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Business buying is where it buys products and services from
another business for use in its activities. The buying operation refers to the
actions of the business (its employees or agents) in buying products and
services for its use, including the of selection of suppliers and bearing the
consequences of its purchase.

Businesses buy products in larger volumes for use in production of
another product or for their own use. They buy such products which they refine
to provide additional value for selling to Consumers.  These products include raw material, final
products for company use, and ancillary items such as office stationary, etc.

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Within the buying process for B2B companies, a number of areas need
to be considered;

i)                   
What
conditions do our customers’ buyers operate in?

ii)                  
Which
people/departments are involved in the business-to-business buying process?

iii)                
Who and how are
business buying decisions made?

Major differences in B2C and B2B markets can be seen in a number
of areas;

Mindset – the
reasons for purchasing varies between B2B and B2C.  A business is usually purchasing on a “needs”
basis, whereas consumers are often purchasing on a “want” basis.

Many consumer purchases are discretionary products that people may
want but don’t necessarily need, such as consumer electronics or travel, and
the buying behaviour can be based on characteristics such as style, fashion or
peer acceptance.

In contrast, businesses usually buy a solution to a need –
products that are required for daily operations, or to solve a specific
business problem. Their need pre-exists. Product performance characteristics
are far more important than the image of the product. Business buyers are less
emotional and more task oriented.  It’s simply a matter of finding the
supplier who can best fulfil that need.

Planning – Most purchases made by a business are planned well
in advance, whereas purchases might be impulse buys for a consumer.  When ordering new equipment, a business may
make contact with the selling business, arrange to see a sales representative,
may arrange samples, may undertake trials, and may speak to a number of
Companies. 

A consumer
ordering such equipment may visit a website, perhaps visit a shop, discuss with
friends, but the decision is far more likely to be an impulse decision.

To be able to
accommodate both business and consumer purchases, the company needs to have a
structure in place that allows businesses to plan their purchases while still
offering impulse options to consumers.

Buying
Process – the process of
buying in B2B is vastly different to B2C buying due to influences  such as the greater size volume, and value of
the markets, the greater numbers involved in the buying process, and the fact
B2B markets can be highly specialised in comparison to B2C.

One to One relationships – In consumer
marketing, the relationship often ends with a remote transaction made through a
retailer. The manufacturer rarely makes personal contact with the consumer.

In business marketing, the buyer-seller proximity
is reversed. In most cases the supplier visits the customer in person and
establishes a true one-to-one relationship with the customer over an extended
period of time.

Expert
Buyers & Multiple Decision Makers – Consumer purchases typically involve an individual decision maker in a
single-step transaction.

Compared with consumer decision
making, business buying behaviour is characterized by a formal multi-step
process conducted professionally over a period of time, involving many people
interacting within a formal organization.

Customers’
Product Knowledge – Consumer marketing is
aimed at a mass market and doesn’t require deep knowledge of the product or
supplier to make a purchase decision.

Business buyers are comparatively
more sophisticated and educated than consumers. The business customer has years
of training in his or her field and often knows more about the product and its
application than the B2B marketer.

The
expertise of business buyers falls into two categories: buying process or
technical expertise. Procurement managers are buying experts whose sole
function is to procure products and services on behalf of the company.
Technical experts and users possess a strong understanding and interest in the
problem to be solved and the product being marketed as the solution. And
throughout the sales process business buyers continue to learn about a
supplier’s cost structures, production methods, development expertise and financial
viability.

 Stronger
Customer-Centric Focus – B2B marketing
requires that all parts of the business be customer-oriented and that all
marketing decisions are based on a complete and accurate understanding of
customers’ needs. B2B companies are usually closer to their customers and more
knowledgeable about their needs than the typical consumer company.

 

Decision-making –
In most B2C purchases, the consumer
decision-maker is usually the person that ultimately buys the product.  A consumer buying an individual laptop is
likely to be the person who will use that equipment.  A business purchasing process starts with an
idea and then goes through a formal approval process. The person that makes the
final purchase is often a purchasing agent or departmental representative.  It is likely that the purchaser may not be
the final user of the equipment, and they may be buying in volume.

Support – Support
contracts play a much more important role in B2B marketing decisions for many items.
As an example, for the purchase of a photocopier, an extended period of
warranty and a rapid call out service is likely to be required, and this will
be factored into the buying decision.

On the other
hand, consumers are much less likely to factor in the terms of the warranty in
a purchasing decision, although it will still be important.   It is
often sufficient to satisfy a consumer for a business to simply having adequate
customer support and back-up for a product. 
It is unlikely that a four hour call out facility will affect the buying
decision for consumers.  A business is
likely to insist on these warranty and call-out terms as part of the purchase
conditions.

History – Many businesses places great stock
on previous business relationships, preferring to deal with businesses
and customers they know and trust.  This can often be of great influence in the buying decisions
for the company. As an example, if a business has a dealt with the Company
previously, then pricing contracts, dedicated support personnel, terms and
conditions and personal preferences of the business/staff are already
established.   Individual consumer are more likely to compare
prices and offers between companies, but are less likely to factor in supplier
relations.

 

 

 

 

 

 

B2B marketing is highly
complex, continually changing and needs to have a detailed level of formulated planning.

B2C and B2B markets share a
number of primary strategies, including;

i)                   
The definition of the target
market

ii)                  
Attempting to give added and
unique value to the product

iii)                
Means of reaching out to the
target audience

iv)                
The setting of goals

v)                  
The need for continued assessment
and modifications of the plans

There are also many shared facets
in the approach of marketing between B2C and B2B markets.  Both are businesses selling to consumers,
either online or offline, both make use of marketing events, direct marketing, internet
marketing, advertising, public relations, word of mouth and alliances to assist
in their selling.   However, the
implementation of these strategies, what they say, and the outcome of the
marketing activities are fundamentally different.

As a
successful established Company, GTech already has strategies in place for the
B2C market.  The challenge will be how to
modify these to suite the B2B market.

In B2C marketing, decisions
such as buying a new car or planning a family holiday, are usually confined to
the small family unit, while items such as clothes, food and personal care
products usually involve just one person. In contrast, in B2B the
decision-making unit can be highly complex, with the target audience made up of
groups of constantly changing individuals with different interests and
motivations.  Buyers seek a good financial deal, superior quality and
often low risk. 

Perhaps the most important
difference is in the mindset of the two markets in terms of purchases.  Businesses tend to work hard to streamline the buying process
to save time and money, making the decision primarily based on logic, whereas
with consumers a purchase is based much more on emotion.

To set up a B2B marketing plan
based as an extension around modifications to the existing B2C offering, it is
important to understand the differences in the mindset of the two consumer
sections.

With B2C marketing, there are;

i)       
Fewer,
larger customers

ii)      
Purchases made for individual or household
consumption

iii)    
Decisions usually made by individuals

iv)    
Purchases are often based on brand reputation,
personal recommendations with little or no product expertise

v)      
Multiple
sales calls

vi)    
Derived
demand

With B2B marketing, there are;

i)       
More buyers with different functions

ii)      
Averages over 4 people involved per purchase

iii)    
Goals & risks

iv)    
Purchases made for a purpose rather than
personal consumption

v)      
Purchases based on primarily rational criteria

vi)    
May engage in lengthy decision processes

vii)  
Specialists

viii)  Business buying involves a more professional purchasing effort

B2C is often termed a numbers
games, whereas B2B can be termed a value game. 
A B2B plan will need only a smaller higher value number of customers to
be successful.

It is not about the product, it’s about the people using the product
and/or service.

It must also be recognised that buyer demand is derived from final consumer
demand, and that that demand fluctuates quickly.

 

 

Implementation

GTech clearly has a successful marketing operation in place,
works very well in the B2C market. 
GTech’s task is to adapt this operation to attempt to gain traction in
the B2B market, making the assumption that the same products are to be offered
to the B2B market.

The Company already has an offering that addresses;   

n  Customer Value

n  Competitive Advantage

n  Concentration of focus (segmentation)

n  Alignment of resources

n  Anticipation of changing customer
needs

What needs to be considered is how this offering can be tweaked
to be of interest to the Business Market.

The questions GTech needs to ask itself, in relation to its
shift to the new strategy, are;

iv)     What is my market and how does it
segment?

v)       Which channels do we want
to be in for sustainable profit?

vi)     How do we differentiate our offer
from our competitors?

vii)   How do we communicate this offer to
other businesses?

viii)  How can our company build strong relationships
with business customers?

ix)     A business market comprises all the
organisations that buy goods and services for use in the production of other
products and services that are sold, rented, or supplied to others

Action Areas

To implement the marketing of this new element of the
Company, I am suggesting the following key action areas;

The initial consideration will be to set in place the
offering that will be made to the B2B community.  The unique selling points of the products
will need to be given a different slant to be more appealing to the B2B
market.  Areas such as warranties,
after-care, returns policies etc must be given greater importance.

The “kick-off” to the venture A “heads-up” marketing event
by the Managing Director – to stimulate initial interest in the new venture, I
suggest Mr Grey uses his existing publicity channels to tell the business world
of his forthcoming venture.  This is
likely to be a mixture of TV, radio, business newspapers, and social media.

Once the business community have had their “interest
wetted”, the next stage will be to implement a suitable social media strategy.  This will need to be a different emphasis to
the social media strategy for the B2B section of the marketing.  Instead of a reliance on Facebook, Instagram
and such like, use will need to be made of LinkedIn and Twitter.

In addition, the content of the marketing will need to be
varied to be much more succinct, with different visual content and media form,
such as e-books, newsletters, etc.

There will also need to be modification to the Company
website.

This would need to be  of a different slant for the B2B world, with the
provision of a separate website for the B2B world, although perhaps a separate
section added to the existing website may be more appropriate, with the front
end with two sections (consumers as one, businesses as the other, with these
effectively being stand alone websites).

The B2B section of the website will need to be seen as a
lead generator, not an order generator as it is for the B2C section, and needs
to be written accordingly.

The next stage of the marketing plan would be a marketing event.  It is important that the additional offering is
promoted as a “new venture”.  This can
then be used to attract the attention of the business world to an important
business event.

A suitable venue should be hired, and the “great and the
good” of the target areas of the business world could be invited to see the new
proposition.

As a follow up to the marketing event, contact should be
sought with potential business customers, initially using existing contacts
from previous experiences of the Managing Director and the existing marketing
staff.

It is important for the Company to be able to make direct
contact with these buyers, and face to face meetings is the desired
outcome. 

As a successful existing Company, it already has a head
start against start-up companies, in that it already has a number of products
to offer.

The CEO of the Company and its marketing department will
already have a number of B2B contacts, through their previous business
experience.

It is likely that new marketing staff will be required who
possess differing skill sets to the existing B2C sellers.

The Company will also need to implement a lead generation
policy, alongside the lead nurturing, and this tends to be a more thankless
task which can take much longer to bear fruit.

Whereas with B2C markets the offer can be sent out to
unidentified individuals, with B2B the offer has to find its way to the desks
of the decision makers or buyers.

A number of lead generation companies exist, and these are
often engaged to provide databases of further companies, including contacts,
business criteria etc.

 

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