1. Business-to-Business Marketing Key Account Management
Haas School of Business
UC Berkeley
Fall 2008
Week 10
Zsolt Katona 1

2. Managing Business Customers
Differences from B2C
Fewer customers
Focus on relationship and process benefits
Can charge different prices
Big differences in sales volume
Cost to serve may differ across customers 2

3. Basic Steps Segmentation of customers
-Size
-Industry
-Other (CEO role, competition, etc.)
Distribution of customers (e.g. size)
-Only one customer
-One large customer + smaller ones
-A couple of large ones + smaller ones
-Many similar customers
Evaluate each segment’s profitability

4. Response curve (one account)
margin
Budget 4

5. Serving two Accounts
Account 1
Account 2
Budget 5

6. Smaller Total Budget
Account 1
Account 2
Budget 6

7. Budget Constrained Allocation
Marginal profit should be the same for all accounts
Smaller accounts are more costly to serve
More focus on large accounts
But, if there is competition
Each supplier focuses on large buyers
It might be more profitable serving small accounts 7

8. Wesco takeaway Segmentation of customers
Profitability in different stages of implementation
Importance of previous relationship
Allocation of sales force (key account managers)
Applicable to different types of firms (not only distributors) 8

9. Industrat 9

10. Prediction Market 10