Business to Business Marketing

Business-to-business marketing is currently one of the fastest-growing areas of marketing. As technology brings more businesses together, companies are beginning to interact with each other far more aggressively. eSSORTMENT [online]

Business to business marketers promote goods and services that will help other companies run. Some of the things businesses produce for other businesses include equipment, components, raw materials, processing services and supplies.

There are 3 main different types of organisation that deal in business to business buying and selling, these are:

• Government organsiations (health and education etc)


• Institutional organisations (not for profit, charities etc)


• Commercial organisations (distributors and retailers etc)

The most common business-to-business markets are manufacturers, resellers, the government and non-profit institutions. Most businesses that fall into these categories do make some money from a consumer base; however, the majority of their capital is made from other businesses.

An example of this is a non-profit institution. While private donations from individuals like you and me is important to a non-profit's operations, most charitable organizations make the majority of their money from corporations or through government funding. Because of this, non-profits must make themselves and their products and services attractive not just to individuals, but also to other businesses.

Kotler's Buyer Decision Model is a vey important concept that businesses follow when considering selling/purchasing to or from another business. Whilst a consumer may miss out the middle stages of Kotler's process when buying something on impulse or heuristically, a business will follow each step thoroughly because of the high risk that the purchase or sale may hold.

Whereas sales promotion may be used in business to consumer marketing, with B2B, personal selling is a more common method used. This can help build and strengthen relationships between businesses and create a more personal selling style. This method of selling helps to form good customer relationship management, without a close relationship between businesses, sellers and purchasers may look elsewhere for business.

Advantages of personal selling are:

• There is a relatively high degree of personal attention given to the prospective buyers.


• The sales message can be customised to meet the needs of the customer.


• Questions and concerns can be answered promptly and directly.


• Frequent face to face meetings help to build strong long term relationships.

Using personal selling for a public consumer rather than with a business would mean that a very small sector of the market could be targeted at one time, the message would only be given out to a few people rather than a mass of the population. This is why a method such as sales promotion is used more widely with consumers, it reaches a large proportion of the market quickly, with little effort needed by the sales team. Personal selling however requires a lot of effort and works well for B2B, as a business will only want to focus on one company at a time to give them their upmost attention, hoping to build strong and personal relationships with potential high expenditure buyers.

There are a number of factors that a business will consider when choosing a company to buy from or sell to. These factors affect something called the demand elasticity. The more businesses offering the same product at competitive prices, the more elasticity and flexibility with the decision of who to choose.

One factor is the availability of substitutes. The more substitutes, the more elastic the demand will be. So long as the substitutes are selling for prices at a competitive rate, the potential companies that are looking to buy will not be choosing by the price factor, but by how the business impresses them. This is why businesses selling to other businesses need to make themselves look appealing and advertise themselves to be one step above the rest. Personal selling is therfore a good way of communicating their strengths directly to the potential buyer.

The amount of income available to spend on the good also affects elasticity. If the price of the good increases but the budget for expenditure does not, this will trigger an elastic reaction in demand. Demand will be sensitive to a change in price if there is no change in income available to be spent.

Leasing a product is also an option if there is not enough funding available to buy the product outright. This may be the case for high technology products that require a lot of money to buy, as well as porducts that will become obselete too quickly after being purchased.

The amount of potential clients the product can target is a huge factor that affects how close the buyer-seller relationship is. If there is a product that appeals to most of the population, it is not so vital to create and sustain high and close relationsips with the buyers. If the product however is only relevant for a minority target group, customer relationships are going to be very important due to the fact that the sellers of the product cannot afford to lose their potential and current buyers.

If you want to find out whether you have the potential to work in the field of B2B, have a look at this link. It is a small quiz to find out whether you would go the right way about clsoing a deal with another firm. BNET send me their daily newsfeed and today it was this...good timing or what! I dont think B2B selling is for me! Read through the scenario and then follow the steps!