Marketing of industrial goods, most commonly known as ‘Business-to-Business Marketing’ (B2B) refers to a buying-selling arrangement between two or more businesses. Unlike ‘Business-to-Consumers’ (B2C) marketing where the buyer is the final consumer, where the buyer is a business entering into buying to facilitate its own business. B2B marketing involves an exchange of products and services for a price so as to facilitate the buyer’s production process or operations. The B2B and B2C marketing differ a lot because the customers differ in their buying objectives. The basic orientation of customers differs in B2B and B2C marketing. While in the case of B2C, the buyer’s purchase decisions are motivated by short-term benefits; in the case of B2B, the purchase decisions are influenced by long-term benefits. The B2C buyers mostly emphasize upon the price while choosing to purchase; same product wherever available for the lowest price would attract them. But industrial buyers look for value in the long-run. They emphasize not only on the price, rather the quality, service and economy of the offering in the long-run. Now let’s see how the differences in customers’ orientation impact the B2B marketing mix.
Marketing Mix: The Product
The product itself is different here. In the case of B2C marketing, the customer is offered final good or service suitable for consumption. However, in the case of B2B marketing, the product may be in the form of a raw product, semi-finished product, chemicals or anything that the buying firm needs for its production process or operations. The products are usually technically complex and are valued for the purpose they solve for the buyer.
Marketing Mix: The Price
The product and the customers differ in industrial marketing, so the pricing would also differ. Unlike in B2C marketing where the prices are fixed and are printed explicitly on the product’s packaging, the prices in case of B2B marketing are mostly negotiated. Usually, the sellers are asked to supply their quotes and the best quote offering the product at the lowest price is accepted. The industrial sellers can, however, earn a competitive edge in pricing by utilizing not only the economies of scale but also the economies of scope.
Marketing Mix: The Promotion
As far as promotion is concerned, the traditional promotional tools like advertising and publicity don’t work here. The sellers usually adopt sales promotion techniques to aware the prospects of the offering. The products are launched at trade fairs and exhibitions and various promotional schemes are offered to hike sales. However, relationship building is the key to promotion in case of B2B marketing. It mostly takes lot of time to develop trust in such transactions and therefore it is always better to retain customers, rather than neglecting them to attract the new ones. Word-of-mouth prevails strongly in industrial buying.
Marketing Mix: The Place
The physical distribution also adopts a different approach here. In B2C marketing, the product usually passes through the layers of intermediaries before it reaches final consumers. Multi-layered distribution system prevails in case of B2C marketing. But here the sellers have basically two options regarding distribution; either to distribute products through their own sales representatives or to hire an independent industrial distributor firm for the purpose. The supply chains are short in B2B marketing and the buyers are generally geographically concentrated.
- Reichard, C. (March 1985). “Industrial Selling: Beyond Price and Persistence.” Harvard Business Review.
- “The Changing World of Industrial Distribution.” Retrieved from: http://www.b2binternational.com/publications/articles/industrial-distribution/