Why Is B2B Marketing Special?

Business-to-business marketing is about meeting the needs of other businesses, though ultimately the demand for the products made by these businesses is likely to be driven by consumers in their homes.

We believe that there are ten key factors that make business-to-business markets special and different to consumer markets. These are described below.

1) B2B Markets Have A More Complex Decision-Making Unit

The decision making unit (DMU) in business-to-business markets is highly complex or at least it has the potential to be so.Ordering products of low value and low risk may well be the responsibility of the office junior.  However, the purchase of a new plant that is vital to a business may involve a large team who makes their decision over a protracted period.  The DMU at any one time is often ephemeral – specialists enter and leave to make their different contributions and, of course, over time people leave the company or change jobs far more frequently than they change family unit.

The Risk-Value Purchasing Decision Matrix

Above divides business-to-business purchases into four categories according to their financial value and the level of business risk associated with the purchase.  Each of these categories gives rise to different purchasing behaviour and different complexities.

• Low-risk, low-value purchases are the least distinct from consumer purchases.  They often involve just one, frequently junior person.  There is little financial or business risk involved on getting the decision wrong, meaning that relatively little thought goes into the decision.
• Low-risk, high-value items such as raw materials typically involve a mixture of technical and purchasing personnel, and often very senior people such as board members.  This complexity is necessary to ensure that price is minimised without impacting upon quality.  Purchasing personnel would usually be the key decision makers on a transaction-by-transaction basis, under the general guidance of more technical employees, who would review suppliers periodically.
• Low-value, high-risk items such as office insurance would similarly involve a mixture of specialists and purchasers.  As the ‘risk’ is in the product rather than the price, and as each transaction is likely to be unique, an expert would tend to be the key decision maker every time a purchase takes place.
• High-value, high-risk purchases are the most distinct from consumer purchases, with a large number of senior decision makers evaluating a large range of purchase criteria.  In the case of plant equipment, we might expect a CFO, R&D Director, Production Director, Purchasing Director, Head of Legal Department, CEO and a number of upper-management department heads to be involved.

2) B2B Products are often more complex

Just as the decision making unit is often complex in business-to-business markets.

Where the purchase of a consumer product requires little expertise (perhaps nothing more than a whim), the purchase of an industrial product frequently requires a qualified expert.  Where consumer products are largely standardised, industrial products are often bespoke and require high levels of fine-tuning.  Even relatively complex consumer products tend to be chosen on fairly simple criteria.  A car might be chosen because it goes fast and looks nice, and a stereo might be purchased on the grounds that it is tremendously loud.

Even simpler industrial products, on the other hand, frequently have to be integrated into wider systems and as a result have very specific requirements and need intimate, expert examination and modification.  It is difficult to imagine a turbine manufacturer or commercial website design buyer having a look at three or four products and then choosing one simply because it looks nice.  The choice of turbine will involve a whole host of technical, productivity and safety issues, whilst the choice of website might be based on its integration into a wider marketing campaign, its interactivity with users and the degree to which it draws potential clients via search engines.

Buyers of consumer products are generally not interested in the technical details of what they are buying.  The vast majority of car buyers are far more interested in what speed the car will reach than in how it will reach that speed.  Similarly, the buyer of a chocolate bar is likely to be far more interested in the fact that the item stops them feeling hungry and tastes nice than in the technology and ingredients that make it so.  As a result, consumer products are frequently marketed in ways that are superficial or even vacuous.

3) Personal Relationships Are More Important In B2B Markets
An important distinguishing feature of business-to-business markets is the importance of the personal relationship.  A small customer base that buys regularly from the business-to-business supplier is relatively easy to talk to.  Sales and technical representatives visit the customers.  People are on first-name terms.  Personal relationships and trust develop.  It is not unusual for a business-to-business supplier to have customers that have been loyal and committed for many years.

The importance of personal relationships is particularly pronounced in emerging markets such as China and Russia, which have little culture of free information, historic quality problems with local suppliers, and – in markets where the concept of branding is still emerging – little other than their trust in the salesperson on which they can judge the provenance of the product or service they are buying.

4) B2B Buyers Are Longer-Term Buyers


Whilst consumers do buy items such as houses and cars which are long-term purchases, these incidences are relatively rare.  Long-term purchases – or at least purchases which are expected to be repeated over a long period of time – are more common in business-to-business markets, where capital machinery, components and continually used consumables are prevalent.

Furthermore, the long-term products and services required by businesses are more likely to require service back-up from the supplier than is the case in consumer markets.  A computer network, a new item of machinery, a photocopier or a fleet of vehicles usually require far more extensive aftersales service than a house or the single vehicle purchased by a consumer.  Businesses’ repeat purchases (machine parts, office consumables, for example) will also require ongoing expertise and services in terms of delivery, implementation/installation advice, etc that are less likely to be demanded by consumers.

Finally, business customers tend to be regarded as long-term customers more than consumers do for the simple reason that there are fewer business customers about, and the ones that do exist are more valuable!  The benefits of retaining a B2B customer are often enormous, and the consequences of losing them very serious.




Reference:B2B International
URL:http://www.b2binternational.com/publications/white-papers/b2b-marketing/