Differences between Consumer and B2B Marketing - Essay Example

Key Differences Between Consumer And B2B Marketing And The Implications Of These Differences For Marketing Strategy In A B2B Marketing Organisation Introduction: B2B marketing is founded in the basic marketing concepts just as consumer marketing is and yet there are essential differences. These differences may not be easily visible, but they are significant and an understanding of these differences and their implications on B2B marketing may draw the line between success and failure in B2B marketing. (Leopard, S., 2006). Differences: There are six key factors that differentiate B2B marketing from consumer marketing and these differences lie in the essential difference of the target market in nature and purchase behaviour. The first key difference is that buying is a part of the business processes in a business enterprise and this is marked by the presence of a purchase department or purchase activity in a business enterprise. In consumer marketing buying may not be an essential activity as part of the day-to-day activity or not an essential part of the daily activities. Product awareness is created through various forms of advertisements and product information programs targeted at the consumer to stimulate a purchase reaction that is not necessary with B2B marketing. (The challenges of B2B marketing). The second key difference is in the sophistication of the markets. Business is a serious enterprise and as such the nature of the market is sophisticated. There is awareness of the kind of product required and the capacity to understand the intricate features of the product. Such sophistication is not an essential feature in the nature of the consumer market and awareness of product features, as well as the capacity to understand the finer points in the features of the product may not be as high as in the business market. (Business-To-Business Marketing). The third difference key difference lies in the interest that business market displays for product information. The purchase process in a business enterprise is a serious proposition, as the success and competitiveness of the business enterprise may be at stake in the purchases it makes. This makes the business market a willing listener to product information for the purpose of proper analysis of the product and whether it matches the requirements for which the purchase is intended. Even when a purchase may not be imminent, the business market will still be interested in product information for the purpose of increasing its awareness of the products available. In the case of the consumer market this may not be so. There is limited interest in product information, only utility value. . (Bly, R.W. The Key 6 Differences Between Business-to-Business and Consumer Marketing). The fourth difference between B2B marketing and consumer marketing lies in the buying influences that are inherent part of the two markets. In the consumer market, usually the individual makes the purchase decision and hence there is only a single buying influence. In the business market the purchase process is usually a team effort and there are multiple buying influences that come into the picture. Another feature of this difference in the business market is that the actual user of the product in a business environment may be only one of the influences and not necessarily the main buying influence. The multiple buying influences view a product from different perspectives and this adds to the complexity of the business market in comparison to the consumer market with its single buying influence. (Murphy, D. Marketing for B2B vs. B2C – Similar but Different). The fifth difference between the business market and consumer market lies in the buying process. In the consumer market the buying process is simple one step process. This is because there is a single buying influence and once the intent for purchase is there all the buying processes remain within the individual and can be completed in just one step. This is not the case in the business market. There are multiple steps in the buying process, just as there are multiple buying influences that impact on the buying decision. This makes the buying process more elongated and the possibility of the buying decision getting altered during the time of buying process is a constant threat in the business market. The final difference between the business market and the consumer market is in the type of the products that interest the two markets. In the case of business markets the products that are of interest tend to be more complex. This has relation to the applications for which the product is being purchased. In the case of the consumer market the products tend to be much simpler as they are meant for simpler applications. (Krossing, K., 2005). Implications: The differences between B2B and B2C are essentially steeped in the objectives of the purchase and the customer behaviour. This has deep implications in the marketing strategies that need to be adopted for successive marketing of products for a B2B organisation. (Hague, P., Hague, N., & Harrison, M. B2B Marketing). There is no denying that B2C business enterprises have develop powerful means and tools for the successful marketing of their products, but these tools and means do not offer a way to successfully market the products of B2B business enterprises and in some cases these powerful tools and means of the B2C market may act as a detriment to success in case a B2B business enterprise employs them. (Gummeson, E., 1995). The purchase objectives of a business organisation provide the means of the development of a successful marketing approach in B2B marketing. The objectives of a typical business organisation include ensuring suitable quality, reduction of excessive expenditure, prompt and on time supply, reduction in inventory, identification and development of good suppliers that meet these requirements, research new purchase ideas and opportunities, contribute to the strategic marketing plans and increasing the competitive nature of their own products. These purchase objectives may be summed as the right price, the right quality, the right quantity, the right time, and the right source, that enables efficient production of their products. (Wilson, D., 1999). The purchase objectives of a business organise provide the understanding of the differentiation between B2B and B2C marketing. These objectives show that a business organisation is not looking at a one-off purchase, but rather a relationship with a supplier that is meaningful to them. This suggests that a B2B marketing organisation needs to make relationship marketing as the marketing strategy to be adopted. Relationship marketing is the continuous process of identifying and developing new value for each individual customer and then sharing the benefits that ensue from this in a lifetime of association. Relationship marketing, while steeped in the traditional concepts of marketing has subtle difference that make it different and suitable for a B”B marketing organisation. Marketing in its basic form means identifying a customer’s requirement and satisfying it. Relationship marketing takes this further. The basic concept in relationship marketing is the creation of new value for the customer and sharing the value between the producer and the consumer. This means that a B2B company would have to go beyond the 4Ps of marketing and focus on new areas namely technology and individual customers, scope of the business, choosing the right kind of customers, developing a chain of relationships and utilising relationship managers to create this new value oriented business relationship. (Gordon, I., 1998). B2B marketing is essentially steeped in the basic marketing principles and for a successful B2B marketing strategy in comparison to the B2C marketing strategy, the products offered need to be market worthy, in the sense that the product has unique features and is superior in quality. The significant features that marks out a successful B2B product are unique features that meet the business customer requirements better than what the competition offers, good quality, resolves a current problem of the customer, innovative in nature and reduces the overall cost factor for the customer. The discerning nature of the B2B customer makes this essential. (Cooper, G.R., & Kleinschmidt, J. E., 1995). Products in a B2C market result from the research mostly conducted within the premises of the business enterprise, but in the case of the B2B market better results are possible when the product is a result of collaboration between the business enterprise that offers the product and the business that requires the product. The creative experience that the business customer experience also generates the need for the product and enables the product to be easily integrated into the production or business processes of the business customer. (Lauglaug, S.A., 1995). Quality as part of the marketing strategy for a B2B business organisation is a high priority, when compared to a B2C business enterprise. Quality perceptions tend to be viewed through internal processes, but it is the perception of the customer with regards to quality of the products that is important in B2B marketing. Mere lip service to quality may work in a B2C environment, but in a B2B environment it is the difference between success and failure. Quality offers the B2B enterprise the most effective and competitive weapon in its armoury. (Luchs, R., 1995). While a B2C business enterprise organisation would find it much easier to start off its operations using the Internet, a B2B organisation would need to establish its products and its image before it can successfully market its products through the Internet. Thus using relationship-marketing techniques to establish its products and its image a B2B organisation can then set out to marketing its products and services via the Internet. The objectives for the Internet B2B activity have to be Specific, Measurable, Achievable, Realistic and Time-bound (SMART). By this it is meant that the objectives set should not be vague, but as specific as it can be made. It should be measurable to ensure proper monitoring. The objectives should be achievable and not set beyond reach, which would make it an exercise in futility. He objectives should be realistic, taking into account the existing capabilities of the B2B business enterprise. The requirement for timeliness in the objectives is that the e-business world moves at a much faster pace than the normal business world and the B2B business enterprise should not be caught napping. (Haig, M., 2001). A case study of FedEx provides us with a clear picture of the manner in which a successful business enterprise makes use of the Internet to augment its product and services offered to other business enterprises. Staring from use of the Internet in 1995 to provide customers the means to obtain the status of their shipments sent through FedEx, the use of the Internet has expanded to allowing on-screen preparation of air-shipment documentation and printing at the customer end, storage of the address books at the FedEx server, and management of the shipping history information. By providing these additional facilities through the Internet, FedEx has enhanced customer service and reduced costs for its customers in the preparation of shipments, saved coats for itself in attending to customer calls and generated new business for itself through its hook into online sales. FedEx has successfully employed the Internet to extend its business into order-handling services and generate additional shipping business. (Timmers, P., 1999). Conclusion: The differences between B2B marketing and consumer marketing may not be easily discernible. Still there are several important factors that differentiate these markets and marketing strategies that are developed by any business enterprise that targets these markets needs to be alive to these differences. Failure to address these issues depending on the target market could lead it severe inadequacies in the marketing strategies and by that failure of the marketing endeavour itself. Literary References Bly, R.W. ‘The Key 6 Differences Between Business-to-Business and Consumer Marketing’. B2B MARKETING TRENDS. [Online]. Available at: http://www.b2bmarketingtrends.com/abstract.asp?id=176&groupid=3. ‘Business-To-Business Marketing’. HYATT Lassaline. [Online]. Available at: http://www.hl.on.ca/growyourbusiness.htm. Cooper, G.R., & Kleinschmidt, J. E. (1995). ‘Screening New Product Winners’. MARKETING STRATEGIES NEW APPROACHES NEW TECHNIQUES. Ed. McDonald Malcolm. Elsevier Science Ltd. Oxford. Pp. 1-13. Gordon, I. (1998). ‘REALTIONSHIP MARKETING’. John Wiley & Sons Canada, Ltd. Ontario. Pp 1-37. Gummeson, E. (1995). The New Marketing – ‘Developing Long-Term Interactive Relationships’. MARKETING STRATEGIES NEW APPROACHES NEW TECHNIQUES. Ed. McDonald Malcolm. Elsevier Science Ltd. Oxford. Pp. 83-101. Hague, P., Hague, N., & Harrison, M. ‘B2B Marketing’. B2B INTERNATIONAL. [Online]. Available at: http://www.b2binternational.com/whitepapers4.html. Haig, M., (2001). ‘the e-marketing handbook’. Kogan Page Limited. London. Pp. 7-15. Krossing, K. (2005). ‘Is Lead Generation The Only B2B Goal?’ ONE DEGREE. [online]. Available at : http://www.onedegree.ca/2005/09/27/is-lead-generation-the-only-b2b-goal. Lauglaug, S.A. (1995). ‘Technical-Market Research – Get Customers to Collaborate in Developing New Products’. MARKETING STRATEGIES NEW APPROACHES NEW TECHNIQUES. Ed. McDonald Malcolm. Elsevier Science Ltd. Oxford. Pp. 15-23. Leopard, S. (2006). ‘B2B vs. B2C marketing -- do the differences matter?’ The Denver Business Journal. [Online]. 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