Business to Business Marketing: of Ingersoll Rand - Case Study Example

Ingersoll Rand The focus of an organization’s marketing approaches must be centered on the and business marketing must be focusedand targeted (Hutt and Speh, 2000:6). Hence, keeping this factor in mind, a fully demarcated organization appears to be best suited to serve the Company’s interests in so far as effective marketing is concerned. Through demarcation and effective market segmentation, it becomes possible to effectively allocate the Company’s forces to specific market segments. According to Hutt and Speh (2000:7) a market segment may be defined as a “group of present or potential customers with some common characteristics which is relevant in explaining (and predicting) their response to a supplier’s marketing stimuli.

” Applying this for example, in the case of marketing of its compressors to other businesses, the buyers of heavy compressors have detailed specifications for the machines and are approached by the direct sales force that can respond effectively to their complex sales requirements. In the case of business to business marketing, only a small portion of the advertising budget needs to be committed to advertising through means such as direct mail and also through advertisements in trade journals.

(Hutt and Speh, 2000). However, while advertising may be limited, it could help Ingersoll Rand to set up successful sales calls and effectively market its heavy compressors through direct sales inquiries and calls. Thus is can access this segment through its direct sales force, while smaller compressors are effectively marketed through distributors since they can be marketed off the shelf. Demarcation allows for territory between distributors to be well allocated, so that future confusion can be avoided which may lead to legal issues.

In the event that such areas between distributors are not well demarcated, then it may lead to conflict as one channel tries to reach into another’s territory to get business. However, the disadvantage with demarcation is that it fails to effectively manage the tacit knowledge that is generated within the organization, which is one significant advantage of an integrated approach (Busch and Richards, 2003). An integrated approach also allows for effective total quality management and the development of a unified policy that would be applicable across the organization.

However, when this is applied to Ingersoll, it may be noted that there is already an attempt being made within the organization to integrate through the Full Partner Program which may in fact be escalating the cost of marketing by duplicating commissions payable to sales personnel and distributors. While business to business marketing should generally not involve such a huge cost outlay, since cheaper methods of advertising such as mail order can be used, the advantages to be gained in this will be negated through the continued Full Partner Program.

While the integrated approach may help to eliminate competition between the various units, which could be a disadvantage in a demarcated organization, the greater efficiencies in terms of costs that can be achieved favor a demarcated approach. Territories will be clearly demarcated among distributors and there will be less scope for disputes. Moreover, through market segmentation, different branches of the sales outlets can target different groups of customers in order to more effectively satisfy customers and respond to their unique needs quickly and effectively.

Hence a demarcated organization is recommended in the case of Ingersoll Rand. References:* Hutt, Michael and Speh, Thomas (2001). “Business marketing Management – A strategic view of industrial and organizational markets” (7th edn) Harcourt College Publishers* Busch, P and Richards, D, 2003. “The implications of tacit knowledge research for Organizations”, Journal of Business and Industrial marketing, 18(1) : 6-21