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 principals of marketing. In B2C, B2B and B2G marketing situations, the professional 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 a single person that pulls out their wallet. A B2B sale is to an organization. And in that simple distinction lies a web of complications that differ because of the organizational nature of the sale and which 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 P’s + Branding” marketing mix is affected by the B2B uniqueness. All these themes will be explored in greater depth in this blog and the B2B Expert’s Forum as well, so sign up for them, contribute your experience and together we’ll all be smarter!

Read on to see how Branding and the 6 Ps apply to B2B Marketing.

 

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 with relatively structured procurement processes. By contrast these processes are considered “rational,” as though every proposal will be evaluated on its merits alone. This understanding essentially equates with a belief that robots are in charge of company procurement process and that reputation makes no difference. Of course, these are weak presumptions. B2B Branding is a highly profitable investment when done well because it makes the decision makers more comfortable in their selection of a strong proposal. However B2B branding is different from B2C in some crucial ways, including the need to closely align corporate brands, divisional brands and product/service brands and to apply your brand standards to material often considered “informal” such as email and other electronic correspondence.

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

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.

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 often harder to acquire, the B2B marketer’s positioning challenge is a matter of both art and science.

Pricing: Pricing is a definite science in all kinds of marketing, 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. This means that they are rarely impulsive buyers, but the extra scrutiny they give to your proposal doesn't 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 experience with your offering. In addition, the price structure of your product or service can make a difference 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 know how to structure your pricing and payment terms well.

Promotion: Promotion planning is relatively easy when you know the media, information seeking and decision making habits of your customer base, not to mention the 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 hard to know where to start. While there’s no single answer to the perfect 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. What this means is that once you figure it out for your industry/product, the promotion plan almost writes itself (depending on your budget) but figuring it out can be a special skill and it takes time to build up experience in your specific field.

Place (Sales & Distribution): The importance of a knowledgeable, experienced and effective direct (inside or outside) sales force is often critical in the business market. If you sell through distribution channels also, 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 are very different personality types who are motivated and think differently. 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 the 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 and will explore some of the relevant nuances of the other markets in the B2B Expert’s Forum.

>>Download This Article