Business to business marketing is basically doing transactions with other businesses. A good example of business to business marketing is when manufacturers sell the products to resellers for them to operate their own businesses. In business to business marketing, the customers are not the end consumers but resellers who are the ones who will sell the products to the end users. The other way of looking at business to business marketing is looking at the reseller as the distribution channel of the manufacturer. Both businesses benefit from the arrangement because the manufacturer gets to sell the products to more end users while the reseller earn from selling without having to invest on manufacturing.
On the other hand, B2B marketing is not limited to this relationship. One company can be supplying the equipment to another company. A company could also supply raw materials to a manufacturing company as well. Services may also be offered to various companies.
B2B versus B2C Marketing
While B2B refers to business to business transactions, B2C refers to the regular manufacturer to end consumer transactions. The two differs in such a way that in B2C transactions only one person needs to decide on the purchase while in B2B transactions demands a collective decision. Between the two, transactions go faster with B2C transactions. However, the transactions can be in volume with B2B relationships too. And lastly, what drives the B2B transaction is the need for the product or service. B2C transactions, on the other hand, are not only driven by need but more on by want as well.
B2B and B2C marketing also have a few similarities. For one, both experience growing competition and diminishing resources. Because of this, small businesses begin to lose their market share. This also results to diminishing profit margin. Of course, this is expected since the higher supply with a constant demand would generally result to lower prices and lower profit margin. To remain very profitable, B2B market research is essential. After all, knowing your market and your competitors is essential to thrive in your industry.
Why You Should Go into B2B Marketing
Businesses need alliances in order to bring their business to the next level. That is why manufacturers need resellers in order to reach more consumers. Since these resellers typically have networks already, distributing the product through them would be easier and faster. The company no longer has to establish stores in new locations where they don’t have a base in. They can concentrate on manufacturing the products instead. To accomplish this efficiently, the company needs a B2B strategy. This would allow you to identify, locate, quantify and target the right companies. You would also be equipped to deliver their demand on time. To maximize earnings though, you would have to evaluate all distribution channels from time to time so you can discard weak ones and concentrate on the productive ones instead.
Again, B2B marketing benefits all sides. It can even benefit the end user too as the product becomes more available.
Although, some companies use their existing contacts, but those who are unable to do that use the services of media agencies (interesting to know is that the Danish term is Mediebureau).