Focus area - business markets

Marketing in businesses is different to marketing to consumers, although many of the techniques, such as branding, can be transferred successfully.

In particular, business-to-business markets (B2B) are more focused on customer relationships than is normally true for consumer markets.

Business vs consumer markets

To help explain the differences between business and consumer markets, It is worth drawing some comparisons between the two.

Consumer Business
Every customer has equal value and represents a small % of revenue There are a small number of big customers that account for a large % of revenue
Sales are made remotely, the manufacturer doesn't meet the customer Sales are made personally, the manufacturer gets to know the customer
Products are the same for all customers. The service element is low Products are customised for different customers. Service is highly valued
Purchases are made for personal use - image is important for its own sake Purchases are made for others to use - image is important where it adds value to customers
The purchaser is normally the user The purchaser is normally an integrator, someone down the supply chain is the user.
Costs are restricted to purchase costs Purchase costs may be a small part of the total costs of use
The purchase event is not subject to tender and negotiation The purchase event is conducted professionally and includes tender and negotiation.
The exchange is one off transaction. There is no long-time view (financial services differ) The exchange is often one of strategic intent. There is the potential for long term value

For both consumer and B2B markets, the foundation of marketing is based on knowing your customers. However, in consumer markets, the customer is remote, at arms length from you, and consequently you use mass communication and distribution tools.

In B2B the customer is much closer. You have far more knowledge of the customer through personal contacts, although this knowledge is typically ad hoc in nature and may be partial.

For a consumer market, the product and its packaging are of greatest importance to the customer in the marketing mix.

For B2B markets, although product quality is important, this has to be matched by quality of supply - delivering the product when it is needed, account service and support, and strategic flexibility within the relationship context. These supply chain elements may have more say in winning order than having a perfect product. This is not surprising as any supply chain problems create costs for the customer (eg stock, machine downtime, lost orders)

Because supply chain is often seen as logistical function in B2B markets, the role of marketing is limited to a role of creating promotional materials, attending exhibitions and running seminars. In these circumstances marketing may have no strategic role in the business and be operating purely as a printing and publishing outfit.

Ideally marketing needs to be heavily involved with the customer and in fact marketing in a B2B context is often referred to as delivering not just for your customer, but for your customer's customer. By taking a whole chain view, it can be possible to identify downstream opportunities for additional revenue and opportunities to use branding to stake out your position in the value chain.

For example Corus (was British Steel) produce pre-coated steel for use in domestic appliances and car manufacture. Pre-coated means the customer doesn't need to have a paint department to finish the manufacture and the end customer gets a better quality more resilient product.

For help and advice on marketing and research in business-to-business markets contact