Market Acceptance of B2B Products: A Case Study on Volvo Trucks

This report provides a comprehensive analysis of Volvo's market acceptance strategies for its B2B products, specifically focusing on the 'Powertrain Cummins Natural Gas' trucks. The study examines the company's approach to stimulating product adoption and diffusion among logistics companies, including marketing strategies, value addition, and sustainability initiatives. It evaluates the success of these strategies, analyzing sales figures and market share, while also identifying areas for improvement, such as pricing and global promotion. The report further explores additional measures Volvo can take to enhance market acceptance, including short-term tactics like discounts and after-sales services, and long-term strategies like acquiring logistics companies and fostering innovation. The analysis also addresses bottlenecks faced by Volvo and proposes resolutions, providing a detailed overview of the challenges and opportunities in the B2B market for LNG-driven trucks.

Running head: MARKET ACCEPTANCE OF B2B PRODUCTS
Market Acceptance of B2B Products
Name of the Student:
Name of the University:
Author Note:

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MARKET ACCEPTANCE OF B2B PRODUCTS
Table of Contents
Introduction:...............................................................................................................................3
New product adoption activities and results:.............................................................................3
1st part:....................................................................................................................................3
Strategies of Volvo to stimulate adaptation of Powertrain Cummins Natural Gas trucks:....3
Marketing:..........................................................................................................................4
Value addition products strategy:...........................................................................................4
2nd part:...................................................................................................................................5
Success standards of new product adoption strategy by Volvo:............................................5
3rd part:....................................................................................................................................6
Improvement of stimulation of product adoption among customers by Volvo:....................6
New product diffusion activities and results:.............................................................................6
1st part:....................................................................................................................................6
Activities Volvo undertakes to improve market diffusion of LNG driven trucks:................6
Sustainability:.....................................................................................................................7
Driver safety attributes:......................................................................................................7
2nd part:...................................................................................................................................8
Success standards of new product diffusion strategy by Volvo:............................................8
3rd part:....................................................................................................................................9
Improvement of stimulation of product diffusion among customers by Volvo:....................9
Additional measures to improve product market acceptance:...................................................9

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MARKET ACCEPTANCE OF B2B PRODUCTS
1st part:....................................................................................................................................9
Short-term measures to improve market acceptance of the new product:.............................9
Discounts on sale:..............................................................................................................9
Free after sales services:...................................................................................................10
2nd part:.................................................................................................................................10
Long-term measures to improve market acceptance of the new product:...........................10
Acquire logistics companies in every market:.................................................................10
Innovation in LNG driven trucks:....................................................................................10
Indentified bottlenecks and resolutions:...................................................................................11
Current variables in tracking market acceptance of the product:.............................................12
Conclusion:..............................................................................................................................12
References:...............................................................................................................................13

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MARKET ACCEPTANCE OF B2B PRODUCTS
Introduction:
Companies manufacturing business to business (B2B) products introduce new
products to their product lines in response to the new emerging needs of their business
customers. They make strategies to ensure market acceptance of these products at two stages
namely, the adoption stage and the diffusion stage. These manufacturers also make
strategies to deal with business bottlenecks which they encounter to market these expensive
B2B products and keep on tracking the market acceptances of the products. They make
strategies to improve the market penetration of their B2B products based on the findings on
these tracking activities. The chosen new product of for the study is the ‘Powertrain
Cummins Natural Gas’ which is a member of the liquid natural gas (LNG) driven
commercial vehicle product line owned by the Swedish multinational automobile
manufacturer Volvo (volvotrucks.us, 2018). The paper would delve into the market
acceptance strategies which Volvo takes to ensure that its new products gain high rate of
market adoption and diffusion. It would also study the strategies the company uses to assess
and enhance the market position of these new B2B products.
New product adoption activities and results:
1st part:
Strategies of Volvo to stimulate adaptation of Powertrain Cummins Natural Gas trucks:
The following are the strategies which Volvo adopts to stimulate adoption of its new
B2B products like Powertrain Cummins Natural Gas among individual business customers
like logistics companies:

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MARKET ACCEPTANCE OF B2B PRODUCTS
Marketing:
Volvo markets its new B2B products aggressively to stimulate adoption of new
products among its business consumers like logistics companies. It advertises its B2B
products like trucks on its official websites, business magazines and business articles
(lngworldnews.com, 2018). The company conducts these marketing activities for its new
products in all its significant markets namely, North America, South America, Asia and
Europe. This ensures that the new B2B products create demand from logistics companies
around the entire globe. This creation of demand results in sale of new B2B products like
Powertrain Cummins Natural Gas to large number of business customers in these markets
(media.volvocars.com, 2018). This analysis shows Volvo adopts marketing to stimulate
adoption of its new products by individual business customers.
Value addition products strategy:
Volvo uses value addition product strategy to stimulate adoption of its new products
like Powertrain Cummins Natural Gas among logistics companies all over the world. Volvo
is a global B2B vehicle manufacturer which is known to manufacture high utility vehicles to
maximise customer utility. The new range of trucks Volvo added to its commercial vehicle
product line runs on renewable sources of fuel like LNG. Thus, these trucks cause less
pollution compared to their petroleum run counterparts. The main customers of the logistics
companies using Volvo trucks are multinational companies from diverse sectors like
consumer goods (Simmons et al., 2015). These multinational companies emphasise the
logistics companies transporting their goods to use vehicle running on sustainable sources of
energy. Thus, using Volvo trucks would allow these logistics companies to meet this
requirement of their main customers. This results in establishment of long term business
relationship between the logistics companies and their multinational customer companies
which generates huge revenue for the former. This analysis shows that adopting Volvo LNG

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MARKET ACCEPTANCE OF B2B PRODUCTS
drive trucks enable the logistics companies to maximise their own revenue generation,
enhance business partnership with their customer companies and help them to embrace
sustainability (Montgomery, 2015). This characteristic of Volvo to add value to the business
of its customers stimulate the latter to adopt new B2B products by Volvo like Powertrain
Cummins Natural Gas.
2nd part:
Success standards of new product adoption strategy by Volvo:
Figure 1. Statistics showing sale of Volvo
(Source: autonews.com, 2018)
The strategies Volvo took to stimulate adoption of new B2B products were
successful. The figure above shows that the sale of Volvo products in the US including B2B
vehicles rose from less than 60000 units in 2014 to 70000 in 2015 and finally reached close
of 90000 units in 2016. This rise in sale of Volvo automobile products including new B2B
trucks prove that it was successful in stimulating adoption of its new products among the
logistics companies, its main consumers (Zhou & Wang, 2014).

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MARKET ACCEPTANCE OF B2B PRODUCTS
3rd part:
Improvement of stimulation of product adoption among customers by Volvo:
Volvo should lower the product and pricing strategy to stimulate higher degree of
adoption of the new products in the market by its business customers like logistic companies.
The statistics above clearly shows that sale of Volvo automobile rose close to 90000 units by
2016 (autonews.com, 2018). The company has started experiencing fall in the demand
for its heavy duty vehicles in its significant markets like the US owing logistics
companies scaling down their costs and inventory carriage. Moreover, the truck market in
the US is experiencing entry of foreign trucking companies offering LNG driven trucks at
lower rates than Volvo. These companies are also offering trucks of smaller sizes at lower
rates which are appealing to smaller logistics companies as well. Thus, it can be construed
from the above discussion that Volvo must introduce new B2B products like Powertrain
Cummins Natural Gas trucks in both large and small sizes available at high and low prices
respectively (Hahn et al., 2015). This would enable both large and small logistics houses
adopt new Volvo B2B trucks and as a result enhance the product adoption of these products
in the market.
New product diffusion activities and results:
1st part:
Activities Volvo undertakes to improve market diffusion of LNG driven trucks:
The following are the strategies Volvo undertakes to improve product diffusion of its
new B2B products like LNG driven range of trucks:

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MARKET ACCEPTANCE OF B2B PRODUCTS
Sustainability:
Volvo uses sustainability as a formidable strategy to stimulate diffusion of its new
B2B products in the markets like the US. As pointed before, the main customers of Volvo
B2B vehicles, the logistics companies prefer trucks running on sustainable fuel like LNG to
comply with the sustainable supplier parameters laid down by their customers (Simmons et
al., 2015). Thus, purchasing the LNG driven B2B range of trucks by Volvo can enhance the
sustainability images of the logistics companies which would enhance their business. Thus,
Volvo can use sustainability as a tool to promote deeper market diffusion of its LNG driven
B2B range of trucks like Powertrain Cummins Natural Gas trucks (deloitte.com, 2017).
Driver safety attributes:
Volvo stresses on drivers’ safety to stimulate product diffusion of its new B2B
products in the market. The heavy automobile manufacturer ensures safety of the drivers by
installing features like global positioning system in its automobile products like trucks
(cars.usnews.com, 2018). This driver safety attributes of Volvo trucks enable the logistics
companies to minimise losses they suffer due to accidents of their trucks carrying goods.
Thus, driver safety attributes of Volvo trucks act as financial incentives which encourage
logistics companies to acquire the B2B vehicles of the former. This in turn enables Volvo to
enhance diffusion of its B2B vehicles in significant markets like the US (Hahn et al., 2015).

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MARKET ACCEPTANCE OF B2B PRODUCTS
2nd part:
Success standards of new product diffusion strategy by Volvo:
Figure 2. Fuigure shwoing share price of Volvo
(Source: bloomberg.com, 2017)
Volvo has not succeeded in diffusing its new B2B products in the markets like the
US. The share prices of Volvo shows a downward shift which reflects the loss of investors’
trust in the company’s power to provide them with dividends. The fall in the power to pay
dividends to investors could be attributed to the fall of net sales of Volvo Group from SEK
312515 million in 2015 to SEK 301914 million in 2016. This fall in the net sales of Volvo
proves that the company was not successful in diffusing its products including its B2B
products in the market (volvogroup.com, 2018).

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MARKET ACCEPTANCE OF B2B PRODUCTS
3rd part:
Improvement of stimulation of product diffusion among customers by Volvo:
Volvo can improve and stimulate diffusion of its new B2B products in the market by
promoting these new products more extensively on a global scale. Manufacturing of B2B
vehicles attract robust investments compared to B2C vehicles (cars.usnews.com, 2018). This
factor makes the B2B range of trucks very expensive which small and medium logistics
companies cannot afford to buy. This in turn reduces the market diffusion of the Volvo B2B
products. Thus, the company should promote these products more extensively on a global
scale to gain deep market diffusion and attract large number of big logistics companies which
would be able afford these expensive B2B vehicles (Chen, Peng & Hung, 2015).
Additional measures to improve product market acceptance:
1st part:
Short-term measures to improve market acceptance of the new product:
The following are the short term measures which Volvo can take to improve market
acceptance of its new B2B range of LNG driven vehicles like Powertrain Cummins Natural
Gas trucks:
Discounts on sale:
Volvo should offer discounts on the sale of its expensive B2B trucks like Powertrain
Cummins Natural Gas trucks. This would also allow a large number of medium sized
logistics companies to acquire Volvo trucks and in turn help the company to enhance its
market penetration (Johnston & Marshall, 2016).

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MARKET ACCEPTANCE OF B2B PRODUCTS
Free after sales services:
Volvo can allow free after sales services to its customers for a limited period which
would help it to attract new customers namely, logistics houses which transport abrasive
materials whose trucks require frequent after sales services. This strategy on a temporary
basis can help Volvo to acquire customers to enhance market acceptance of its new products
like Powertrain Cummins Natural Gas trucks (Hahn et al., 2015).
2nd part:
Long-term measures to improve market acceptance of the new product:
The following are the long term measures which Volvo can adopt to improve the
market acceptance of its new B2B products:
Acquire logistics companies in every market:
Volvo should acquire logistics companies in every significant market where it would
supply materials to multinational companies and earn immense revenue. It can channelize
this revenue towards manufacturing of more economic variants of its new products like LNG
driven trucks like Powertrain Cummins Natural Gas trucks. The company would
consequently be able to sell its LNG driven trucks to medium sized logistics companies
which would enhance their market acceptance (cars.usnews.com, 2018).
Innovation in LNG driven trucks:
Volvo should direct a part of its revenue to carry out open innovation to introduce
more low priced variants of its expensive LNG driven trucks. This measure would enable it to
attract small and medium sized logistics companies which ultimately enhance its market
acceptance (Johnston & Marshall, 2016)

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MARKET ACCEPTANCE OF B2B PRODUCTS
Indentified bottlenecks and resolutions:
Bottlenecks Volvo faces Resolutions
1. High cost of production
which results in high prices of
the LNG range of trucks
Open innovation and acquisition of logistics companies. Volvo must
acquire logistics companies and serve multinational companies. This
would generate the revenue which the company can direct towards
conducting open innovation and research to bring about low priced
variants of Powertrain Cummins Natural Gas trucks. This strategy
would help the company to diversify the huge cost that it would incur
to bring about open innovations in trucking products.
2. Competition from foreign
truck manufacturers
Channelize open innovation towards introduction of low priced LNG
driven trucks to counteract foreign truck manufacturing companies.
Volvo can introduce trucks which can run on both LNG and petrol
which would enable the driver to refuel the trucks as per available
type of fuel which transporting goods across long distances. This
innovative product would enable Volvo to attract new purchasers and
counteract the competition it faces from competitors.
3. Weak marketing mix LNG driven trucks by Volvo are very expensive and cannot be
afforded by the medium and small logistics houses. The company
should introduce smaller versions of Powertrain Cummins Natural
Gas trucks of low prices. This would help the small and medium
logistics to acquire Volvo LNG trucks as well.
Figure 3. Table showing bottlenecks Volvo faces and their resolution
(Source: Author)