Beginning with a question to expound our thinking: “what is marketing?”
Very often, marketing is narrowed down to only mean communicating a company’s products to the general public or targeted client. This is only half true; marketing refers to everything a company does to acquire customers and maintain a relationship with them. Even the small tasks like writing thank-you letters, playing golf with a prospective client, returning calls promptly and meeting with a past client for coffee can be thought of as marketing. One of the world’s leading authorities in the marketing profession , The Chartered Institute of Marketing define marketing as the management process responsible for identifying, anticipating and satisfying customer requirements profitably. The ultimate goal of marketing is to match a company’s products and services to the people who need and want them, thereby ensuring profitability.
As different organisations sell different products and services, they must devise different strategies to serve their target customers. The first major difference in the market comes from businesses that target individual consumers such as Brian buying his own shirt and others targeting businesses like Airtel buying corporate uniform for its staff. Technically, the former is called Business to Consumer (B2C) while the latter is Business to Business (B2B). With these two areas of marketing, the same strategies may be used, but their application will need to change for them to be effective. Business-to-consumer marketing (B2C) relates to people who buy products and use services for their own personal or domestic consumption. This includes durable items such as cars, white goods and consumer goods for speedy consumption such as food, drinks and toiletries, also known as FMCG (Fast Moving Consumer Goods).
On the other hand, Business-to-business (B2B) marketing involves products or services that are sold to other businesses or organisations. Business-to-business marketing was previously referred to as industrial marketing, but this phrase failed to recognise the involvement of a range of other, non-industrial enterprises. For example, governments and the not-for-profit sector also contribute a significant amount of commercial activity. Therefore, the term Organisational marketing has been adopted to encompass other players such as Government, NGO’s, distributors and retailers among others. These products are often referred to as industrial goods which could include yarn for use in textile manufacture, installations – such as large-scale equipment, aircraft, production machinery, operating supplies like paper, pens and internet among others and services to businesses like IT, tax consultancy, audit and accounting, recruitment and training provision among others.
It is worth noting that many businesses engage in a number of these different types of marketing. Take an example of Roofings which will market to construction firms and also to individuals as they build personal houses or a soft drinks company like Riham marketing to its distributors, but going an extra mile to support them to be able to market to the final consumers.
The market for goods and services bought and sold between businesses is very huge and is believed to be far larger than the consumer market and it is why we are giving it attention today.
The business market comprises many types and sizes of organisations that interact selectively and form relationships of varying significance and duration with one another. Although these organisations are often structurally and legally independent entities, a key characteristic is that they are also interdependent. That is, they have to work with other organisations to varying degrees in order to achieve their goals. Imagine the complicated, multi-player chain of buying and selling for a manufacturing conglomerate like Mukwano. It relies on different suppliers for its machinery, and their respective spare parts, different raw materials, suppliers of energy, professional service providers like legal firms, management consultants, auditors, IT and Tax consultants etc. Regardless of whether they sell their products and services to consumers or to other organisations, all businesses buy and sell items in order to create their own offerings. In recognition of their added value, other businesses may then buy these products to use, to create other products or to sell them as finished items to consumers.
Here below is an illustration of the major differences between B2B and B2C
In conclusion, as the business environment evolves, businesses seek new ways of reaching out to their customers. B2B has not been an exception and we have not only seen the vast changes but also anticipate many more that we cannot even predict today.
Technology has had a strong role in how B2B is conducted; ranging from application of social media to content marketing and even more sophisticated channels such artificial intelligence and this shall be our focus in the next article.