Defining Business Marketing
Business marketing includes all activities involved in communicating the value of a business’s products and services to another business.
Define business marketing
- Business marketing is often directed to individuals within an organization, who act on behalf of the needs of the organization.
- Business-to-business marketing involves any products or services a company purchases to resell, use as components in their own products or services, or to support their daily operations.
- Any given business-to-business transaction can involve years of complex marketing efforts, including online and offline promotions.
- white paper: A factual write-up of something, specifically devoid of the appearance of marketing.
- customer relationship management: A widely implemented model for managing a company’s interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. Also known by the acronym “CRM. “
- trade show: An exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products and services, study activities of rivals and examine recent market trends and opportunities.
What is Business Marketing?
Business marketing is the practice of individuals or organizations (i.e., commercial businesses, governments, and institutions) promoting and selling products and/or services to other organizations. These organizations resell or use these products and services to support their operations. Companies that act as suppliers or manufacturers may also integrate other business products into their own product offering to improve performance and functionality. Unlike a consumer, who makes a purchase based on his or her individual needs and desires, businesses appoint individuals who act on behalf of the organization.
B2B Promotional Mix
Like business-to-consumer (B2C) marketing, business-to-business (B2B) marketing, or business marketing, relies on product, price, placement, and promotion to competitively position the product offerings, promote the brand, and efficiently use company resources. Similar to consumer marketers, business marketers must create an integrated marketing communications strategy to ensure products and promotional methods complement and support each other.
B2B marketing spans all types of businesses and industries. Because B2B sales tend to be much larger than consumer purchases, business marketers use different channels to reach their target audiences. Industry white papers, trade shows, corporate websites, and webcasts are often used as promotional tactics to build brand awareness and generate leads. A significant portion of B2B brands also employ social media, including podcasts, social networking, and blogging sites, to drive web traffic to their online channels and draw prospective customers to their brand.
Measuring B2B Marketing Success
Customer relationship management (CRM) systems are often used to assess marketing performance in B2B organizations. B2B sales cycles can last more than several months and involve numerous stages before the sale is completed. Therefore, CRM systems help business marketers integrate metrics from different activities to accurately assess how marketing directly contributed to the transaction. For example, labels may be assigned to certain promotional elements (e.g., website, trade show) in the system to indicate where and how prospects converted to customers.
B2B vs. Consumer Marketing: Similarities and Differences
B2B markets to individuals acting on behalf of organizations, while consumer marketing targets single individuals who pay for their own transactions.
Describe the main similarities and differences between B2B and B2C marketing
- Whereas emotional factors play a large part in a consumer ‘s decision to purchase a product, B2B purchasing decisions are less emotional and more task-oriented.
- Lengthy and complex sales cycles help build strong B2B seller-buyer relationships and brand loyalty compared to B2C marketing.
- Business marketing generally entails shorter and more direct distribution channels to target audiences.
- B2C and B2B marketing objectives both reflect the fundamental principles of the marketing mix.
- webcast: A video and or audio broadcast transmitted via the Internet.
B2B versus Consumer Marketing: Similarities and Differences
Consumer marketing, or business-to-consumer (B2C) marketing, sales are made to individuals who are the final decision makers, though they may be influenced by family members or friends. A business marketing, or business-to-business (B2B) marketing, sale is made to a business or firm.
Whereas emotional factors play a large role in B2C purchases, B2B purchasing decisions tend to be less emotional and more task-oriented than consumer buyer markets. Business customers often look for specific product attributes such as economy in cost and use, productivity, and quality. Additionally, B2B purchasers generally spend more money, as the buying process tends to be more complex and lengthy.
While consumer marketing is aimed at large groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in business marketing. Sales representatives and marketers are often assigned to market to individuals who act as influencers or decision-makers in the customer organization. The bulk of a consumer’s interaction with a brand typically happens via an advertisement, promotion, or transaction. In contrast, B2B marketing can include numerous meetings between the seller and buyer before a transaction occurs.
For example, B2B marketers often present products and their benefits in private presentations to key decision-makers. The B2B organization may also invite prospects and customers to public or private events to facilitate further conversations. As a result, confidence and trust are gradually built between the seller and buyer over a period of time. Significant time and money are spent during the evaluation and selection process, resulting in strong brand loyalty among B2B customers.
Although on the surface the differences between business and consumer marketing may seem obvious, there are more subtle distinctions between the two, with substantial ramifications. The evaluation and selling process for B2B purchases are longer and more complex than consumer purchases. However, business marketing generally entails shorter and more direct channels of distribution to target audiences. Different aspects of the promotional mix can be easily personalized due to the relationship between a B2B salesperson and the individual buyer.
Most business marketers commit only a small part of their promotional budgets to general advertising, usually through direct marketing efforts and trade publications. For example, a business marketer may allocate spending to banner advertising or paid search. Similar to consumer ads, these advertisements lead to landing pages, where marketing messaging aims to convince web visitors to submit a form, download a brochure, or register for a webcast. While business advertising is limited, it helps generate leads that marketing can pass along to sales representatives.
Similarities between B2C and B2B Marketing
Marketing to a business and marketing to an individual are similar in terms of the fundamental principles of marketing. Both B2C and B2B marketing objectives reflect the fundamental principles of the marketing mix, and in both situations, the marketer must always:
- Successfully match product or service strengths with the needs of a specific target market
- Position and price products or services to align products and service offerings with the market
- Communicate and sell products or services so that they effectively demonstrate value to the target market
Types of Businesses
Primary ownership types of businesses include corporations, cooperatives, LLPs, LLCs, and sole proprietorships.
List the most common ownership types and industry classifications for organizations
- Businesses vary depending on jurisdiction, ownership type, and industry or sector.
- Among the different ownership types for businesses are sole proprietorship, cooperatives, corporations, and partnerships.
- General classifications for businesses include: agriculture and mining, financial services, manufacturing, information technology, real estate, retail, distribution, transportation, and utilities.
- capital: Money and wealth. The means to acquire goods and services, especially in a non-barter system.
Types of Businesses
American economist Milton Friedman once famously proclaimed that “the business of business is business. ” Capitalist economies such as the United States rely on businesses to legally produce capital from the trading of goods and services. There are many types of business entities defined in the legal systems of various countries. Moreover, the types of businesses that exist today can vary by jurisdiction. Primary ownership types of businesses include corporations, cooperatives, limited liability partnerships (LLPs), limited liability companies (LLCs) and sole proprietorships.
Business Ownership Types
The type of business a group or individual creates will influence the legal and tax structure of the entity. The following are some of the most common ownership types for organizations:
- Sole proprietorship: A sole proprietorship is a business owned by one person for- profit, though the owner may hire and manage employees. The business owner has unlimited liability for the debts incurred by the business.
- Partnership: A partnership is a business owned by two or more people. In most cases, each partner has unlimited liability for the debts incurred by the business. The three typical classifications under for-profit partnerships are general partnerships, limited partnerships, and limited liability partnerships.
- Corporation: A corporation is a government-owned, publicly-owned, or privately- owned limited liability business that contains a separate legal personality from its members. It can also be a for-profit or non-profit corporation. Public for-profit corporations are owned by shareholders who elect a board of directors to direct the corporation and hire its managerial staff.
- Cooperative: Often referred to as a “co-op”, a cooperative is a limited liability business that can organize as for-profit or not-for-profit. A cooperative differs from a for-profit corporation since members, as opposed to shareholders, share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives.
Business Industry Types
Businesses also vary by industry due to the wide variety of products and service they offer to the market. The following industry classifications are usually applied to businesses:
- Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals.
- Financial businesses include banks and other companies that generate profit through investment and management of capital.
- Information businesses generate profits primarily from the resale of intellectual property. This includes movie studios, publishers, and packaged software companies.
- Manufacturers create products from raw materials or component parts, which they then sell at a profit. Companies that make physical goods such as automobiles or pipes are considered manufacturers.
- Real estate businesses generate profit from the selling, renting, and development of properties comprising land, residential homes, and other kinds of buildings.
- Retailers and distributors such as consumer-oriented stores act as middlemen in transporting manufactured goods to consumers. They make a profit by providing sales or distribution services.
- Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government, other businesses, or consumers. Typical service businesses include consulting firms, restaurants, and house decorators.
- Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs.
- Utilities produce public services such as electricity or sewage treatment, usually under a government charter.