What is business to business marketing

While the term "marketing" usually conjures images of consumer packaged goods and advertising campaigns, business-to-business marketing is expected to dwarf the consumer side of the business in the next decade.

Forecasters expect domestic B2B purchases will total several trillion dollars a year. AMR Research predicts $6 trillion in U.S. volume in 2004. Forrester Research weighs in with a much more conservative $2.7 trillion forecast.

By either measure, those estimates dwarf what U.S. consumers are expected to buy online as the Internet matures: $269 billion in 2005, according to Jupiter Research.

More important than its relative size, however, business-to-business marketing is a complex discipline that has become integral to selling products or services to business, industrial, institutional, or government buyers.

In past decades, innovative products, great engineering, or great salesmanship alone might have been enough to close a business sale. But today’s shorter product life cycles and the intense pressures of global competition no longer allow the luxury of “build it and they will come?thinking.

B2B vs. B2C

The turbulent markets of the early 2000s lead people to joke that B2B now means “back to basics?and that B2C now refers to “back to cost.?But the real differences between marketing to businesses and marketing to consumers aren’t trivial.

Business-to-business marketing features:

• Transactions among and within value chains.
• Value primarily determined by business economic use.
• Small numbers of customers, many requiring personalized marketing, including customized products and prices..
• Large customers with formidable market power. (In B2B, your customers often are also your competitors.) Widely varying customer types and customer needs.
• Large-unit transactions.
• Complex and lengthy selling processes involving many players creating a demand decision chain.
• Deeper partnerships with members of the value chain, including customers.
• Channel management oriented up and down the supply chain.
• Sales focused on key account management, and multiple purchasing influencers (many of whom are not likely to be end users themselves).

Business-to-Consumer features:

• Transactions through the dealer to the end consumer.
• Value determined by end-consumer perception.
• Focus on brand management.
• Large number of generally similar consumers.
• Small transactions.
• Linear selling process, usually of short duration.
• Channel management oriented toward retail.
• Sales activity focused on the end user.

In a word, business marketing involves building profitable, value-oriented relationships between two businesses and many individuals within them.

Business marketers focus on a few customers, with usually much larger, complex, technically oriented sales processes. Statistical tools, data mining techniques, and other sorts of research that work so well in the land of consumer marketing where data sets are huge, must be fine-tuned and specially applied in the practice of the business marketer.