Course Code: MKT525 Course Title: B2B Marketing

Course Instructor: Dr. Prashant Chauhan Section: Q1E50

Academic Task No.: 03 Academic Task Title: Online Assignment 3

Date of Allotment: 11/8/2020 Date of submission: 24/09/2020

Student’s Roll no: B08 Student’s Reg. No.: 11602921

Evaluation Parameters: (Parameters on which student is to be evaluated- To be mentioned by students as

specified at the time of assigning the task by the instructor)

Learning Outcomes: I have learned B2B marketing models adopted by IBM and their marketing
strategies through which they are still standing out of the box from their competitiors and are gaining good
profit.

Declaration:
I declare that this Assignment is my individual work. I have not copied it from any other student‟s
work or from any other source except where due acknowledgement is made explicitly in the text,
nor has any part been written for me by any other person.

Evaluator’s comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator‟s Signature and Date:

Marks Obtained: __________________ Max. Marks: ______________________

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 TABLE OF CONTENTS

Sr. No. Topic Page No.

1. Front page 1

2. Table of Contents 2

3. Introduction 3

4. Marketing strategy of IBM 5

5. Target market 9

6. IBM’s competitive dynamics 11

7. IBM’s product life cycle 12

8. Analysis 14

9. Conclusion 17

10. References 18

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 INTRODUCTION

International Business Machine Corporation (popularly known as IBM) headquartered in New

York, United States got incorporated on 1911 as Computer Tabulating Recording company
which later on changed its name to IBM on1924. IBM is one of the oldest and largest computer
companies in the world.

The company primarily deals in Hardware, Software, Consultancy services and hosting services.
IBM manufactures and sells computer hardware and software, offers infrastructure services and
provides global consulting services.

The company operates in five strategic business units namely Financing, Systems
and Technology, Technology services, business services and software etc.

Company’s Profile:

 International Business Machines Corporation (IBM) incorporated in 1880’s.

 Known as IBM only in 1924 under President Thomas J Watson.
 ‘THINK’ was their corporate mantra!
 Products include Customised Hardware, Software, Consulting, Customised software
solutions etc.
 Today, largest and most profitable IT company in the world with $103 billion in sales in 170
countries.

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ROOTS OF THE COMPANY:

 1910s to 1940s
IBM’s growth exploded, led primarily by sales of tabulating machines.
Established some of IBM’s most successful business tactics such as
exceptional customer service, knowledgeable sales force and a focus on
large scale solutions for businesses.

 1950s to 1980s
Worked with the government to build the air defense SAGE computer
system. Launched revolutionary computers called System/360, producing
approximately 70% of all computers.

 1980s to 2000s
 During the 80s, its market share and profits eroded as the PC
revolution changed the way consumers bought technology.

 In late 90s, it introduced the iconic ThinkPad, which helped

regain lost share.

TODAY IBM is the largest and most profitable information technology company in the world,
with over $165 billion in sales and holds more patents than any other US based technology
company.

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 MARKETING STRATEGY OF IBM

 Segmentation, Targeting and Positioning in the Marketing strategy of IBM:

IBM is in a varied line of businesses and amongst the leaders in the enterprise solution business
segment. It uses a mix of psychographic, geographic and  demographic segmentation variables.

Selective targeting strategy is used by IBM to make the particular product and services available to

their clients as per their requirement.

It uses user benefit based positioning strategy to position itself as a company which creates value
for its stakeholders across the value delivery system.

 Competitive advantage in the Marketing strategy of IBM:

The company is working in a highly competitive environment where it competes with companies

across varied segments of its businesses. Its competitors range from an MNC to small and niche
enterprises. The company competes on various parameters such as technology, consulting
services, research & development, pricing, quality, the range of products & services, IT
infrastructure, value delivery channel and many others. The company has been initiated to work
upon its strategy of shifting to higher value business segments and increasing its set of
capabilities through strategic acquisitions and investments.

Integrated Solutions: IBM offers integrated solutions and products to its customers that

leverage its deep expertise in varied industries and support from the broad ecosystem of its
existing businesses and strategic alliances.

Strategic Business units: Dealing in vast categories of businesses has helped the company in
being focused and competitively ahead of its competitors when it comes to providing an array of
solutions to the customers with the help of the interrelated businesses.

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Migration to higher technologies with existing resources: The most important key
differentiator on which IBM has been built is its ability to connect new & latest technologies
with the existing systems in the enterprises

Data Analytics: Proliferation of digital products & services, social mediums and technology has
brought a new set of opportunities for the company for data analytics. For seizing
this opportunity IBM has invested more than $30 billion in building its capabilities in data
analytics. One-third of its Research’s spending is on data analytics and cognitive computing.

Distribution strategy in the Marketing strategy of IBM –

IBM’s various functions such as Research, Development and Intellectual Property, Integrated
Supply Chain and sales & distribution network play an important role in IBM’s values delivery
system to its customer.
IBM operates in more than 180 countries with a team of client relationship professionals,
consultants, product specialists and fulfilment teams which are helping the company to not only
build a long lasting business relationship but also enabled them in sustainable business growth
and innovation.

Brand equity in the strategy of IBM –

IBM has been ranked 5th world’s most valuable brand in the Forbes magazine list. The brand has
been valued at $142.7 billion as of May 2020 (market capitalization value method). The Brand
was initially known for its hardware systems which over the period have repositioned as a
wholesome company offering IT and related services to the customers.

Market analysis in the Marketing strategy of IBM –

Emerging markets are the markets from where the resources are sourced in most of the business
segments in which IBM operates. Developing economies plays an important role in changing the
market dynamics of the industry. Factors such as labour cost, government regulations, political
stability, OEM’s (original equipment manufacturer), competition between the rival companies
are affecting the industry by and large.

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 Product Strategy:

Product Strategy is one of the very vital aspects of a organization. It must consider the

capabilities in terms of engineering, of production, of distribution (sales) prevailing in the

company and the future requirements. It must analysis the consumers’ requirements at the time

of delivery. It must anticipate the competition (including market penetration) and possible tactics

to enter the same market. Technology is another aspect which influences the production strategy.

Based on these factors the management should make best possible strategic planning for the

organization.

 Pricing strategy:

One of the aspects of the marketing strategy is price. It termed as an important strategic issue

because it is connected to product positioning and targeting. Apart to this , pricing influents other

strategic marketing mix elements such as product strategy, distribution strategy, and promotion

strategy. While there is no single method to finalize pricing, the there are several aspects which

influence the pricing. Demands, cost and market completion are some of these.

 Promotion strategy:

Promotion means circulate information about a product or product line, brand or company.

Promotion is mainly classified into two Above the line promotion and below the line promotion:

Advertise in the media (e.g. TV, radio, newspapers, Internet and Mobile Phones) known as

above the line promotion. All other type of promotions includes in other category E.g.

sponsorship, personal selling, public relations, endorsements, sales promotion etc.

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IBM’s Marketing Strategies

 Focusing on CORE competencies like LARGE scale customised Hardware and Software

production.

 Customer centric marketing campaign i.e ‘THINK’ campaign.

 Large R&D budget: $50 billion  Constant innovation with huge PRODUCT line.

 Target marketing strategies for segments.

 Focus on Quality for increasing brand value.

 Large scale contracts with Governments.

 Less outsourcing and own production to reduce costs and increase efficiency.

 Top among competitors in the Market. Directly competes with biggies like Microsoft, Intel,

Honeywell etc.

 Global outreach through various channels, offline and online.

TARGET MARKET

“IBM shakes up sales organization to target SMB market”

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Organizations are keen to enter a particular market area to create its own domination over the
competitors. This particular market is or customer group is known as segments. Based on
organizational situations the management will select this segment, where the company has to
play. The important decision in marketing strategy is selecting the segment is known as market
targeting.

IBM is realigning its Systems and Technology Group (STG), creating one sales group to sell to
large enterprise customers and another to sell to SMBs, business customers with no more than
1,000 employees. It will also better integrate STG with IBM's Global Technology Service (GTS)
group and with companies in its Global Business Partners Organization, and design products
specifically for the needs of SMBs. The changes were outlined in a memo released Thursday by
William Zeitler, IBM's senior vice president and group executive of STG.

Market Targeting concentrate on the following

1. Ascertaining particular customer demand. Product/service requirement

2. According to customer requirement the targeted customers are grouped into segments

3. Define each group or segments

4. Deciding the market segment to serve

Market positioning
Creating image or good picture in the minds of target customers known as Market positioning.
This is the loyalty and customer satisfaction towards the product or service which influences the
buying decision of the target customers. In order to create the awareness about the product or
service advertisement is the one important factor. Customer satisfaction will help to a certain
extend for creation good mentality towards the product.

IBM Strategy
According to IBM, The Company’s organization model is created to support two principal goals:

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 1. “In helping customers succeed in providing business value by transforming more
innovative, efficient, capable and competitive by the use of business ideas and
information technology (IT) solutions”
2. “Providing enduring value to stakeholders. The business model has been built over time
by means of strategic investments in potentiality and technologies that will bring the
long-term stability, growth and profitability. This goal will be based on customer value
deliver in the business. “The company’s strategy is to focus on the high-growth, high-
value segments of the IT industry”.

The companies have presence in global market and its capabilities include service hardware,
software, server, fundamental research and support. The company clients have been catered by
the help of these combined business capabilities. This will give a good customer satisfaction in
all area.

The IBM’s business model is very flexible and gives scope for periodic alteration and
rebalancing. The company has good commoditizing opportunities like personal computers and
hard disk drives, which give strength to its position in the global market through strategic
investments and acquisitions in rising higher value segments like service-oriented-architecture
(SOA) and Information on Demand. In above to that, the company has altered itself into a
globally integrated organization which has enhanced overall productivity and is dynamic
investment and contribution in the world’s fastest growing markets. Over the years as a result,
the company became a highly performing organization.

The business strategy is based on the company’s long-term organizational objective, backed by
the company’s long-term financial structure, enables IBM to deliver time after time higher
earnings, cash flows and returns on invested capital for stake holders even in changing economic
environments.

IBM’s COMPETITIVE DYNAMICS

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Competitive Analysis: IBM’s main competitors are Accenture, Hewlett Packard, and Wipro

Technologies.

Infrastructure Software: IBM’s biggest competitors are Microsoft, Oracle, and Amazon.

Hardware: IBM mainly competes against Oracle, Dell, and HP. Global Financing: IBM

competes with numerous small players.

IBM’s PRODUCT LIFE CYCLE

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 Introduction

Launched 1st product in 1880’s. Quality and innovation were its key focus points. Created a

market space for themselves.

 Growth

Customized software and hardware. Mass production with tie ups with various firms and

scaling operations. Expanding into various countries. Money on R&D.

 Maturity

More options with customers due to competition in the market. Ups and Downs with

revenues falling due to outsourcing.

 Decline

Global recession and increasing customer acquisition costs, focus on niche segment and

improve existing products.

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 ANALYSIS

 Analysis marketing strategy vs. organization strategy

As discussed earlier strategic decision is long term in nature. On strategic decisions repairing
level, all management decisions, especially marketing decisions are ideally guided by the
organization strategy. All Marketing planning and decisions are directly or indirectly connected
to end customers. When building a company strategy, the high-level management team will
consider the main aim and its connection with the end consumer. Company’s value propositions
to their product and service customers and the financial accountability and their value
propositions. Strategy originates from mission and planning. Strategic planning relates to overall
scope and whole part of the

 Analysis based on IBM Strategy

The IBMs organizational communication strategy says “fostering innovation and business agility
by making people easier to find reach and collaborate through a unified communications
experience. IBM makes it possible this challenge by giving an open and extensible software
platform other technology”.

 Market planning considering the Global context

Marketing strategy aims at target market and market positioning. The targeted market can be big
as well as small. Market strategy will be created based on how the target market and how they
are defined. Mass marketing denotes to marketing the product and service in the whole market. If
the company plays in the global market and it is a multinational company, the strategy will also
have an impact of global context. (Beamish & Ashford, 2007)

In the current business world the products and services for organizational clients and other single
consumers are coming from different foreign countries. This phenomenon, i.e. delivery of
service and products from different markets, is happening due to the process of international
marketing. All businesses are going to be competitive and aggressive now as well as in the
future; they should stabilize in these global markets. Achieving a stabilized position in the
international markets is a challenge for any organization. The process and strategies of marketing
in the international markets as well as domestic market are very important to create the market

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segment. It is crucial that we familiarize this situation and also ascertain the opportunities that
suitable and creative for the marketing strategies that can present in the required atmosphere

IBM has business in most of the foreign. Their one strength and importance is that they are
global service organization. When making a marketing strategy for IBM, it is unavoidable to
create a plan which considering all foreign market that means global market.

 E-business strategies in marketing – Reflection and evaluation

E-business strategy is defined as “the approach by which the applications of internal electronic
communication can support and influence corporate strategy”. This is a way of embracing of e –
channels by organization for some products and service or markets to best generate worth for the
organization according to the organization importance. E business strategy defines how an
organization accomplishes the value internally from exploring electronic network. Now all
business firms are considering an e-business strategy for its own requirement. The main cause
for this is due to non- accomplishment of some opportunities and from lack of measurement of
opportunities or insufficient resourcing of e-business initiatives. These will result in to more
savvy organizational competitors achieving a competitive advantage over the business.

 IBM e-business strategy in marketing

IBM always tries to identify the financial side of e-business and which helps the business firm to
find the different e-business strategy marketing opportunities by analyzing their net value effect.

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QUESTION:

Few companies have had such a long history of ups and downs as IBM. What were some of
the keys to its recent success? Can its plan to solve some of the world’s most challenging
problems succeed? Why or Why not?

Most important reasons for a turnaround for IBM:

 Continuous Focus on R&D

IBM believed in constant innovation in their products. With a R&D budget of $50 billion
dollars during 2000-2008, it always gave it an edge over others.
 Adaptive Marketing strategies
Using different channels to reach out to different customer segments. Adapting to ever
changing needs of customers.
 Adaptive business model
All business units into a single unit. New line of products and expansion into various
segments.

Apart from this the changing leadership made a huge difference in pulling IBM in its bad times.

Yes, IBM’s plan to solve some of the world’s most challenging problems will succeed. The
problems which IBM is targeting like:

- Better waste water management.

- Lower traffic congestion

- Collaborative health care solutions

Provides a huge GAP in the market, which can be a golden opportunity to tap into. Moreover
because IBM already has the resources to do so and with very less existing competition, they are
bound to succeed.

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 CONCLUSION

IBM is an organization which always gives importance to its clients. IBM helps its clients to

success in the business world by delivering innovative information technology ideas and

solutions. For this purpose IBM develops competitive organizational and marketing strategy. For

the organizational strategy process IBM as well as all other organization relies on information.

Marketing strategy is important and it develops based on organizational strategy. Now the world

becomes one and the boundary concept for the market is lost. So it is important that the

marketing strategy should be developed based on global context. It is important that the

marketing aspects have to be finalized also considering e-business strategies and channels.

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 REFERENCES

1. Beamish, K., & Ashford, R. (2007). Marketing planning 2007-2008. Elsevier.

2. Chaffey, D. (2007). E-business and e-commerce management: strategy, implementation and

practice. Pearson Education.

3. Galavan, R., Murray, J., & Markides, C. (2008). Strategy, innovation, and change: challenges

for management. Oxford University Press US.

4. Jain, A. K. (1999). Marketing information products and services. IDRC.

5. MarketingNews. (2008). AMA adopts new definition of marketing Marketing News.

Marketing News .

6. Product strategy. (2007). Retrieved from www.feb-patrimoine.com: http://www.feb-

patrimoine.com/english/corporate/product_strategy.htm

7. Sandhusen, R. (2000). Marketing. Barron’s Educational Series.

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