories as laid out in my second parsing, is the face of marketing as a whole and to many. It is also incomplete, and particularly as supply chain systems and other collaborative partnerships bring meaningful competitive value to their member businesses, and as potential partner businesses would see value in joining and participating in the best possible, most effective-to-them business-to-business collaborations.

This makes a very different form of marketing important: marketing that would be directed towards securing entry into the most productive and beneficial supply chain and related systems: ones that hold the most promise for creating new and enhanced value for the businesses in them. And this marketing is directed towards achieving the best possible terms of agreement for those businesses that are accepted in, through contractual agreements with partner businesses there once they have joined.

• This is not just about becoming a participant there.
• It is about getting the best possible contractually defined terms of participation for the levels of business that would become possible through these systems,
• For the per-transaction costs and returns faced,
• And it is about the levels of exclusivity that would be agreed to by now-partner businesses, where a given participating business could be sure to capture at least some minimal percentage of their type of contributed business activity effort, for all of that carried out within that collaboration system.

This is where it becomes necessary to consider the partner businesses in a supply chain per se, and two perhaps-extreme case categories that can and do arise among them in the continuum of business statuses and business-to-business relationships that participants might fit into when facing each other:

Anchor businesses, that dominate the supply chain and other systems that they enter into, and
Support businesses, that provide specialized services that other participants need there, but that they would not be able to sustain and carry out in-house on their own and still be sufficiently enough focused and effective in how they use their financial and other resources for them to remain fully competitive.

The more of a support business that an enterprise is in its supply chain and related business-to-business collaborations, and the more direct competition there is for taking such a role and certainly with really desired anchor business partners, the more actively they have to market themselves if they are to gain and keep the added sources of value that supply chain participation can bring with it.

That, at least holds for support businesses that an anchor business would be more inclined to single-source products or services from. A pressing need for such marketing can evaporate where an anchor business would in effect take on all comers, as is the case for businesses that in effect sell what they offer to any and all other businesses as their direct market.

Think in terms of businesses such as Apple, Inc that do outsource the production of a number of specialized components that go into their devices, and the bulk of their Apple branded information content offered through their systems too. They in effect become either the sole purchasing client, or at the very least a major such client for the support businesses that they agree to enter into contract with. So potential partner businesses that Apple would take on do actively have to market themselves, and they have to negotiate terms of agreement with Apple accordingly.

Now think in terms of businesses such as UPS that provide shipping and related logistics support services to any and all takers as a perhaps quintessential example of an anchor business (for its scale and reach) that support businesses would not have to market to, particularly. And this is an example of where the contractual agreements signed, for example in managing a more supportive business’ office-to-office internal shipping (within a geographically distributed client business), would be more standard and boilerplated than anything else.

I have been discussing business-to-business collaborative systems for the last several installments to this series now, and with a goal of setting up a conceptual framework that I can build from, in discussing how innovation and its development fits into larger business systems and their contexts. I am going turn to consider business innovation, and particularly in its business systems and practices in a next series installment, in this larger context. And in anticipation of discussion to come, I will do so at least in part, in terms of markets and marketplace dynamics.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

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