B2B Marketing

When we hear the word 'marketing', we usually think about specific tactics and campaigns used to attract individual customer groups to a particular product. However, marketing goes beyond selling products to individual customers. Business-to-business (B2B) marketing plays a massive role in generating revenue for many companies worldwide. The B2B marketplace, however, is different from business-to-customer (B2C) markets. As a result, the buying situations, behaviours, and processes also differ. Read along to find out why, and become an expert in B2B marketing!

B2B Marketing Definition

To understand business-to-business (B2B) marketing, we first have to look at business buying behaviour. 'Business buying behaviour' studies how companies buy goods and services for production or resell them to other customers. It may also refer to the buying behaviour of wholesalers and retailers who rent or resell certain goods to other organisations.

Here are some common assumptions about business markets:

• B2B decision-makers are always rational; therefore, B2B advertisements are boring and emotionless.

• Sales representatives promote B2B branding.

• B2B marketers make decisions based on gut feelings during country club meetings.

However, nowadays, these B2B stereotypes are no longer valid. Although business buyers still act rationally, business decisions and marketing are also driven by factors such as human emotions and perceptions. Digitalisation has also shifted B2B marketing focus from product features to 'humanisation' of customer experience.¹

B2B vs B2C Marketing

B2B marketing can be distinguished from B2B marketing based on the nature of its customers. In B2B markets, the customers are organisations (see Figure 1 below), and they can be:

1. Commercial enterprises - for example, a manufacturing firm requires industrial goods (e.g. parts or tools) to use in its manufacturing process, which it then turns into final products.

2. Governmental bodies - for example, a local council might buy industrial goods to deliver certain services or facilitate operations.

3. Other institutions - for example, a school might also buy industrial goods to deliver certain services and to carry out its operations.

Figure 1. B2B Customers - StudySmarter Originals

B2B marketing can be distinguished from B2C marketing based on market characteristics. They include:

• B2B markets usually contain fewer but larger buyers. For instance, a B2B customer might purchase 50 aeroplane tickets at once to fly an entire team out to a conference. In contrast, an individual customer will likely purchase just 1-2 aeroplane tickets at once.

• Demand in business markets also tends to be more inelastic in the short run. For example, a slight decrease in aeroplane component prices will not likely influence Boeing's order and production volume.

• B2B decision-making is conducted professionally. Purchasing in B2B markets usually involves many decision-makers professionally trained in making technical purchases.

• The business buying process is more formal and more complex. As organisations often purchase large quantities of products where a lot of money is involved, purchase decisions and more complicated (from a technical and economic perspective) and therefore, the buying process is longer.

However, this is not to say that B2B and B2C markets are entirely independent. Ultimately, business buyers try to produce goods and services that satisfy consumer needs. Therefore, B2B and B2C are linked by the nature of demand in B2B markets - demand in B2B markets is derived from consumer markets.

B2B Marketing Strategies

When considering B2B marketing strategies, it is essential first to observe the B2B buying situation and buying process.

Buying situation in B2B markets

The level of experience an organisation has with purchasing a particular type of product may allow for a shorter buying process. In other words, first-time buyers are likely to act differently than repeat purchasers. As a result, there are three main types of buying situations:

1. New task buys - a company buying a product for the first time. Here, the perceived problem or need is entirely different from previous purchases. There are higher levels of risk involved, and decision-makers focus on collecting as much information as possible.

2. Straight rebuy - the organisation repurchasing a product without any modifications. In this case, the buyer acts out of routine and looks for no or very little information.

3. Modified rebuy - when the buying organisation wants to change terms, prices, or product specifications. This happens when the purchasing organisation sees a potential benefit in reevaluating the purchase and seeks additional information.

The buying process in B2B markets

Now that we understand the buying situation, let's look at the buying process in B2B markets.

Before doing so, we need to define which organisational members play a role in the purchase decision process. Users are logically the ones using the product and often initiate the purchase proposal. Influencers are the ones observing the specifications and supplying information on alternatives. Buyers are people selecting suppliers and negotiating. Deciders have the authority to choose and approve suppliers, whereas gatekeepers control the flow of information.

The buying process is as follows (see Figure 2 below):

1. Problem recognition or opportunity identification - can be triggered by internal or external forces.

2. Description of needs and product specifications - defining the requirements and characteristics of the product.

3. Supplier search, acquisition, and analysis - evaluating the various suppliers' proposals.

4. Supplier and order selection - choosing the supplier, date, and terms of the order.

5. Post-purchase evaluation - considering whether any modifications are required, whether to continue the relationship or switch suppliers.

Figure 2. The Buying Process - StudySmarter Originals

Customer retention strategies in B2B marketing

In B2B marketing, maintaining customer relationships are essential, as keeping customers is usually more economical than finding new ones. Therefore, effective customer relationship management (CRM) systems should be in place for all B2B organisations. For large organisational buyers, key account managers can help facilitate these relationships.

However, for other, smaller but profitable customers, the organisation should focus on:

• Providing superior value,

• Offering a set of core and add-on benefits that suit the client's needs,

• Trying to reduce the client's operational costs with an outstanding offering.

To achieve this, the seller should also focus on the 'people' component of their operations - hiring efficient salespeople, ensuring the sales team is happy/satisfied with their job, and incentivising the sales team.

B2B Inbound Marketing

Inbound marketing in B2B is about aligning digital marketing efforts with the buyer's decision-making and buying process. The main goal of inbound marketing is to attract buyers to engage with the seller's business by providing them with various digital resources. These digital resources may include blogs, email marketing, websites, social media, mobile apps, etc. Potential customers have access to these tailored resources and thus can find out/learn more about the business whenever.

Due to the rise of e-procurement, digital and social media have also become effective methods for engaging business customers.

Digital and social media have strengthened the relationship between buyers and sellers beyond the way traditional methods like personal selling could. The new digital process allows for instant connections and engagement at all times from anywhere around the world.

B2B Marketing Examples

An example of B2B marketing can be observed through Amazon. Amazon initially started as an online bookstore, and during its journey of becoming one of the largest online retailers, the company has focused mainly on consumers. However, a couple of years ago, it decided to tap into the B2B market, which, in the UK, is worth around £96 billion. Amazon's goal is for business customers to buy everything from office supplies to IT products to power tools on its website. The Amazon Business space also offers reporting and analytical tools for business customers to track their spending and budgets.³

Amazon Business uses several inbound marketing tools to attract business buyers onto its platform. The company runs a blog which guides buyers on how to purchase on Amazon Business, optimise product search, and streamline operations through the various tools Amazon Business offers. Amazon's business website also features multiple customer success stories, and the company posts videos and webinars on how to use the tools and services provided by the platform. As a result, through a simple Google search or a scroll through its website, Amazon engages a variety of customers to find out more about its service and tailors their experience according to their needs.