How different is B-to-B marketing?
Global Marketing : Consider we have to take position, Business-to-business marketing requires a special, unique set of marketing concepts and principles. The other position is Business-to-business marketing is really not that different and the basic marketing principles apply.
Business-to-business activity differs from Business-to-Consumer activities e.g target customers, markets, and the character of the products and services provided. Targeted customers from Business-to- business are organizational buyers but targeted customers from B2C are individual buyers. Basic principles and marketing are not too different between B2C and B2B. But the application and implementation of marketing strategies may need to be modified taking into account the nature of B2B activities. To build the most suitable marketing mix, companies must understand the targeted customers. And after that, both B2B and B2C can apply the same seven P’s to derive the most suitable marketing strategy and both are related to managing the marketing mix to attract customers, which is referred to as transaction marketing.[1]
Read : Digital Marketing – The Impact
B2B Marketing
An important step in business-to-business marketing is to create and communicate relevant differentiation from competitors because commoditization is a very high nature of business competition in the business market [2]. Business marketers require more technical data about their products and their competitive advantages due to the characteristics of the Business to Business market. Here are the reasons why Business to Business marketing concepts have special and unique principles in the application of marketing strategies [3] :
1.The business to business has a complex decision-making unit [3]
There are decision-making units with a different focus on the business to business market. For example, production managers focus on high-value machinery to increase productivity while the risk is very high, others such as the Health and Safety department focus on low-risk products. The Business to business markets normally sells high-value and high-risk products that involve many senior decision-makers to evaluate a large number of purchasing criteria. For example, in the case of manufacturing equipment, the decision-maker will involve the CFO, the Director of R&D, the Director of Production and the Director of Purchasing. So, business to business marketers need to fully understand the various demands of decision-makers even in the one company buyer and need a high level of expertise in all interactions with buyers who have many perspectives and knowledge.
2. The Business to Business buyers is more rational than the Business to Consumer buyers [3]
Different from the business to consumer buyers that less well-informed, less-accountable and more use their emotion to buy products, the business to business buyers has more tendency to make purchasing decisions through rational observation and focused on making a profit. The Business to business buyer will calculate the Return on Investment of the product. They buy what they want not what they need. The business to business should design and produce the best products and prices. The marketers have to build trust related to the brand and reputation of the product to gain the business to business buyers’ emotions.
3. Business to Business product is often more complex with a limited number of buying [3]
The purchase of a consumer product just requires simple criteria of the product and not interested in technical details of what their buying, the purchase of a business product requires a qualified expert. The business to business market are already well-informed and demanding companies to provide specific factual information. So the business to business marketing need to be fully informed in relation to what their sold. It’s must covered technical detail information, aftersales service, problem resolution, and client management team. The business to business marketers are often more experienced and have a technical discipline background.
The action to take
The B2B marketer should be adept at key account management and customer relationship management system to keep up to date with personal details of the decision- maker unit to deliver value to the business to business buyers such a service, problem and technical advice. The business to business buyers looking for a partnership that will hold stock on their behalf, provide technical consultancy, calculate product efficiency and added value and offer long-term on- site support. If the marketers don’t satisfy this expectation, someone else will.
4. Personal Relationship is more important in B2B Markets [3].
In the business to business market, the marketers more often visit the customer to build a personal relationship and trust develop for a long term basis. Generally, the business to business supplier have a loyal customer and committed to many years. The consequence of this emphasis relationship is high expenditure for the marketing budget. The marketers always have face to face contact and must have an in-depth technical understanding of what they sold.
My opinion on the impact of COVID-19 to the Global Marketing and business? and my suggestion to the global companies?
The Covid-19 has a big impact on Global marketing and business activities, especially companies that often interact with China as the beginning of the plague. Global companies have received an economic shock because of this catastrophic epidemic. The biggest impact is the distribution of the supply chain and the company’s financial capability. The strategic plans made by the company changed tremendously. I think companies that don’t have strong financial flexibility will have more to adapt to this economy because they are faced the shocking condition. Here are my opinions about the impact of the COVID-19 on global business:
a) Supply chain company distortion.
Global companies that have factories or production processes in China have disruption on the supply chain process earlier. Supply-side shocks, when the virus stops production and deactivates important components of the supply chain, the gap turns into a problem, the production stop, leave and layoffs can occur [4]. The process of production management (material supply, production, and final stock) and inventory management will be delayed and changes in plans. Due to the widespread throughout the world, the impact of the Covid-19 continues to other aspects such as shipping logistics and customer input (fulfilling existing customer orders and the number of customer requests themselves).
b) External and internal company focus
Global companies face two sides, the first is internal company concerns such as protecting employee health by changing internal business processes (working from home or working hours restrictions). The second is external company concerns such as full market demand (customers) and maintaining customer relationships, changes in scheduled delivery of products or services company and revenue targets that must be achieved.
c) Annual and strategic planning
Annual and strategic planning both financial forecasting, corporate budgeting and targeting revenue and contracts affected by the virus outbreak. Companies must change plans and make decisions quickly.
d) Financial ability falls short
Exchange rates, stock indices, and global financial conditions have reduced the company’s financial capability, especially on cash flow shortages. So, the company should consider any action and change the strategy business to adjust the condition. One of the decision should be considering is global marketing. How is the company can overcome the challenge through marketing activities in efficient budget?
Thus, what is the company should do and maximize the global marketing?
1. Stabilize the supply chain [5]
Companies must determine the duration of their supply chain exposure to areas affected by Covid-19, including tier-1, tier-2 and tier-3, and inventory levels. They need to consider what is the critical part of the company’s supply chain. For example is shipping air freight, recalculating inventory as a reserve until the production process is adjusted, making sure suppliers place their priority on the company. So, the company must re-plan supply management from stabilizing the supply and demand process, optimizing the network, and finding backup suppliers.
2. Take care of the customers and keep the global marketing[5]
The company must ensure that product shipments still meet customer demand. Maybe the request went down but it didn’t disappear at all. Companies must navigate the disruption by adjusting orders and shipping processes to current conditions. The utilization of the online system and pay attention to the cleanliness and stability of product shipments.
3. Perform a simulation of the implementation of the plan [5]
The plan that has been designed to overcome this overbreak must be measured whether the plan can be implemented and suitable to resolve the distortion or not. Thus, round meetings between top management are a must to predict alternative effects of the plan.
4. Help the global environment to pass the plague quickly
Collect goals in the global business environment to restore normal conditions by supporting the global community to resolve and overcome virus outbreaks as global marketing activities. Companies can provide support for medical facilitation needs, help prevent the spread of viruses starting from internal members of the company, and withstand financial crises by consistently improving business impacts. So in my opinion, the short losses even though large losses are better than a long-term and financial crisis.
The References :
[1] Coviello, N.E. and Brodie, R.J., ‘Contemporary Marketing Practices of Consumer and Business-to business Firms: How Different Are They?’, Journal of Business & Industrial Marketing, vol. 16, no. 5, 2001, pp. 382-400.
[2] Marketing Management, Kotler, Keller 2015.
[3] A Guide to B2B Marketing And How it Differs From Consumer Marketing. Paul Hague, Nick Hague & Matthew Harrison. Accesed on Monday March 24, 2020. https://www.b2binternational.com/publications/b2b-marketing/
[4] What Coronavirus Could Mean for the Global Economy. Philipp Carlsson-Szlezak , Martin Reeves and Paul Swartz. Accesed on Tuesday March 23, 2020. https://hbr.org/2020/03/what-coronavirus- could-mean-for-the-global-economy.
[5] COVID-19: Implications for business. By Matt Craven, Linda Liu, Mihir Mysore, and Matt Wilson. Accessed on Tuesday March 24, 2020. https://www.mckinsey.com/business-functions/risk/our- insights/covid-19-implications-for-business
