Business marketing

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Business marketing is a marketing practice of individuals or organizations (including commercial businesses, governments, and institutions). It allows them to sell products or services to other companies or organizations that resell them, use them in their products or services, or use them to support their works. It is a way to promote business and improve profit too.


Business marketing is also known as industrial marketing or business-to-business (B2B) marketing. Business-to-government marketing, while still classified within the B2B discipline due to the sharing of dynamics, does differ slightly.


The practice of a purveyor of goods trading with another may be as old as commerce itself. In relation to marketing today, its history is more recent. Michael Morris, Leyland Pitt, and Earl Dwight Honeycutt say that for several years business marketing took "a back seat" to consumer marketing. [1] This entailed providers of goods or services selling directly to households through mass media and retail channels. David Lichtenthal (professor of marketing at Zicklin School of Business) notes in his research that business marketing has existed since the mid-19th century. He adds that the bulk of research on business marketing has come in the last 25 years. [2]

This began to change in the middle to late 1970s. Academic periodicals, including the Journal of Business-to-Business Marketing [3] and the Journal of Business & Industrial Marketing [4] now publish studies on the subject regularly. Professional conferences on business marketing are held every year[ citation needed ] and courses are commonplace at many universities today. According to Jeremy Kourdi, more than half of marketing majors start their careers in business marketing rather than consumer marketing. [5]

Internal and external efficiency

The internal efficiency of a business entity is the factor by which it prepares a product or service in a cost efficient manner. The external efficiency of a business entity is the factor by which it effectively markets itself so as to utilise the market, in order to retrieve maximum profits from that internal efficiency. So in a b2b market setting, the external efficiencies of the business entities due to conduct trade is vital to the success of the b2b transaction, especially if they belong to the same concern, in which case an internal market between the co-owned business entities is emergent. Being able to make use of external economies of scale within the same ownership group is actually one of the motivations for creating a concern. [6] [7]

Business and consumer markets (B2C)

Business markets have derived demand – a demand in them exists because of demand in the consumer market. An example would be a government wishing to purchase equipment for a nuclear power plant. Another example would be when items are in popular demand. The underlying consumer demand that has triggered this is that people are consuming more electricity (by using more household devices such as washing machines and computers). Business markets do not exist in isolation.

A single consumer market demand can give rise to hundreds of business market demands. The demand for cars creates demands for castings, forgings, plastic components, steel, and tires. In turn, this creates demands for casting sand, forging machines, mining materials, polymers, and rubber. Each of these growing demands has triggered more demands.

As the spending power of citizens increases, countries generally see an upward wave in their economies. Cities or countries with growing consumption are generally growing business markets.

Vs. consumer marketing

Despite the differences between business and consumer marketing from a surface perspective being seemingly obvious, there are more subtle distinctions between the two with substantial ramifications. Dwyer and Tanner note that business marketing generally entails shorter and more direct channels of distribution.

While consumer marketing is aimed at large groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in business marketing. According to Hutt and Speh (2004), most business marketers commit only a small part of their promotional budgets to advertising, and that is usually through direct mail efforts and trade journals. While advertising is limited, it often helps the business marketer set up successful sales calls.

Both business to business (B2B) and business-to-consumer (B2C) marketing is done with the ultimate intention of making a profit to the seller (business-to-business marketing). In B2C, B2B and B2G marketing situations, the marketer must always:

These are the fundamental principles of the 4 Ps of marketing (the marketing mix) first documented by E. Jerome McCarthy in 1960. [8]

While "other businesses" might seem like the simple answer, Dwyer and Tanner say business customers fall into four broad categories: companies that consume products or services, government agencies, institutions and resellers.

The first category includes original equipment manufacturers, such as large auto-makers who buy gauges to put in their cars and also small firms owned by 1–2 individuals who purchase products to run their business. The second category, government agencies, is the biggest. In fact, the U.S. government is the biggest single purchaser of products and services in the country, spending more than $300 billion annually. But this category also includes state and local governments. The third category, institutions, includes schools, hospitals and nursing homes, churches and charities. Finally, resellers consist of wholesalers, brokers and industrial distributors.

So what are the meaningful differences between B2B and B2C marketing?

A B2C sale is to a "Consumer" i.e. to a single person who pays for the transaction. A B2B sale is to a "Business" i.e. organization or firm. Given the complexity of organizational structure, B2B sales typically involve multiple decision makers.

While the structure of a B2B sale involving an organization is understood, the psychology of a B2B sale, particularly from a marketing perspective, is not always devoid of human emotion. According to Bill Blaney (2012), a B2C and a B2B sale can be differentiated by the customer as either a "want" or a "need." While retail consumer sales rarely hinge upon a product or service that customers "need" in order to survive (pharmaceutical and other health industry products notwithstanding), business sales are more directly applied to the growth and survival of that particular company, organization or institution. As a result, marketing to businesses relies on communication that can provide the company buyer with a level of comfort in the long-term performance of their product or service, and support in its continued efficacy.

The marketing mix is affected by the B2B uniqueness which include complexity of business products and services, diversity of demand and the differing nature of the sales itself (including fewer customers buying larger volumes). [9] Because there are some important subtleties to the B2B sale, the issues are broken down beyond just the original 4 Ps of marketing developed by McCarthy.


B2B branding

B2B branding is different from B2C in some crucial ways, including the need to align corporate brands, divisional brands and product/service brands and to apply brand standards to material often considered “informal” such as email and other electronic correspondence. It is mainly of large scale when compared with B2C.

Product (or service)

Due to the fact that business customers are focused on creating shareholder value for themselves, the cost-saving or revenue-producing benefits of products and services are important to factor in throughout the product development and marketing cycles.

Target market

B2B Buyer Decision Map: Problem, solution alternatives, decision support B2B buyer decision map.jpg
B2B Buyer Decision Map: Problem, solution alternatives, decision support

Quite often, the target market for a business product or service is smaller and has more specialized needs reflective of a specific industry or niche. [10] A B2B niche, a segment of the market, can be described in terms of firmographics which requires marketers to have good business intelligence in order to increase response rates. Regardless of the size of the target market, the business customer is making an organizational purchase decision and the dynamics of this, both procedurally and in terms of how they value the product offered, differ dramatically from the consumer market. There may be multiple influencers on the purchase decision, which may also have to be marketed to, though they may not be members of the decision making unit. [11] In addition the research and decision making process a B2B buyer undertakes will be more extensive. [12] Finally the purchase information that buyers are researching changes as they go through the buying process.[ citation needed ]


The business market can be convinced to pay premium prices more often than the consumer market with appropriate pricing structure and payment terms. This pricing premium is particularly achievable if it is supported with a strong brand. [13]


Promotion planning is relatively easy when the decision making habits of the customer base and the vocabulary unique to their segment are known. Specific trade shows, analysts, publications, blogs and retail/wholesale outlets tend to be fairly common to each industry/product area. Once it is figured out for the industry/product, writing the promotion plan is simple. Promotion techniques rely heavily on marketing communications strategies.[ citation needed ] Promotion in digital marketing is as synonymous and vital as it is in physical marketing as it involves persuasion and advertising and the goal of advertising is to elicit a response.

Communications methodologies

The purpose of B2B marketing communications is to support the organizations' sales effort and improve company profitability. B2B marketing communications tactics generally include advertising, public relations, direct mail, trade show support, sales collateral, branding, and interactive services such as website design and search engine optimization. The Business Marketing Association [14] is the trade organization that serves B2B marketing professionals. It was founded in 1922 and offers certification programs, research services, conferences, industry awards and training programs.

Positioning statement

An important first step in business to business marketing is the development of a positioning statement. This is a statement of what is done and how it will be better and more efficient than competitors.

Developing messages

The next step is to develop messages. There is usually a primary message that conveys more strongly to customers, what is done and how the customers benefit from it. This is often supported by a number of secondary messages, each of which may have a number of supporting arguments, facts and figures.

Campaign plans

A comprehensive plan to target resources where they will deliver the best return on investment. The infrastructure to support each stage of the marketing process has to be in place and the entire organization must be geared up to handle the inquiries appropriately.

Briefing an agency

A standard briefing document is usually a good idea for briefing an agency, as well as focusing the agency on what is important in the campaign. It serves as a checklist of all the important things to consider as part of the brief. Typical elements to an agency brief are: objectives, target market, target audience, product, campaign description, product positioning, graphical considerations, corporate guidelines, and any other supporting material and distribution.

Considering results

The value in results measurement is in tying the marketing campaign back to business results. Metrics to measure the impact are e.g. cost per acquisition, cost per lead or tangible changes in customer perception.


Hutt and Speh (2001) note that "business marketers serve the largest market of all; the dollar volume of transactions in the industrial or business market significantly exceeds that of the ultimate consumer market." For example, they note that companies such as GE, DuPont and IBM spend more than $60 million a day on purchases to support their operations.

Dwyer and Tanner (2006) say the purchases made by companies, government agencies and institutions "account for more than half of the economic activity in industrialized countries such as the United States, Canada and France."

A 2003 study sponsored by the Business Marketing Association estimated that business-to-business marketers in the United States spend about $85 billion a year to promote their goods and services. The BMA study breaks that spending out as follows (figures are in billions of dollars):

Despite the stream of leads and undeniable impact of marketing in B2B organizations, a 2021 report by Statista states that majority of businesses only allocate 5% of their budget towards promotions. [15] This is a far cry from B2C companies who typically spend 5% to 12% of their total revenue towards marketing.[ citation needed ]


The tremendous growth and change that business marketing is experiencing is largely due to three "revolutions" occurring around the world today, according to Morris, Pitt and Honeycutt (2001).

  1. Technological revolution. Technology is changing at an unprecedented pace, and these changes are speeding up the pace of new product and service development. A large part of that has to do with the Internet, which is discussed in more detail below. Technology and business strategy go hand in hand. Both are correlated. While technology supports forming organization strategy, the business strategy is also helpful in technology development. Both play a role in business marketing.
  2. Entrepreneurial revolution. To stay competitive, many companies have downsized and reinvented themselves. Adaptability, flexibility, speed, aggressiveness and innovativeness are the keys to remaining competitive today. Marketing is taking the entrepreneurial lead by finding market segments, untapped needs and new uses for existing products, and by creating new processes for sales, distribution and customer service.
  3. (Occurring within marketing itself) Companies are looking beyond traditional assumptions and they are adopting new frameworks, theories, models and concepts. They are also moving away from the mass market and the preoccupation with the transaction. Relationships, partnerships and alliances are what define marketing today. The cookie-cutter approach is out. Companies are customizing marketing programs to individual accounts.

Impact of the Internet

The Internet has become an integral component of the customer relationship management strategy for business marketers. Dwyer and Tanner (2006) note that business marketers not only use the Internet to improve customer service but also to gain opportunities with distributors.

According to Anderson and Narus (2004), two new types of resellers have emerged as by-products of the Internet: infomediaries and metamediaries. Infomediaries, such as Google and Yahoo, are search engine companies that also function as brokers, or middlemen, in the business marketing world. They charge companies fees to find information on the Web as well as for banner and pop-up ads and search engine optimization services. Metamediaries are companies with robust Internet sites that furnish customers with multiproduct, multivendor and multiservice marketspace in return for commissions on sales.

With the advent of b-to-b exchanges, the Internet ushered in an enthusiasm for collaboration that never existed before—and in fact might have even seemed ludicrous 10 years ago. For example, a decade ago who would have imagined Ford, General Motors and DaimlerChrysler entering into a joint venture? That's exactly what happened after all three of the Big Three began moving their purchases online in the late 1990s. All three companies were pursuing their own initiatives when they realized the economies of scale they could achieve by pooling their efforts. Thus was born what then was the world's largest Internet business when Ford's Auto-Xchange and GM's TradeXchange merged, with DaimlerChrysler representing the third partner.

While this exchange did not stand the test of time, others have, including Agentrics, which was formed in 2005 with the merger of WorldWide Retail Exchange and GlobalNetXchange, or GNX. Agentrics serves more 50 retailers around the world and more than 300 customers, and its members have combined sales of about $1 trillion. Hutt and Speh (2001) note that such virtual marketplaces enable companies and their suppliers to conduct business in real time as well as simplify purchase processes and cut costs.

This trend only further extended during the COVID-19 pandemic as more businesses were forced to move more of their business strictly online for customer management and new lead engagement.[ citation needed ]

See also


Related Research Articles

<span class="mw-page-title-main">Marketing</span> Study and process of exploring, creating, and delivering value to customers

Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of advertising campaigns; attendance at trade shows and public events; design of products and packaging attractive to buyers; defining the terms of sale, such as price, discounts, warranty, and return policy; product placement in media or with people believed to influence the buying habits of others; agreements with retailers, wholesale distributors, or resellers; and attempts to create awareness of, loyalty to, and positive feelings about a brand. Marketing is typically done by the seller, typically a retailer or manufacturer. Sometimes tasks are contracted to a dedicated marketing firm or advertising agency. More rarely, a trade association or government agency advertises on behalf of an entire industry or locality, often a specific type of food, food from a specific area, or a city or region as a tourism destination.

Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior.

<span class="mw-page-title-main">Distribution (marketing)</span> Making products available to customers

Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. This can be done directly by the producer or service provider or using indirect channels with distributors or intermediaries. Distribution is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.

<span class="mw-page-title-main">Pricing</span> Process of determining what a company will receive in exchange for its products

Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of product.

In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on shared characteristics.

Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and activities.

Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. The method of communication can be any addressable medium, as in direct marketing.

Marketing Communications refers to the use of different marketing channels and tools in combination. Marketing communication channels focus on how businesses communicate a message to its desired market, or the market in general. It is also in charge of the internal communications of the organization. Marketing communication tools include advertising, personal selling, direct marketing, sponsorship, communication, public relations, social media, customer journey and promotion.

<span class="mw-page-title-main">Pricing strategies</span> Approach to selling a product or service

A business can use a variety of pricing strategies when selling a product or service. To determine the most effective pricing strategy for a company, senior executives need to first identify the company's pricing position, pricing segment, pricing capability and their competitive pricing reaction strategy. Pricing strategies and tactics vary from company to company, and also differ across countries, cultures, industries and over time, with the maturing of industries and markets and changes in wider economic conditions.

A target audience is the intended audience or readership of a publication, advertisement, or other message catered specifically to said intended audience. In marketing and advertising, it is a particular group of consumer within the predetermined target market, identified as the targets or recipients for a particular advertisement or message. Businesses that have a wide target market will focus on a specific target audience for certain messages to send, such as The Body Shops Mother's Day advertisements, which were aimed at the children and spouses of women, rather than the whole market which would have included the women themselves. A target audience is formed from the same factors as a target market, but it is more specific, and is susceptible to influence from other factors. An example of this was the marketing of the USDA's food guide, which was intended to appeal to young people between the ages of 2 and 18.

Industrial marketing is the marketing of goods and services by one business to another. Industrial goods are those an industry uses to produce an end product from one or more raw material. The term, industrial marketing has largely been replaced by the term B2B marketing.

Industrial market segmentation is a scheme for categorizing industrial and business customers to guide strategic and tactical decision-making. Government agencies and industry associations use standardized segmentation schemes for statistical surveys. Most businesses create their own segmentation scheme to meet their particular needs. Industrial market segmentation is important in sales and marketing.

Value-based price is a pricing strategy which sets prices primarily, but not exclusively, according to the perceived or estimated value of a product or service to the customer rather than according to the cost of the product or historical prices. Where it is successfully used, it will improve profitability through generating higher prices without impacting greatly on sales volumes.

The following outline is provided as an overview of and topical guide to marketing:

<span class="mw-page-title-main">Digital marketing</span> Marketing of products or services using digital technologies or digital tools

Digital marketing is the component of marketing that uses the Internet and online based digital technologies such as desktop computers, mobile phones and other digital media and platforms to promote products and services. Its development during the 1990s and 2000s changed the way brands and businesses use technology for marketing. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly use digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e–books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callback, and on-hold mobile ring tones. The extension to non-Internet channels differentiates digital marketing from online marketing.

A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also known as a distribution channel. A marketing channel is a useful tool for management, and is crucial to creating an effective and well-planned marketing strategy.

A target market, also known as serviceable obtainable market (SOM), is a group of customers within a business's serviceable available market at which a business aims its marketing efforts and resources. A target market is a subset of the total market for a product or service.

Trade marketing is a discipline of marketing that relates to increasing the demand at wholesaler, retailer, or distributor level rather than at the consumer level. However, there is a need to continue with Brand Management strategies to sustain the need at the consumer end. A shopper, who may or may not be the consumer themself, is the one who identifies and purchases a product from a retailer even though they might not purchase the goods at the end of the day. To ensure that a retailer promotes a company's product against competitors', that company must market its product to the retailers as well by offering steep discounts versus competitors. Trade marketing might also include offering various tangible/intangible benefits to retailers such as commissions made for sales.

<span class="mw-page-title-main">Customer experience</span> Interaction between an organization and a customer

Customer experience (CX) is a totality of cognitive, affective, sensory, and behavioral consumer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages. Pine and Gilmore described the experience economy as the next level after commodities, goods, and services with memorable events as the final business product. Four realms of experience include esthetic, escapist, entertainment, and educational components.

Demand generation is the focus of targeted marketing programs to drive awareness and interest in a company's products and/or services. Commonly used in business-to-business, business-to-government, or longer business-to-consumer sales cycles, demand generation involves multiple areas of marketing and is really the marriage of marketing programs coupled with a structured sales process.


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