What Is B2B Marketing?

Marketing to a business trying to make a profit (Business-to-Business marketing) as opposed to an individual for personal use (Business-to-Consumer, or B2C marketing) is similar in terms of the fundamental principles of marketing. In B2C, B2B and B2G (Business-to-Government) marketing situations, the professional marketer must always:

• successfully match the product/service strengths with the needs of a definable target market;  
• position and price to align the product/service with its market, often an intricate balance; and  
• communicate and sell it in the fashion that demonstrates its value effectively to the target market.

Voila! Easy? Well, no. If it were that easy, we wouldn’t have dedicated our careers to understanding the nuances of marketing. So what are the meaningful differences between B2B and B2C marketing?

A B2C sale is to an individual. That individual may be influenced by other factors such as family members or friends, but ultimately it’s an individual who pulls out their wallet. By comparison a B2B sale is to an organization, comprised of a group of individuals. In that simple distinction lies a web of complications that vary widely by firmographic (i.e., “demographic” for segmenting businesses) such as business size, location, industry, and revenue base. This article is a brief look at how the “Six Ps + Branding” marketing mix apply in the unique circumstances of the B2B sale.

B2B Branding: Branding is often considered an “irrational” element of the buying process, thought by many to make it most effective on individual consumers, as opposed to organizations which have relatively structured procurement processes. By contrast procurement processes are considered “rational,” as though every proposal will be evaluated on its merits alone. This understanding essentially assumes that robots are in charge of your prospect’s procurement process and that your reputation makes no difference to a robot. Of course, these are weak presumptions. B2B Branding is a highly profitable investment when done well because it provides incentive to your buyers to select you during the procurement process. A strong brand standing behind a strong proposal gives your customer confidence that in choosing you as their business partner they will be dealing with a known quantity that they can rely on as they build their own business.

B2B branding differs from B2C in some crucial ways, including the need to closely align your corporate brand, divisional brands, and product/service brands and to apply your brand standards to material often considered “informal” such as email and other electronic correspondence. In doing this, you respond to the reality that every contact creates an impression that either builds or devalues your brand. The introduction of social media has added even more complication because in a world where your employees, customers and critics talk about your company (often now called "the brand") throughout cyberspace on blogs, forums, and social network sites, the individuals your brand touches now actively shape your public image - for years to come through search results. As a result, your marketing and public affairs departments affect your public perception less directly than ever before. Although you can and should implement employee social media participation policies, this approach is a defensive measure that doesn’t by itself further your brand. In addition, more proactive brand-diffusion strategies must be deployed internally and externally to take advantage of your employees and "fans" that are predisposed to help shape your public image in a positive manner.

B2B Product (or Service): The business customer is typically demanding, and their needs more specialized, than the consumer’s. As in consumer marketing, this is true for larger sales, but even when buying commodities, the business customer will generally require a more customized sales process, product capability, configuration capacity and delivery process. Additionally, because business customers are focused on creating shareholder value, the cost-saving or revenue-producing benefits of products and services are an important factor in the product development and marketing cycles.

B2B People (target market): A solid understanding of your target market is so crucial to B2B success that we break it out of the traditional “four Ps” of marketing. Quite often, the target market for a business product or service is smaller and has more specialized needs reflective of a specific industry or niche. Regardless of the size of the target market, the business customer is making an organizational purchase decision and the dynamics of this, both procedurally and in terms of how they value what they are buying from you, differ dramatically from the consumer market.  Moreover, characteristic of the organizational sale, the final decision is rarely made by one person. Typically, the decision-making is based on a defined set of criteria and involves people in numerous departments throughout the organization. Understanding what motivates these individuals and how they stay informed about your market niche becomes important to how the brand is communicated to them.  

B2B Positioning: Positioning is such an important part of the marketing mix that we give it its own “P.” Positioning is just as important for business customers as it is for consumers so that they can tell quickly when viewing your materials why you offer them greater value than the competition. Because the business customer is generally more knowledgeable and competitive intelligence is readily available through the internet and word-of-mouth, the B2B marketer’s positioning challenge is a matter of both art and science

B2B Pricing: As a critical component of Positioning, and a key variable in your financial returns, pricing is an art and a science, but for the business customer the price of your product or service is often being calculated into their cost of goods, which factors into their overall profitability and shareholder value. Business buyers rarely act on impulse, but the extra scrutiny they give to your proposal does not necessarily imply that they always go for the low price. Quality, service and contractual protection, as well as business relationships, matter quite a bit since they know their own customer satisfaction often succeeds or fails based on their customer's experience with your offering. In addition, your price structure impacts their profitability depending on how it is capitalized or expensed on their books. The result is that the business market can be convinced to pay premium prices more often than the consumer market if you convey value through pricing and terms.  

B2B Promotion: Promotion planning is relatively easy when you know the media habits of your customer base, not to mention the messaging vocabulary unique to their segment. However, in the B2B sale, when so many individuals are involved in the recommendation and purchase process, with so many different needs, biases, personality types and media habits it’s also important to know what motivates them, how they make their decisions, and where they turn for decisive information. While there are many creative approaches in putting together a promotion plan for a B2B sale, there are usually ‘things that work’ in each industry for each type of product. Specific trade shows, analysts, publications, blogs and retail/wholesale outlets tend to be fairly common to each industry/product area. Developing a communications strategy to address these industry-specific information outlets and reach the target audience is the first step to success.  

In the area of promotion, new social media technologies and channels offer new promotional vehicles. For these new channels, however, there is not yet much "standard" activity in most industries. However, business buyers are becoming more active in social media and it is important to research your industry segment to be present where social media activity is already taking place at a level appropriate to your budget and target market. Such a presence allows you to "listen" to what is being said about your company, respond when necessary and to be ready for greater investments in these channels when and if they begin to mature for your segment.

B2B Place (Sales and Distribution): The importance of a knowledgeable, experienced and effective direct (inside or outside) sales force is critical in the business market. If you sell through distribution channels, the number and type of sales forces can vary tremendously; and your success as a marketer is highly dependent on their success. To complicate an already complicated situation, it’s no secret that marketing and sales people differ in personality types and motivations. The successful B2B marketer understands these differences and knows how to turn them into strengths so that marketing can support sales effectively and form a solid team taking your company’s products and services to market.

What about selling to other kinds of organizations? Governments? Educational institutions? Non Profits? International organizations? Each of these markets is more like the B2B market than B2C, but like the business market they each have many specialized requirements and sub-segments. We look at B2G marketing specifically in a similar article.

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