Marketing Strategy of Minnesota Micromotors: A B2B Analysis

This report provides a comprehensive analysis of the marketing strategies employed by Minnesota Micromotors, a B2B company operating within the medical device market. It delves into the company's efficient market-centric management, highlighting its ability to maintain budget surpluses and manage customer segments effectively. The report examines the company's customer management strategies, including its segmentation into four distinct customer groups and its use of niche marketing to cater to specific needs. It explores the 'go-to-market' approach, encompassing sales force deployment and distribution channel strategies. The report also analyzes the value of MM's products to customers, the importance of customer relationships, and the company's product and pricing strategies. Furthermore, it discusses the company's market positioning, the influence of business channels, and the relationship between customer loyalty, satisfaction, and profit generation. The report concludes by suggesting short-term expansion strategies and examining promotion and product development as strategies to improve profitability.

Running head: MARKETING STRATEGY OF MINNESOTA MICROMOTORS
Marketing Strategies of B2B Companies
Name of the Student:
Name of the University:
Author Note:

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MARKETING STRATEGY OF MINNESOTA MICROMOTORS
Introduction:
The medical device market including orthopedic motors in the United States of America
is the largest of its kind in the world with a worth of over $ 140 billion. The country’s market
accounts for 40 percent of the global production and exports medical devices including motots
worth $44 billion (trade.gov 2018). This medical device market is a business to business (B2B)
market which attracts a lot of investment from the medical equipment manufacturing companies.
The equipment making companies consequently manage their customers, financial resources,
marketing mixes and competitive strategies to ensure high return on their immense investment.
They have to make marketing strategies and manage their sales forces to achieve these
objectives. The paper would delve into a simulated company called Minnesota Micromotors and
its marketing strategy.
Body:
The overall management strategy of Minnesota Micromotors Inc: was extremely efficient
and market centric. Efficient marketing management is extremely crucial for companies to
ensure high profits on continuous basis. The ‘decision history’ statement of the firm shows that it
had budget surplus at the end of every quarter except 2013 Q3. The budget surplus was earned
in spite of allowing discounts to customer segments which add to the expenses. Thus, one can
reinstate the fact that the overall market management strategy of Minnesota Micromotors Inc.
was extremely powerful and efficient. Companies earn high profits by the virtue of their
customer management besides allocating a whopping amount towards the strategy (Tadajewski
2016). As far as the customer management strategy of MM is concerned, one can point out that
the company manufactures medical instruments which surgeons use for conducting operations

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and surgeries. The customers of the company are hospitals, pathological laboratories, nursing
homes and distributors of medical equipments which in turn sell the equipments to the other
customers. This means that the firm received bulk orders for these B2B goods which are
expensive. The customer segments of the company consisted of four segments namely A, B, C
and D, each with different expectations. The segment A customers were premium customers
which ordered higher variants of the motors and required constant after-sales services. The
segment B customers ordered motors with thermal resistance, thus forming a part of the niche
marketing base of MM (Mencarelli. and Riviere 2015). They too required continuous sales
support from the representatives of the company. The third segment of the customers was less
price sensitive compared to the previous two segments and ordered thermal resistant and power-
to-ration ration machines. The fourth segments of customers were syndicates which bought
orthopedic tools at economic rates, thus acquiring high discounts from MM’s end. An analysis of
the customer base of MM reveals that the market of the company was segmented into four broad
categories while the company used niche marketing strategies to cater to the segment B. One can
point out that niche marketing is a marketing strategy which is usually applied by established
companies to earn supernormal profits and requires immense investment towards creating the
differential attributes like extra heat resistance of the products. One can infer taking these facts
into consideration that MM managed customers very efficiently and invested its resources
towards manufacturing of these high-precision medical equipments (Jackson, Schuler and Jiang
2014). The fact also attested the competitive power of MM in the medical instruments markets
which has over a hundred companies manufacturing similar products. The high market position
of the company further testifies its capability of creating customers satisfaction to these business

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customers and retaining them, thus generating high revenue in the medical equipment market of
the United States (Paluch 2014).
A very powerful marketing and customer management technique which Minnesota
Micromotors used was go-to-market approach. The approach embraced sales force deployment
and distribution of channel strategy towards which the company allocated huge marketing funds.
The go-to-market approach comprised of two channels which the company use to get access to
its customers. Since medical equipments are B2B products, the company used its distributor
chain to sell them to end customers like nursing homes and hospitals. The company also had a
sales team which sold the products directly to the end customers and distributors (Paluch 2014).
The success of the companies in attracting and retaining B2B customers is dependent on the
capacity of the company to pay individual attention and offer discount to customers. The sales
representatives of the company offered discounts to both distributors and premium end
customers as high as 12 percent. Thus, go-to-market approach of the company was actually
aligned to meet the needs of its target market segments (Kennedy 2015).
The Value of MM’s products to customers was immense and is evident from the high
sales volume of the company and the revenue generated. Customer relationship is very important
for the medical equipment companies to generate high revenue since they have to invest large
amount of money towards manufacturing of the equipments. Strong relationship between
customers and the companies ensure that the company enjoys high market goodwill and
retain large proportion of their present clients, thus ensuring future revenue generation
(Tadajewski 2016). MM maintained a strong relationship with the customers through dialogue
and involvement of managers, medical engineers, procurement staff and dealers. This ensured
that the company retained its customers and enjoyed continuous generation of revenue. However,

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the company should expand its product line to include household medical equipments like
blood sugar measurement machines. These changes would enable the company to serve both
business customers like hospitals and household customers who use these equipments (Paluch
2014). Moreover, MM would be able to outshine its competitor companies which are restricted
within B2B orthopedic medical equipment manufacturing. This product policy would enable the
company to strengthen its market goodwill and boost its revenue generation. It is evident from
the present product line of MM that pricing of the products which the company sells are very
high. The pricing policies of the company allow it to give discounts to its business customers and
yet earn high profits (Jackson, Schuler and Jiang 2014). However, it can be pointed out that with
the proposed expansion of product line into smaller medical equipment category the company
would have to relax its pricing to make the new products appealing to both business and
individual customers.
The product and price strategies of companies have deep impact on the market
positioning of business organizations. The market position of MM was that of a tier 3 firm
making motors for medical equipments. Strengthening of the market position is very essential to
ensure long term market growth. Thus, company must expand its product line to give stiff
competition to the other motor manufacturers (Ashok, Day and Narula 2017).
Business channels have influences on pricing decision and revenue generation. The fact
is especially pertinent in case of B2B products like medical equipment motors. The companies
manufacturing motors have to depend on distributors in largely to distribute their finished
products and generation of revenue. Conflict between channel distributors and the
representatives of companies can have disastrous impact on the pricing strategies and
consequent revenue generation of companies. Channel conflict would lead to loss of

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business customers and force companies to lower their pricing, thus lowering of their
profits (Tadajewski 2016). The B2B companies normally concentrate on acquiring distributors
which sell their products to final customers. The sales representatives normally sell products to
these distributors at discounts, thus ensuring bulk orders. However, sometimes sales
representatives do sell directly to end customers to acquire premium clients for the companies to
ensure future business generation. The distributors may view this strategy of the companies as
invasion into their profit sharing like in case of MM and may terminate business contacts. The
companies must not indulge into direct end customer acquisition to avoid conflict with
their distribution channel. This would ensure profit sharing by both the companies and
their distributors by fixing high prices for the products (Ashok, Day and Narula 2017).
Customer loyalty, customer satisfaction and profit generation of companies are
related directly to each other. The companies like MM should offer high quality products to
their customers and facilities like discounts to enhance customer satisfaction. These customers as
a result remain loyal to the companies and ensure that the latter generates high profit by selling
products to them (Paluch 2014). This fact is more applicable in case of B2B sales where the
products are expensive and are usually sold in bulk. Moreover, business customers rely on
business performances and goodwill while purchasing equipments like motors for their surgical
machinery. Companies like MM retain large base of financially strong customers which render
them strong goodwill and provides them with references, thus ensuring future business
expansion. Thus, profit generation in companies is directly related to customer satisfaction
and customer loyalty (Jackson, Schuler and Jiang 2014).
MM Inc should use the short term short term expansion strategy of acquisition. This
is because the tier 3 companies require expanding their product line to increase their competitive

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advantage and revenue generation. These companies can acquire smaller companies belonging to
related industries to get access to their resources. They can use the resources of their subsidiaries
to expand their product line. This would allow them to boost their revenue generation and drive
their future long term strategies (Mencarelli. and Riviere 2015).
The business organizations can use promotion and product development as strategies to
improve their profitability. Promotion is a powerful tool which B2B companies can use to boost
their revenue generation. The first advantage of promotion is that it would allow these B2B
companies promote their goods among a large numbers of business organizations, their
prospective customers. The interested business organizations (like medical equipment dealers in
case of MM) can then contact the manufacturers. The second advantage of promotion is that it
enables companies to ensure huge profits (Tadajewski 2016). The business customers having the
need and financial capacity to acquire B2B equipments can contact the manufacturers directly
and buy from them. This guarantees revenue generation. However, promotion as profit
maximization strategy has two disadvantages as well. The first disadvantage is that promoting
business equipments requires advertising in the business magazines and internet websites, which
attracts huge costs. This immense expenditure adds to the cost of production of these
equipments, thus making them extremely expensive. The second disadvantage of promotion is
that in case B2B goods, reference plays more active role in acquiring customers. Thus, though
promotion attracts huge expenditure, it may not ensure profits (Ashok, Day and Narula 2017).
The next strategy which B2B companies can use to enhance their profit generation is
product line expansion. The first advantage of product line expansion is that it helps B2B firms
in entering new markets and expand their present customer base, thus generating more revenue.
The second advantage of product line expansion is that the new customer base enables the

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companies to diversify the immense expenditure and market risks they encounter while
manufacturing B2B goods. Thus product line expansions increase the risk absorption capacity of
the companies and ensure positive returns on their investments. However, product line expansion
has two disadvantages as well. The strategy is extremely expensive as it requires companies to
acquire new manufacturing facilities. The second disadvantage of product line expansion is that
it exposes the companies to the risks of failed product line expansion and immense loss which is
capable of devastating their capital bases (Okazaki et al., 2015).
The central aspects of strategic decision making are enhancement of profit generation and
market position of the companies like MM Inc. The stiff competition often require companies to
compromise on one business aspect to gain advantage in the other, which is known as trade-offs.
The simulation reveals three strategic trade-offs companies often encounter while conducting
business operations. The first trade-offs which companies, especially B2B companies encounter
is to restrict their operations to maintaining present business customers like dealers. This trade
off is important because the distributors often view the direct contacts of the sales representatives
with the end customers as invasion into their profits which may give rise to future conflicts.
Thus, the companies have to compromise on their new client acquisition to enjoy prolonged
support of the distributors (Mencarelli. and Riviere 2015).
The second trade-offs which companies have to withstand is allow high employee
turnover in order to ensure high profits. The B2B product companies often put a lot of stress on
their sales staff to ensure high acquisition of clients (Saleh, Ebeid and Abdelhameed 2015).
The third trade-off which the companies suffer is restricting themselves to niche
marketing and catering of spare parts like motors. This strategy of them helps them to avoid

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competition with bigger companies and sustain themselves in the market (Jackson, Schuler and
Jiang 2014).
Conclusion:
One can conclude that B2B companies like MM should promote and expand their
product line to boost their profit generation. They stress too much on profit generation and do not
emphasize on retention of employees. This trade-off may earn financial benefits in the short term
but would jeopardize the future operations of the companies. The companies should concentrate
on forming policies to retain their employees and ensure acquisitions of new customers. The
B2B companies, especially the ones in tier 3 can acquire some of their distributors to counteract
the second trade off. This would allow them to get access to end customers directly and earn
more profits.

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Ashok, M., Day, M. and Narula, R., 2017. Buyer (dis) satisfaction and process innovation: The
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resource management. The Academy of Management Annals, 8(1), pp.1-56.
Kennedy, L.B., 2015. Using a cost benefit analysis to support the development of a
comprehensive business model for a pre-filled, pre-labeled, pre-diluted, sterilely packaged,
ready-to-use, syringe-based anesthesia delivery system. The University of Southern Mississippi.
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Okazaki, S., Díaz-Martín, A.M., Rozano, M. and Menéndez-Benito, H.D., 2015. Using Twitter
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Paluch, S., 2014. Customer expectations of remote maintenance services in the medical
equipment industry. Journal of Service Management, 25(5), pp.639-653.

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Saleh, M.H., Ebeid, A.Y. and Abdelhameed, T.A., 2015. Customers’ perception of corporate
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