1. Discuss the nature of the market structure and the demand for Cisco’s products.
- Cisco produces those familiar Linksys wireless internet routers and owns Pure Digital Technology, the company makes the trendy flip video cameras. Three-quarters of Cisco’s sales are in routers, switches and advanced network technology the things that keep data moving around cyberspace 24/7 But Cisco has also pioneered the next generation of internet networking tools. Cisco has perfected collaboration to help those clients better collaborate employees, suppliers, partners and customers.
2. Given the industries in which Cisco competes, what are the implications for the major types of buying situations?
- Straight rebuys—because Cisco deals in high-tech, there may be few truly straight rebuys. This is due to the fact that as purchase cycles come up, technology has changed. As a result, corporate buyers are looking at slightly different to extremely different products to replace the ones that they have. Straight rebuys are likely to occur when a company buys a set of routers or switches shortly after purchasing the same items. This may be due to a gradual rollout replacement or an expansion.
- Modified rebuy—many of Cisco’s products will fall into this situation. Clients replace existing routers and switches with new spec models. Cisco’s services may also fall into this classification if this is something that a client has previously purchased.
- New-task—many of Cisco’s products and most of its services fall into this classification. For example, when Gale International, the construction company for New Songdo City, contracted Cisco to supply the technology needs for the city; this was an all-new venture. From the architecture to the hardware to the services, these represented new-tasks. Many companies getting in to collaboration consulting services are doing so for the first time in a similar manner.
3. What specific customer benefits will likely result from the Cisco products mentioned in the case?
- Routers and switches—keep data flowing efficiently.
- Cybersecurity devices—protect proprietary information from being hacked or stolen.
- Videoconferencing tools—allow employees to interact across distances without incurring the expense and time required to travel.
- Collaboration services—help clients better collaborate with employees, suppliers, partners, and customers. Some resulting benefits are reduced time in bringing products and services to market, reduced expenses, and strong customer relationships.
4. Discuss the customer buying process for one of Cisco’s products. Discuss the selling process. In what ways do these processes differ from those found in buying and selling a broadband router for home use?
- Customer buying and selling process
Cisco product is complex, Extensive buying process due to B to B, Complex modified rebuy and very analytical perspective, Service after sale, and Collaboration.
- Differentiating process
Break down the communication barriers and to fix failures immediately.
- Cisco buying situations are much more complex than consumer buying processes. Therefore, it is important that students recognize that customers involved will go through a very extensive buying process. Not only are there more steps involved in the business buying process than there are in the consumer buying process, but for a complex modified rebuy, the customer is certainly going to go through each of these steps from a very analytical perspective.
5. Is the relationship between Cisco’s own collaborative culture and the products and services it sells something that could work for all companies? Consider this issue for a consumer products company like P&G.
- Corporate culture is not something that can simply be plugged in. However, if management is open to it, most any company should be able to adopt some of Cisco’s best practices in order to achieve some of the benefits. For a consumer products company like P&G, adoption of Cisco’s collaborative tools and services should result in reduced communication barriers as described above. Similar to the benefits achieved by the scientist working on solar technology in the case, P&G should achieve benefits of accelerated new product development. This reduces costs and makes P&G more competitive by bringing new products to market before other companies.