Business-to-business marketing, in other words, B2B marketing is one of the main buzzwords in the modern growing business world. B2B marketing is the process of selling a certain product manufactured by one party to another party for selling purposes. It can happen in the service industry as well when a service-providing business provides its services to another business.
In simple terms, B2B marketing is marketing the products or services to businesses or any other organizations to use for production purposes, general day-to-day business operations, or for reselling purposes.
B2B marketing method is often used by businesses that manufacture specific products such as plastic products, fabric products, and steel products. Apart from that service industries such as search engine optimization and management services often use b2b marketing methods in their production process.
B2B market takes a large space in the market and growing rapidly as many businesses identify the benefits of business-to-business marketing for both buying and selling parties. Even though it often gets confused with business-to-consumer(B2C) marketing, there are significant differences between B2B and B2C marketing methods.
B2C marketing concentrates on providing goods and services for the customers for end consumption whereas B2B marketing concentrates on providing goods and services for other businesses.
Many advantages and disadvantages of the B2B marketing concept can be identified.
Advantages of B2B Marketing
01. Convenience
When involved in b2b marketing, the company has to interact with other companies, not end customers. It is convenient for a business to deal with other companies as it is easier to convince businesses than convincing a large number of end customers to purchase a particular product. Apart from that, the sales between companies often happen in large quantities. That makes the advertising cost lower for the products and services.
02. Possibility to create long term business relationships
Once a company becomes a customer for a certain b2b product, there is a high possibility that the company will remain a customer for a long period of time. Creating this brand loyalty can benefit both the selling and buying parties of the product. The seller can continue to sell the product with a minimum advertising cost and the buyer can buy a product with consistent quality with minimum effort.
03. Bulk selling
When selling for a company, usually the products are sold as bulks. It is easier and profitable for the business to sell large quantities to one buyer than to sell individual pieces to many customers. It helps to reduce customer acquiring and maintenance costs, marketing, and advertising costs as well.
Disadvantages of B2B Marketing
01. Limited target market
This can be considered as the main disadvantage of b2b marketing. When selling the product for companies, the target market is comparatively small as the number of companies which a company can market or sell its products is very limited compared to a target market with individual customers. A product that has the potential of having a large target market can only have a few customers when it comes to B2B marketing.
02. Bargaining power
Since most of the purchases in b2b marketing happen as bulk transactions, the buyer has a certain level of bargaining power. In usual situations, the business has to give discounts on orders to keep the customers with them and to continue the business relationship. Unlike the end customers who purchase small quantities, businesses expect price flexibility as they have the power to create a big influence over the sales of the business.
03. Complex transaction processes
Unlike selling for individual customers, the purchasing and selling decisions of b2b marketing involve a decision-making process. Sales cannot be done overnight and the decision to perform a sales transaction should be initiated, evaluated, and approved by the business organization. This process takes a certain time, effort, and company procedures should be followed.