Branding and sub-branding
In Business-to-Consumer (B2C) markets, the role of branding and sub-branding has already been highlighted, but Business-to-business (B2B) companies do not rely on branding as 5% of the decision-making is only based on brand influences. Some B2B companies have created sub-brands for every aspect of their product range in their urge to use branding strategies. However, the importance of relationship-building over brand-building for Business-to-business (B2B) has already been emphasized. Some Business-to-business (B2B) marketers are increasingly relying on the web and social media to reach out to the potential market.
Business buyers are far more focused on price and value than consumer buyers, as it directly affects their profitability. “Trends” and “style” hold much less importance in the business buying landscape.
Business-to-business (B2B) marketers need to focus on innovation
Products thrive on the innovative spirit of the companies that develop them. They, in turn, have to depend on other suppliers to fine-tune the devices and components. Since innovations are planned and successfully commercialized in the B2B market, the sellers need to work hand-in-hand to benefit from new market opportunities. B2B marketers need to undertake detailed market research, combining it with upstream information to build a complete market intelligence picture.
Business-to-Consumer (B2C) businesses are likely to be less risk-averse as they need to predict to the whims and irrational behaviour of consumers rather than the more calculated decision-making of businesses.
Building personal relationships
In consumer selling, the companies depend on the mass media to market their products- it includes newspapers, television, radio, internet, and at the physical level- banners, hoardings, arches, among others. Here, the several consumers who buy the products are not known to the company as the products are sold through wholesale and retail channels except in the case of some products such as Vaccum Cleaners, mobile phones, water purifiers, books that are sold online or directly at customer premises.
Here, brand building is more important and providing incentives to channel partners who include distributors, C&F agents, wholesalers, and retailers who in turn would push the product. However, in Business-to-business (B2B) marketing, building a personal relationship with the key decision-makers in the target company is very important. Often the marketing team members are the brand ambassadors. Therefore, the first impression of a company is formed during the first visits by salesmen to pitch for the account.
Less number of buyers and probably more sellers
Unlike a consumer market where there could be thousands and millions of buyers, the Business-to-business (B2B) market is more restricted to a limited number of perhaps large and medium scale buyers who have the option to choose from several suppliers. The Business-to-business (B2B) market works on the Pareto Principle of 80: 20, whereby eighty percent of the suppliers vie for 20% of the buyers in the market. However, the few key business buyers may be buying in large quantities compared to an average consumer in the market whose spending will be limited to a few thousand dollars for that product category.
The limited number of buyers presents a challenge and an opportunity for sellers as the process involves presentations, creating awareness, working closely with a client to make modifications to the product if required, do the selling process and thereafter provide after-sales service.
Unlike a normal consumer who buys from retail which could be triggered by a variety of factors including status, impulse buying, conspicuous consumption and so on, the business house buys based on rational analysis of cost and benefits to the company.
Consumers are less likely to have full information of the products or services they buy, but business houses base their buying on several parameters with the objective of making profits to the company or a return on investment (ROI).
With the proliferation of credit cards and more disposable income at the hands of a consumer, spending habits have changed. They could buy without cash in hand and pay in six months or one year equated monthly instalments.
The job of Business-to-business (B2B) marketers becomes challenging as the buying is based on critical analysis of pros and cons; however, buying could also be based on the reputation of the supplier and his previous track record. No B2B buyer will risk his stake on an unknown product, even if cost factors are favorable for the company.
Business buying is a complicated process
Business buying is a complicated process that may involve a various hierarchy of decision-makers and final approval from the finance department or sometimes even by the board of directors if it’s a major purchase. Moreover, decision-makers keep changing, and that creates a huge problem for Business-to-business (B2B) marketers. Some companies may go for the lowest quote as their objective is to keep costs down and earn more margin on product sales.
Business purchases are classified into low risk, low-value purchases that involve decision making at lower levels, low-risk, high-value goods that require the approval of technical and finance levels, low-value high risk involving specialists and purchases, and finally, high-value high-risk purchases involving senior decision-makers in the company.
Complexity of products
Consumer products are bought based on brand building and awareness created by the company. Consumers may not be bothered about the finer technical details of the product, but the company needs to evaluate it in detail and see whether customization is required or changes in product specifications are required.
The Business-to-business (B2B) marketer needs to be armed with all the technical information and standardization protocols to gain access to the company’s top decision-makers. Information provided should be factual and not a value-building created in the mind of the buyer. On the other hand, a lot of investment required for brand building and value creation in the mind of the consumer can be eliminated In a sale based on ‘technical’ parameters.
Fewer Segmentation and needs
In a consumer market, a particular product could be divided into different segments based on need, buying power and features. There could be a set of brands from a company that is in the premium segment- Timex Watches, Unilever consumer products, Levis jeans may have different offerings at different price points that cater to entry-level, average, and premium buyers.
However, the industrial buyer is not looking at products for end consumption and hence not bothered to look at them from the perspective of a consumer. Segmentation of the market is much lesser as whims, insecurities, and indulgences are not the factors that drive the purchasing. Several people are involved in Business-to-business (B2B) decision making and segments are based on price, quality, service, and partnership. The challenge for Business-to-business (B2B) marketer is to focus on the right segment and work with them to evolve a long-term strategic partnership although limited segmentation helps to an extent when compared to consumer markets.
For an average consumer buying fast-moving consumer goods (FMCG), a purchase could be for a lifetime at least for 5 to 10 years, as in the case of TV, Refrigerator, microwave oven, and others. Groceries, grains, and consumable goods may be required on a continuous basis.
In the Business-to-business (B2B) industry, it could be a requirement of a component or kit on a continuous basis until a particular brand or product may be taken off from the market. Or changes in design or product specifications may make the particular device, component, or kit useless or obsolete.
In Business-to-business (B2B) business, since customers are fewer and business is long-term, the sales team needs to build long-term relationships; the company should adequately train the sales force in the latest technologies and ensure that they are successfully communicating it to the clients.
Looks & packaging do not matter
Consumer goods depend on good packaging and branding for their success. Huge amounts may be spent on the attractive design of cartons and logos. However, in Business-to-business (B2B), marketing packaging has lesser importance as buying is not based on looks and design. A product is judged primarily on its intrinsic merits and not on its attractive looks. Moreover, the decision-makers may not see the packing at all. It may be opened and used on the production floor by technical and production personnel.