2. Dealing with Value Chains

Suppliers are aware of the power and influence of downstream customers. Still, this awareness of derived demand effects does not bring change in suppliers’ marketing programs automatically. They accept derived demand as an inherent characteristic of B2B markets and feel that it is outside their control. They consequently restrict their customer horizon to the nearest set of buyers and pursue push marketing. Meanwhile others genuinely try to deal with the consequences of derived demand. But instead of mapping the whole value chain, they focus on the downstream stages of the value chain and rely on pull marketing. A small number of suppliers try to pursue VCM to encounter the complexities of a value chain and to reduce their dependence on derived demand. A central part of VCM is that suppliers analyze and properly understand the players and their relationships on each level, the industry developments and drivers, as well as the government regulations. Next, supplier firms intending to practice VCM will need to tailor their marketing mix, i.e. strive for the right marketing elements to expose novel ways of stimulating a strong demand pull in B2B markets. As a final point, suppliers have to organize for VCM by considering four critical elements: sourcing the talent, adapting the firm’s mindset, forming dedicated organizational units, and gaining the top management support.