B2B marketing is when one company promotes its services or products to another company; as opposed to, seling directly to the consumer. It is a business interaction between two entities. Have you ever wondered how large companies buy their non-current assets such as office equipment, furniture, printers, and computers? Big companies never send their employees to BestBuy to order one thousand laptops. They do what is called Business to Business or B2B marketing. Regular consumers choose products based not only on their cost but also take account of emotional factors, the brand’s status and so on. When it comes to B2B marketing, companies decide based on profit potentials and price alone.
Social media has made B2B marketing even easier for businesses. It opened up a two-way conversation between companies. Many companies are more willing to make such transactions if they find each other on social media websites such as Facebook or Twitter.
B2B marketing is all about building strong and long-lasting relationships between companies. It does not matter if it is a massive multi-billion dollar company or a small family-owned store. Business to business market is the largest market on earth, exceeding the market of consumers by nominal value. Large companies such as IBM spend tens of millions of dollars daily to keep running.
Business to business marketing is mainly employed by companies that make products that regular consumers have no use for, for example, copper or steel. Those metals are primarily bought by companies who then process them and come up with a product that people can consume. However, there are also some businesses which make deals with both large corporations and people. For example, fiber optic internet providers supply businesses with high-speed internet as well as bring the internet to hundreds of thousands of homes.
• Companies that need a large number of materials to build something, such as construction firms that buy sheets of steel to build skyscrapers.
• The most significant target of B2B marketing is government agencies, schools, hospitals, and other institutions.
• Businesses that resell products such as wholesalers or brokers.
The nature of demand is different. Demand is derived initially from consumers for example. In the commercial aviation industry, consumers determine the number of flights and what they are prepared to pay. However, each aircraft is a product of hundreds of supplier organizations. Air passengers stimulate demand. Demand is also variable in business markets just because it is derived. Fluctuations derive from consumer preferences and behaviors. This means that businesses have to keep an eye and predict demand as cycles come up. Lastly, the demand for raw materials is inelastic. If a company has incorporated a differentiated product into its processes, sudden changes in price must be absorbed until a new product with different and cheaper parts are developed.
B2B relationship focus is about building collaborative relationships based on trust and commitment by both B2B partners. Relationship management is at the heart of B2B marketing strategy and requires a lot of attention to gaining customers and maintaining long term growth.
In summary, we have developed a working definition of B2B marketing and explaining its characteristics.
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