Laura Sofia Kousa
Marketing Excellence: CISCO
1. How is building a brand in a business-to-business context different from doing so in the consumer market?
Business-to-business marketing differs greatly from consumer marketing. A lot of companies are either or, but Cisco tried to attain both. “Cisco is a pioneer company in providing networking equipment for the Internet. They sell hardware, software and services for Internet work.” (Kotler and Keller, 2016). Cisco started out as a brand selling business-to-business, but wanted to expand, re-segment and gain brand recognition as a brand selling to consumers as well. When marketing to customers as the consumers, the customers are the individuals that make the final decision to purchase a product. Marketing towards an individual customer base is done to impress the customers. In Cisco's case, the individual customers can be considered millennials or young people who have a strong technology base and a need for creative marketing. They want businesses to form relationships and appeal to their emotions. When marketing to consumers, companies opt for mass media or advertising options. Consumer marketing is targeted throughout different demographic, geographic and interest groups at a larger proportion. Often, consumer marketing targets sales through major retailers, which removes the personal connection that business-to-business marketing usually has.
In business-to-business marketing the decision-making unit is a lot larger than in consumer marketing and consists of different people for each step of the decision making process. Gatekeepers are the ones who have the power to prevent sales or information reaching the buying center. An example of this in Cisco's case would be a receptionist in another company who forgets to transfer the call to the buyers. These buyers are the ones that have formal authority to select who to buy from. Deciders are usually responsible for making the final decision. They are the ones that place the final order. On the contrary, influencers are the ones that have a persuasive role in relation to the deciders. In Cisco's case this could be a consultant in another company that will help the deciders make the final decision. Finally, there are the users, who are the final consumers of the product. This would be employees of the firm who are using Cisco's networking equipment. The users have a highest impact on the post-purchase evaluation of the product.
Business-to-business marketing is a more direct approach that uses very specific channels of distribution. The relationship with the consumer, the other business, is very personal and requires involvement from both sides. Business-to-business marketing targets the decision makers, ones who represent the company and the businesses as a whole. A business to business marketing decision usually involves more than one decision maker, for example board of directors.
2. Is Cisco's plan to reach out to consumers a viable one? Why or why not? Explain what type of strategy Cisco is using.
In Cisco's case, when it is trying to transition into a consumer based marketing company, it is faced with intense competition from similar brands. “During the 1990s, Cisco acquired and successfully integrated 49 companies into it core business, growing its market capitalization faster than that of any company in history. (Kotler & Keller, 2016).” Their business-to-business brand awareness was at its highest. “The company's market capitalization grew from 1 billion to 300 billion from 1991 to 1999, which was faster than any company in history at that time.” (Kotler and Keller, 2016). They attained business-to-business marketing really well. “The company went public in 1990 and by March of 2000, Cisco was the most valuable company in the world.” (Kotler and Keller, 2016). Even though Cisco had a lot of monetary value, the company had low brand awareness. A lot of consumers weren't sure what the company did. So, they wanted to gain awareness by segmenting into consumer marketing.
In CISCO's case, the individual consumers are the techy millennials, whose target segment is one of the most diverse. This means that their marketing strategies need to be creative and catch attention. In this case, Cisco is using a push strategy, where they are taking the product straight to the customer through any means and making sure the customers are aware of the brand. Cisco had a viable plan to rebrand so they were able to compete in a new market. In order to stay competitive, Cisco had to make branding changes to build brand recognition and value in the eyes of individual consumers. One of the things it did was it partnered up with Sony, Matsushita, and US West. Just having the Cisco logo on other companies' modems gave me recognition from consumers. Also, Cisco used television to advertise and gain brand recognition. At the time, network TV reached a large segment of heterogeneous consumers from different geographic, demographic and interest groups. They even introduced a new slogan, “This is the Power of the Network” to catch attention from consumers. Cisco's multi-channel marketing efforts was able to gain brand awareness from consumers ranging with preference and interests and made the company's market cap exceed 118$ billion in 2014. In Cisco's case, the brand segmentation worked and the company was able to gain brand awareness outside of businesses through a strong market strategy.
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