Although SPSL is essentially a service provider, it uses the services of one particular wholesaler to buy its products. These products meet health and safety regulations and help SPSL to meet their objectives in terms of quality and service. SPSL has used the services of its wholesaler – ‘ABCPlumbing Supplies’ since the company’s inception in 2000. The two firms have a good working relationship that looks set to continue in the short-term.

The price SPSL charges depend on a number of factors. These include size of client, frequency of callouts, type of service required, and length of contract and business location. At present SPSL has a complex pricing system. The company tends to favour price negotiation when dealing with its clients, rather than promoting a rigid pricing policy. Peter and Harvey have found that negotiation is often preferred by existing and potential clients. In terms of pricing strategy, SPSL is priced towards the premium end of the market.

SPSL is located in South London. Its centrally located base means that it’s ideally situated to target a larger number of potential clients within the South London area.The company has a fleet of commercial vans that are fully equipped with essential tools and equipment. The owners hope that Manchester will also provide the same opportunities and generate the same rewards.

As mentioned, SPSL’s existing promotion is largely based on word-of-mouth communication. The company does have a website, although this is purely a ‘shop window’ for the business. In other words, it provides background to the company, range of services and testimonials. SPSL also attends trade fairs and occasionally advertises in local newspapers. Peter and Harvey have been fortunate that word-of-mouth has been a significant contributor to the company’s success. The brothers estimate that 90% of new customers are a result of positive word-of-mouth communication. However, this cannot be solely relied upon in the future, particularly in relation to the establishment of the new office in Manchester.

Business-to-Business Relationships
Both Peter and Harvey place great importance on maintaining successful working relationships with their clients. Usually relationship building also involves a great deal of ‘social bonding’ in the hope that existing relationships can be maintained, as well as new ones being established.
Future strategic direction
Peter and Harvey have ambitious plans for the company. Developing an office in Manchester is intended as the first step on the road of significant organisational development. The company hopes to increase the number of offices to five by the end of the decade. Also, they have visions of entering the B2C sector. Yet, this is likely to be some year’s way.

Peter and Harvey have ambitious plans to grow the business. As an Independent Marketing Consultant, you have been appointed to compile a report that answers the following questions:

* SPSL is a fictitious company

Questions (Please answer ALL questions):

1. In promoting their services to the Manchester region Peter and Harvey intend employing a sales force. Discuss why you think that this is a suitable way of promoting the business. In addition, analyse the options available to the brothers with regards to organising the sales force. Which method do you believe is the most appropriate? Justify your answer.
(25 marks)

2. Both Peter and Harvey have highlighted the importance of relationships in B2B. Discuss to what extent relationship variables and business networks are likely to be important for SPSL when establishing their new office in Manchester. How can the company maintain these relationships in order to develop customer loyalty?

(25 marks)
3. Although SPSL operates in the B2B sector, long-term they may also decide to enter the B2C market. Analyse the likely differences between the B2B and B2C part of the business, along with the advantages and disadvantages for SPSL marketing its service to both businesses and consumers.