Business to Business Marketing - Term Paper Example

? Business To Business Marketing Introduction Business to Business, also popularly known as B2B, basically refers to the commercial transactions between two organizations. Business to Business marketing is concerned about selling or purchasing of goods or services with a motive to support the operations of other firm or to support production of other firms’ products or even for resale purposes. It is worth mentioning here that an organization which is involved in Business to Business operation produces goods that is further used as the raw materials or helps the other organizations (customers) in their manufacturing process. For instance, bottle manufacturing company supplying bottles to soft drink producing company which is further used by the soft drink company as part of their finished goods (Rly, 2011). Considering these facts, this paper intends to include the nature of the Business to Business marketing along with its related fields so as to provide with a comprehensive description of the concept. Nature of Business to Business Marketing The Business to Business marketing is rigidly structured in nature, i.e. it is less flexible in comparison to the Business to Consumer market. As the consumers, in this context, are business people (other business firms) having higher bargaining power, the company who is involved in this section needs to put more effort to attract the customers (i.e. other organization). To attract the customers (other organizations), personal selling is more preferable rather than advertisement in this type of marketing, as the organizations rarely pay attention to the advertisement. The customers in this context are mostly organizations themselves and tend to know the very marketing trick which stands as one of the reasons to avoid advertisement. Here, the intermediates have no role to play as it mostly involve with direct selling or direct channels to its customers. It is worth mentioning here that relationship made with the customers is usually long lasting and very complex in nature which plays a significant role in the Business to Business marketing. Competition level experienced is high in this process due to which the organizations dealing with Business to Business operations attempt in establishing effective and interdependent relationship with its customers (i.e. other organization, retailers) so as to secure its position in the market (Rly, 2011). Classifications of Business to Business Goods Goods which are produced for Business to Business marketing are very different from those goods which are produced for general consumers in the market. This is because the need of the goods and the customers themselves are very different in both the cases, but the intention remains same i.e. selling the products and attaining significant customer satisfaction. Various ways are being followed for the purpose of classifying these types of goods (Brennan & et. al., 2010). They are as follows: Entering Goods In this context, finished goods of one organization tend to become raw material of other organization. For instance, aluminum can be used by the company, which is producing electronic products, as raw materials (Brennan & et. al., 2010). Here, finish goods of one company is the raw material of the other which are necessary as the resources used by the later organization to manufacture its product. Foundation Goods Foundation goods are those goods which are used by other organizations (customers) as a support for making their own goods. This includes goods which are installed or used as accessories by the other organization, such as car producing company uses tyre manufactured by other companies (Brennan & et. al., 2010). Here, tyre has not been used as the raw materials but the part of the finished goods as a much necessary substance. Facilitating Goods Goods which are purchased by the company with an intention to achieve its goals and objectives are known as facilitating goods. These goods are not used in manufacturing purpose by the purchasing company. For instance, BPO (Business Processing Outsourcing) company installing coffee machines for its employees is not the part of their process but is the facilitating goods (Brennan & et. al., 2010). Business to Business marketing sector deals with producers, middlemen, government units and non-profit organizations. To be precise, in B2B marketing, producers are those who are involved with producing goods and services which is further used by the buyers (organization) which uses these goods to produce the ultimate products. Middlemen are those who buy goods for the purpose of reselling which includes all retailers and wholesalers as well. Government units are all legal entities, while nonprofit concerns represent the schools and NGOs. It has been observed in this context that the marketing strategies adopted by supplying companies in this sector is largely focused on personal selling in comparison to other available options (Scribd, 2011). The Business to Business marketing is done with tremendous care as the customers in this field are not the random customers and they make their choices rationally. Here, bulk purchasing is the utmost concern which proves to be very essential for the organizations involved. Personal selling is in focus in this type of marketing because the customers here appreciate or get strongly persuaded through personal approach rather than information served through commercial advertisement. These require tremendous dedication from the marketers as the customers here are very explicit about their demand. The personal seller for Business to Business marketing ought to have the skills such as convincing communication skills, logical thinking and rationalization of decisions among others, as they are liable to deal with the concerned people in the customer organizations who are mostly the general managers or other middle level managers (Jensen, 2006). In B2B marketing, a customer company buys the product with respect to the strategic importance of the product and compares its cost savings keeping in view the substitutes available in the market. So it becomes necessary for the salesperson involved to ascertain the customers for their goods and avoid approaching to random customers. The Business to Business marketing involves lesser number of customers than that in the case of Business to Customer marketing. However, the buyers in this sector focus on bulk buying leading to a greater demand for products and services and thus providing the supplier company with higher profit margin (Jensen, 2006). Growing Dimension of Business to Business Marketing It has been observed that trade market is experiencing different trends with respect to globalization. The world has undergone immense globalization, tending the market to become single. The demand of Business to Business marketing has increased. Now-a-days many business firms are operating internationally. The marketer involved in the operation of Business to Business marketing must take into account environmental, organizational, interpersonal as well as individual factors with an intention to impress their clients (Blythe & Zimmerman, 2005). Conclusion The preparation of Business to Business plan is a complex process that requires tremendous research being highly focused on the market trend and macro as well as micro-economic fluctuations. Business to Business marketing is very different from consumer market. In this context it can be said that the Business to Business marketing needs to impress those customers who are determined and focused on their needs. The involvement of customers in B2B marketing is not for own needs, but is because of the organizational needs. Maintaining cordial relationship plays a vital role as it results in long term business relationship between the buyer and the seller. References Blythe, J. & Zimmerman, A. S. (2005). Business-to-business marketing management: a global perspective. UK: Cengage Learning EMEA. Brennan, R. & et. al., (2010). Business-to-Business Marketing. US: SAGE Publications Ltd. Jensen, M. B. (2006). Characteristics of B2B adoption and planning of online marketing communications. Retrieved from http://www.palgrave-journals.com/jt/journal/v14/n4/pdf/5740194a.pdf?q=five-b2b-marcom-strategies Rly, B. (2011). The Business-to-Business Marketing Handbook. Retrieved from http://www.bly.com/content/B2BMktgHdbk.pdf Scribd. (2011). Introduction to B2B. Retrieved from http://www.scribd.com/doc/18101741/Introduction-to-B2B-marketing Bibliography Cunningham, M. J. (2002). B2B: how to build a profitable e-commerce strategy. Greece: Perseus. Economist Intelligence Unit. (2007). Reaching Global Executives: Megatrends in B2B Marketing. Retrieved from http://graphics.eiu.com/upload/B2B%20Megatrends.pdf Kotler, P. & et. al. (2006). B2B brand management. US: Springer. Read More