Read the following about United Parcel Service of America (UPS) before completing this assignment.
Few brands are more familiar these days than UPS. Everyone pictures "brown" when they hear the name, or even the truck rumbling on their streets. What most don't recognize is that most of UPS's revenues come from business customers, not residential consumers. Its business is much more than shipping packages from business to business, or businesses to homes. UPS's core business is known as logistics; it is a $54 billion company that provides a broad range of global logistics solutions.
The company even brags in a tagline that "We love logistics." What that means to its business customers, is that UPS becomes a logistics partner, helping them to shape and sharpen their entire logistics strategy and operations, cutting costs and serving customers better.
To grow this business, UPS had to persuade its business customers that it absolutely wanted to be their partner and that they wanted to understand the experience each company tries to create for its customers. Without that level of commitment, UPS cannot provide value to its business customers. Business customer buying decisions are made within the framework of a strategic, problem-solving partnership.
The UPS story is perfect for highlighting the unique characteristics of business markets and the differences between consumer buying behavior and business buying behavior. It also demonstrates that marketing to business customers requires a deep understanding of customer needs and customer-driven marketing strategies that create superior customer value. To succeed in its business-to-business markets, UPS must build day in, day out, year in, and year out customer partnerships based on superior products, close collaboration, and trust.
Visit theUPS website (Links to an external site.)Links to an external site. to explore what UPS offer to business customers. Scroll to the UPS Solutions tab along the top. Start with "Explore" and then go to "Industries" to learn about what services UPS provide in various industries. Look for information on each that underscores the basic promise that UPS must deliver on each day: to create partnerships with business customers to help them move their goods more efficiently and reliably. Working in business markets is much more complex than in consumer markets, and closing a single sale may take years of advance work.
Directions
Answer the questions below on UPS's efforts to build relationships with B-to-B customers to handle their logistics and the impact on customer relationships. Your paper is expected to show research into the issues with clearly documented links to in-class and outside readings. The paper must be consistently formatted in APA style, APA in-text citations, and references included.
As a general guideline, the body of your paper, meaning your answers to the three questions below, is to be 3 to 4 pages (front page, possible table of contents, references, and possible appendix excluding). You might like to include separate chapter titles for each question. Please ensure that you cover all of the elements of the assignment and demonstrate your understanding of the given topic.
Don't forget to synthesize, analyze, and evaluate related ideas and issues. Short quotations from the UPS website can be used when appropriately indicated in the text and in-text cited according to the APA style, but you are not to submit a paper with the majority of its content copy-pasted from the UPS website.
Questions
The questions to be addressed in sufficient detail in your written submission are:
1. What are UPS's business customers looking for when committing to work with UPS? But more than just a superior product, they want a trusted partner that delivers on its promises. Business customers must be able to rely on UPS as a strategic partner they can count on to help the company solve its problems and win new customers of its own. As this case demonstrates, UPS providing logistics can mean it even gets into the laptop repair business.
2. How do UPS' marketing and sales to business customers differ from working with its residential consumers? Selling and marketing in either sector require a deep understanding of customer needs and customer-driven marketing strategies that create superior customer value. However, in business markets, rather than selling to large numbers of small buyers, UPS sells to a relatively few very large buyers. Losing a single sale to a large business customer can mean the loss of hundreds of millions of dollars in revenues.
Performing poorly as a partner in logistics can also cost the customer hundreds of millions of dollars in revenue. Also, with UPS's business customers, buying decisions are much more complex. UPS is not the only company in the business of providing logistical services to business customers.
Buying a batch of jet engines, for example, involves a tortuously long buying process, dozens or even hundreds of decision makers, and layer upon layer of subtle and not-so-subtle buying influences. To succeed in these business-to-business markets, UPS must do more than just move products from point A to point B for its customers. It must work closely and deeply with its business customers to become a strategic, problem-solving partner.
3. How does the UPS story relate to the major concepts of Kotler & Armstrong Chapter 6 on business buyer behavior? The UPS story shows the complexities of business-to-business transactions and relationships relative to final consumer buying. It provides an excellent vehicle for exploring the nature of business markets, types of buying situations, buying participants and influences on business buyers, and the business buying process.