Business marketing

Business Marketing is the practice of individuals, or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. Also known as industrial marketing, business marketing is also called business-to-business marketing, or B2B marketing, for short. (Note that while marketing to government entities shares some of the same dynamics of organizational marketing, B2G Marketing is meaningfully different.)In the broadest sense, the practice of one purveyor of goods doing trade with another is as old as commerce itself. As a niche in the field of marketing as we know it today, however, its history is more recent. In his introduction to Fundamentals of Business Marketing Research, J. David Lichtenthal, professor of marketing at the City University of New York's Zicklin School of Business, notes that industrial marketing has been around since the mid-19th century, although the bulk of research on the discipline of business marketing has come about in the last 25 years.
Morris, Pitt and Honeycutt, 2001, point out that for many years business marketing took a back seat to consumer marketing, which entailed providers of goods or services selling directly to households through mass media and retail channels. This began to change in middle to late 1970s. A variety of academic periodicals, such as the Journal of Business-to-Business Marketing and the Journal of Business & Industrial Marketing, now publish studies on the subject regularly, and professional conferences on business-to-business marketing are held every year. What's more, business marketing courses are commonplace at many universities today. In fact, Dwyer and Tanner (2006) point out that more marketing majors begin their careers in business marketing today than in consumer marketing.
Business Markets -- (Business Marketing Management:B2B By Michael D Hutt & Thomas w Speh) Business markets are markets for products & services, local to international, bought by; 1. Businesses, 2.Government Bodies, 3.Institutions such as Hospitals or corporates for incorporation (E.G; ingredient materials or components) for consumption(E.g process materials, office supplies & consulting services) for use or for resale..... The only markets not of direct interest are those dealing with products or services which are principally directed at personal use or consumption such as packaged grocery products , home appliances, or consumer banking The factors that distinguish business marketing from consumer marketing are the nature of the customer & how the customer uses the product.
[edit]Business & consumer markets - the link

Business markets have a derived demand - this means that a demand in business markets exists only because of another demand somewhere in the consumer market. Lets take a few examples :
The government of India wishes to purchase equipment for a nuclear power plant in Jaitapur - a business market demand. The underlying consumer demands that have triggered this demand are that the people of India are now consuming more electricity - they have bought more washing machines, microwaves, computers, charged devices etc.
The demand for restaurant furniture is based on the consumer demand of more restaurants.
Thus business markets do not exist in isolation. Cities or countries with growing consumption are generally growing business markets too.
A single consumer market demand can give rise to hundreds of business market demands. The demand for cars in India creates demands for steel, tyres, forgings, castings, plastic components which in turn has created demands for mining, rubber, forging machines, casting sand and polymers. Each of these growing demands has further triggered more demands. Thus as the spending power of citizens increase, the country generally sees a upward wave in its economy.
[edit]Business marketing vs. consumer marketing

Although on the surface the differences between business and consumer marketing may seem obvious, there are more subtle distinctions between the two with substantial ramifications. Dwyer and Tanner (2006) 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 that advertising is limited, it often helps the business marketer set up successful sales calls.
Marketing to a business trying to make a profit (business-to-business marketing) as opposed to an individual for personal use (Business-to-Consumer, or B2C marketing) is similar in terms of the fundamental principles of marketing. In B2C, B2B and B2G marketing situations, the marketer must always:
successfully match the product or service strengths with the needs of a definable target market;
position and price to align the product or service with its market, often an intricate balance; and
communicate and sell it in the fashion that demonstrates its value effectively to the target market.
These are the fundamental principles of the 4 Ps of marketing (the marketing mix) first documented by E. Jerome McCarthy in 1960.[1]

While "other businesses" might seem like the simple answer, Dwyer and Tanner (2006) 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 automakers 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. an individual who may be influenced by other factors such as family members or friends, but ultimately the sale is 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. 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).[2] Because there are some important subtleties to the B2B sale, the issues are broken down beyond just the original 4 Ps developed by McCarthy.
[edit]Business to business(B2B) Marketing Strategies

[edit]B2B Branding
B2B Branding is different from B2C in some crucial ways, including the need to closely align corporate brands, divisional brands and product/service brands and to apply your brand standards to material often considered “informal” such as email and other electronic correspondence. it is mainly of large scale when compared with B2C
[edit]Product (or Service)
Because 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.
[edit]People (Target Market)
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.[3] 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 what they are buying from you, 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.[4]
[edit]Pricing
The business market can be convinced to pay premium prices more often than the consumer market if you know how to structure your pricing and payment terms well. This price premium is particularly achievable if you support it with a strong brand.[5]
[edit]Promotion
Promotion planning is relatively easy when you know the media, information seeking and decision making habits of your customer base, not to mention the vocabulary unique to their segment. Specific trade shows, analysts, publications, blogs and retail/wholesale outlets tend to be fairly common to each industry/product area. What this means is that once you figure it out for your industry/product, the promotion plan almost writes itself (depending on your budget) but figuring it out can be a special skill and it takes time to build up experience in your specific field. Promotion techniques rely heavily on marketing communications strategies (see below).
[edit]Place (Sales and Distribution)
The importance of a knowledgeable, experienced and effective direct (inside or outside) sales force is often critical in the business market. If you sell through distribution channels also, the number and type of sales forces can vary tremendously and your success as a marketer is highly dependent on their success.
[edit]B2B Marketing 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 [1] 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.
[edit]Positioning Statement
An important first step in business to business marketing is the development of your positioning statement. This is a statement of what you do and how you do it differently and better and more efficiently than your competitors.
[edit]Developing your messages
The next step is to develop your messages. There is usually a primary message that conveys more strongly to your customers what you do and the benefit it offers to them, supported by a number of secondary messages, each of which may have a number of supporting arguments, facts and figures.
[edit]Building a campaign plan
Whatever form your B2B marketing campaign will take, build a comprehensive plan up front to target resources where you believe they will deliver the best return on investment, and make sure you have all the infrastructure in place to support each stage of the marketing process - and that doesn't just include developing the lead - make sure the entire organization is geared up to handle the inquiries appropriately.
[edit]Briefing an agency
A standard briefing document is usually a good idea for briefing an agency. As well as focusing the agency on what's important to you and your campaign, it serves as a checklist of all the important things to consider as part of your brief. Typical elements to an agency brief are: Your objectives, target market, target audience, product, campaign description, your product positioning, graphical considerations, corporate guidelines, and any other supporting material and distribution.
[edit]Measuring results
The real value in results measurement is in tying the marketing campaign back to business results. After all, you’re not in the business of developing marketing campaigns for marketing sake. So always put metrics in place to measure your campaigns, and if at all possible, measure your impact upon your desired objectives, be it Cost Per Acquisition, Cost per Lead or tangible changes in customer perception.
Source: http://en.wikipedia.org/wiki/Business_marketing