A marketing strategy is a crucial prerequisite for success, no matter what business you’re in – whether retail, wholesale or even the service sector. A good marketing strategy will depend on the buyer set and the product – what works well for one business may not work at all for another. Marketing consumer products is typically quite different than selling inventory stock such as raw materials or industrial goods. Business to consumer marketing involves a focus on connecting with customers and, in particular, creating a perception of value and quality. On the other hand, business to business marketing typically involves a focus on practical solutions, low pricing and reliability.
B2B and B2C markets – what are they?
Business and consumer sales overlap significantly, particularly for small businesses who often buy inventory stock that is not needed in bulk from the same retailers as consumers. Firms who produce items that are used in business as well as domestically are therefore likely to engage in B2B as well as B2C marketing. That said, some markets are clearly B2B or B2C; very few households are likely to purchase industrial machinery or raw materials.
Picturing a value chain can be a useful way to differentiate between B2B and B2C markets. A firm producing snack bars and salty snacks is likely to participate in a number of B2B markets, both as a buyer and a seller. The firm purchases inventory stock from suppliers (who themselves participate in B2B markets). It then transforms these ingredients into a finished product which it sells via a distributor (another series of B2B markets). Consumers buy the products in supermarkets (B2C) and, in small quantities, direct from the manufacturer (B2C).
How do B2B and B2C differ?
Rightly or wrongly, a number of entrenched stereotypes exist about B2B purchasers. The B2B market is typically considered to be more ‘rational’ than the B2C market; consumers are understood to take into account a wide range of considerations including emotional appeal and lifestyle factors when purchasing products, whereas businesses have a more clear-cut decision making framework when procuring inventory stock. For this reason, B2B marketing tends to revolve around price, durability, supply chain reliability and lead times – all factors that directly affect a business’ productivity or profitability. On the other hand, firms marketing to consumers focus on factors such as value, fashionability or convenience. These factors can vary widely between market segments and demographics. Creating a consumer focussed marketing strategy is typically a much more complex endeavour than a marketing plan for business sales.
On the other hand, knowing exactly who to pitch to in a B2B setting can also be difficult. Procurement is rarely a single-person task; as the value of a transaction or relationship increases, the number of internal approvals required also tends to increase. Some of these approvals, such as finance and legal, do not have any real implications for marketing. Nevertheless, selling products to a large firm can involve securing the approval of subject matter experts (i.e. your real clients), procurement professionals and even the firm’s executives or board.
Topics: B2B, B2C, business strategy