This article concerns proposing B2B customer-driven marketing strategies for a software company, Statzon, to penetrate Nordic-Baltic Eight (NB8) countries’ academic segments following the subscription business model. In a more in-depth perspective, the study discusses the search engine optimization tactics regarding marketing strategies.

Authors: Shima Edalatkhah and Tiina Pernanen

To examine customer-driven B2B marketing strategies for Statzon, as market data and forecast provider, the research aims to enhance the number of subscribed users by figuring out:

• Statzon service Key Performance Indicators (KPIs) for NB8
• The potential competitive advantages that Statzon can provide
• NB8 penetration process
• Suitable pricing policy for NB8
• Marketing promotional strategies for Statzon

Research Methodology and Data Collection

After an Economical, Social, and Technological analysis of NB8 (table 1), a ten-question questionnaire was emailed to 273 subjects to fulfill the study goals. The survey subjects were library directors, vice directors, and the head librarians of NB8 universities as the authentic source for data collection. The collected result presents the demanded data categories in the NB8 academic segment, the KPIs of data service platform, the decision-making process, and pricing indications from NB8 academic users’ point of view. (Edalatkhah 2019)

Table 1. NB8 Economical, Social & Technological Analysis (adapted from WorldBank 2019)

Key Findings

According to the study results, Statzon’s biggest potential markets among NB8 countries are Sweden, Denmark, and Finland considering population, the number of academic centers, and the Research and Development (R&D) share of Gross Domestic Product (GDP) as shown in figure 1. (Edalatkhah 2019)

Figure 1. NB8 biggest Academic Markets

The research results indicate that the principle faculties in the target market are Business and Hospitality as well as Social Sciences and Technology. Based on survey results, the most popular data categories are Education, Finance, Health-Social work, and Manufacturing. The essential features of data service in NB8 academic users’ point of view are the variety of data categories, regular data updates, and downloadable visual data. Thus, it is recommended to Statzon to specify its core concentration on mentioned above countries, faculties, in-depth data categories, and the service feature at preliminary steps of market penetration phase. (Edalatkhah 2019)

The potential competitive advantages of Statzon

Amadeo (2019) believes, competitive advantages do not root only in more competitive price, quality, and speed of responsiveness, the role of innovative and high-tech service is very sensible in the current technology age. Statzon already benefits from competitive advantages, including modern, user-friendly, and engaging design, downloadable and printable visual data, regular updates, and market forecasts for all industries (Statzon 2019.) Study outcomes indicate that Statzon content needs to be revised by more detailed niche data classification, also the applied technology of Statzon needs to be automated (figure 2).

Figure 2. Statzon Potential Competitive Advantages for NB8 Academic Segment

Penetration Process to NB8 Academic Segment

To penetrate in NB8 academic segment, Statzon should reflect on the decision-making process. According to the study results, decision making in the NB8 academic segment, highly (70 %), depends on students’ feedback. The dominant decision-makers are library managers who decide about data service; however, in less than half (40 %) of academic centers, the university’s managing team decides about the data service. The study recommends Statzon does not confine targeting library managers to contact. The figure 3 declares how to convince the academic segment, Statzon first needs to build awareness among university teachers and research staff, before giving trial access to the university. In this way students as dominant end-users, would engage more efficiently in trying Statzon service, and then by providing feedback, they will influence the decision-making process. (Edalatkhah 2019)

Figure 3. Penetration Process to NB8 Academic Segment

Pricing Strategy for NB8 academic Segment

The study results imply that there is a correlation between GDP and R&D expenditure share of GDP of the NB8 members with academic users’ price consciousness. The study outcome shows while the average data service fee in NB8 is €5,194, fair annual subscription fee in the Nordics is considered to be €5,000-7,500, while in the Baltics users had more diversified anticipations (€2,000-10,000). (Edalatkhah 2019)

Recommended Strategies for Statzon in NB8

First, Statzon needs crystal clear goals as pillars of its marketing campaigns and content. The selected and filtered content should be adjusted based on customers’ demanded data categories. The second determining step is lead nurturing by creating a branched content funnel to drive leads toward fitting content, targeted video ads, engaging market data quiz, and communicating with leads in a friendly and innovative way. The third tactic is increasing visibility by other people’s networks (OPN), including academic experts and prominent influencers. The fourth step for Statzon to penetrate the educational segment of NB8 is setting barriers for the competitors and taking the market leader role. To do so, Statzon needs to create a big gap with competitors with its leading technology, massive academic niche data scale and ongoing innovation.

By limiting the access of trail users to all data categories, Statzon will have more professional and niche data provider image; likewise, as subscription bonus, Statzon can offer further access to more detailed data class, subcategories, or relevant data categories during the limited time with specific price bid to meet the needs of different academic users by setting Budget, Premium and Customized tiers. 

Tactics to avoid penalizing by Google Panda

As Search Engine Optimization (SEO) profoundly matters for the data service provider’s credibility, it also is crucial to be aware of the content types for which Google Panda algorithm penalizes the websites. Many websites after being penalized fail to retrieve their previous ranking. Panda updates are a big surprise to SEO and webmasters. Statzon should consider Google Panda sensitive hints including thin content, duplicated pages, lots of advertisements, unintuitive or poor navigation, automatically generated content, squeeze pages, doorway pages and meta-refresh technology which are respectively explained in figure 4. (Google Support 2019)

Figure 4. Tactics to avoid Google’s Panda Penalization (adapted from Google Support 2019)

Final Remarks

This study highly recommends Statzon to build a relationship with its subscribers by offering unique loyalty programs and having a “Honey Pot” service plan (Morris 2015), which leaves no excuse for potential users not to subscribe. The “Honey Pot “service package of Statzon should contain limited yet tailored niche data classifications, with the price range the target users consider fair. While Statzon is applying the suggested strategies toward increasing its credibility and visibility, it should be cautious about Google Panda content-sensitive guidelines.

References

Amadeo, K. 2019. What Is Competitive Advantage? Three Strategies That Work. Blog [Cited 25 Jun 2019]. Available at: https://www.thebalance.com/what-is-competitive-advantage-3-strategies-that-work-3305828

Edalatkhah, S. 2019. Customer-driven B2B Marketing Strategies for a Software Company. Case: Statzon. Lahti University of Applied Sciences. Thesis [Cited 30 Oct 2019].  Available at: http://urn.fi/URN:NBN:fi:amk-2019101419940

Google Support. 2015. Thin content with little or no added value. [Cited 9 Oct 2019]. Available at: https://support.google.com/webmasters/answer/9044175?hl=en&visit_id=637054460074608101-2546530961&rd=2#thin-content

Morris, J. 2015. The Right Way to Launch a Subscription Business [Cited 19 Jun 2019]. Available at: https://www.youtube.com/watch?v=qdWT7WA4aFk&t=534s

Statzon. 2019. What Is Statzon? [Cited 20 Jun 2019]. Available at: https://statzon.com/what

Worldbank. 2019. United Nations Comtrade Database Through the WITS Platform [Cited 28 Jun 2019]. Available at: https://data.worldbank.org/indicator/TX.VAL.TECH.CD

Authors

Shima Edalatkhah, International Business Student at Lahti UAS

Tiina Pernanen, Lecturer at Lahti UAS

Illustration: https://pxhere.com/en/photo/1431185

Published: 6.11.2019

Reference to this publication

Edalatkhah, S. & Pernanen, T. 2019. Customer-driven marketing penetration strategies for Nordic-Baltic eight academic segment. LAMK Pro. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2019/11/06/customer-driven-marketing-penetration-strategies-for-nordic-baltic-eight-academic-segment/

How to digitalize spare part business As the world is moving more and more towards digitalization around us, the common question which raises in Business as well is: how can we also turn our processes to digitalized ones? One interesting area is digitalization of spare parts business. This article is concentrating on spare part business in the perspective of Small and Medium size Enterprise (SME) and to be even more precise, complex parts made from metal.  

Authors: Janne Kousa and Brett Fifield  

Problem space explained

Imagine that your company is in process industry manufacturing with regularly spare parts sales to end customers. These parts have low volume, and relatively low turnover but long lead time.  

Because of this, one must decide on keeping several items in stock or produce the parts in made to order basis. For a small company large inventory is not cost-effective solution and on the other hand, delivery time for single made to order part may be several weeks.  

The interesting aspect is part is criticality, it may even stop the production and create huge costs when the process is not running. In this case, the price for single spare part may become neglectable instead of delivery time that can be promised to the customer.  

So the key questions are:  

– How to offer good spare part delivery times for several products while maintaining cost-effectivity?  

– How to provide spare parts in an emergency situation?  

– How to handle inventories in long term  

Solution proposal by 3D printing  

Let’s assume the following happens:  

1. Customer sends request for emergency spare part and states that their production has stopped causing 10 000€ /day direct loss until they get the needed spare part  

2. Your company finds the correct spare part item and sends an emergency order to selected 3D printing supplier near the customer  

3. 3D printing provider receives 3D file of the part with necessary instructions and is able to start the manufacturing process within 2 hours time  

4. Spare part is 3D printed overnight, packed and shipped with expedited method to end customer who receives it in 24 hours and loses only one day’s production instead of having to wait for one-week express manufacturing and delivery by traditional methods  

Naturally this emergency process generates more costs than traditional manufacturing, but if the part is critical due to the end customer’s process, doubling or tripling the part cost may be neglectable compared to costs when processes are stopped. (Kousa 2019)  

According to Kousa (2019), the digitalization of spare parts business can reduce money tied up to spare part inventory drastically. If the manufacturing is done either near OEM or near the customer by on- demand basis, the delivery times can be reached to good level without keeping any parts in stock.  

Figure 1. Delivery time reduction explained by distributed 3D printing process (Kousa 2019)  

Main findings  

Digital spare parts process requires that all the necessary data is in 3D- file format, as first requirement. The next requirement is to create the manufacturing process for 3D printing. Easiest way to get started is to find a suitable partner who has enough knowledge about printing possibilities and cost structure to see which are parts are suitable for printing in general. (Kousa 2019)  

Part screening process (finding printable parts) is usually the first step which the company faces when thinking about 3D printing. Not all parts are directly suitable for 3D printing and there may very well be some obstacles ahead when finding spare parts that are both mechanically and businesswise suitable. (Kousa 2019)  

At first it may seem that there is very limited amount of printable parts, but it is clear that 3D printing technology is evolving all the time, costs are coming down and new methods are introduced so what might not work today, does not mean that could not work in the future. (Kousa 2019)  

The important message is that without trying 3D printing as new alternative manufacturing process, it is impossible see the possibilities that this technology may provide now and in the future.  

Possibilities for new business concepts  

Previously mentioned partnering option for digital manufacturing chain offers a possibility for companies to enter 3D printing business as operators. This kind of operation can be at first local small-scale business but is scalable to global operating model as well. The distributed model can be seen as combined local and global concept.  

Solution could be that a partner starts to offer first local service to printing only, then begin handling also the file processing, and in the end moving to fully digital manufacturing chain so that the OEM only forwards the order to an operator who delivers the part to the end user. This model could be even expanded into franchising model where service owner offers client base and local entrepreneurs handle the business branches by their own private companies.  

Most extreme step is the OEM only selling user rights to data, practically allowing access to online spare part repository that the end user (or partner) utilizes to print their spare parts. By this, the whole transaction can happen in seconds creating revenue in a fraction of time compared to traditional order-delivery process.  

If OEM would one day move to offering production capacity as service, on time spare parts would be in key role to keep uptimes high. In this case 3D printing could be used as a tool for critical part manufacturing.  

Future research  

Upon the findings of this article the most interesting research question businesswise would be:  

– Data integrity when moving to completely digital spare parts process, including possibilities of Blockchain for example to protect IPR  

– Outsourcing whole spare parts concept to 3rd party – digitalizing the whole sales to order- workflow so that the OEM only sells rights to use the digital spare parts data  

– Spare part repository concept in general, OEM’s centralized database for spare part data or distributed accessible data which is then protected by user rights (such as Spotify or Netflix) and charged by royalty fees  

– Spare part concepts and their feasibility businesswise, comparing partnering in part manufacturing, complete equipment leasing with service functions and turn-key offering of production capacity including labor  

For small companies the above questions may be still quite far ahead, but for larger companies they may offer new possibilities to enhance the spare parts business towards completely digital one and by that to streamline processes, reduce single transaction costs and offer new kind of customer experience for ordering spare parts.  

References  

Kousa J. 2019. How to digitalize spare parts business. Master’s Thesis. Lahti University of Applied Sciences, Masters Degree Program in International Business Management. Lahti. [Cited 15 May 2019]. Available at: http://www.urn.fi/URN:NBN:fi:amk-2019051510050  

Authors

Janne Kousa has completed a master’s in International Business Management Degree program in 2019.

Mr. Fifield has been actively involved in developing Business Schools for the Finnish Universities of Applied Sciences since 1994. Most recently he has been responsible courses in Futures and Strategies, Innovation and Creativity, Digital Services and Leadership and Management of Projects in Distributed Organizations. 

Illustration: https://pxhere.com/fi/photo/1323787 (CC0)

Published 2.9.2019

Reference to this publication

Kousa, J. & Fifield, B. 2019. How to digitalize spare part business. LAMK Pro.
LAMK Pro. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2019/09/02/how-to-digitalize-spare-part-business/