CHAPTER 1: INTRODUCTION B2B MARKETING
What’s in a name? – Business Marketing
Business marketing or B2B (business-to-business) marketing are marketing activities
(marketing of products or services) of an organisation towards other organisations
=> building, maintaining, and expanding relationships with other businesses B2B
Marketing aims to create added value for businesses that implements its
products of services. B2B Marketing seeks to convert this added value into - leads
- sales opportunities
- and turnover for profit-focused companies
B2B marketing
Definition - 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
Top B2B Brands – global
Characteristics of B2B markets
The market
,The buying process
The demand (1/3)
• Based on derived demand: demand for product/service is determined by the demand
for consumer goods/services on the B2C market
- e.g. increased demand for Encyclopedia books –> increased demand for paper
- e.g. increased demand for steel -> increased demand for steel workers (labour)
Demand in business markets is highly driven by developments in consumer markets
• Based on joint demand: demand for product/service is interdependent on each other
- e.g. more electric cars sold -> increased demand for charging stations (joint)
- e.g. more printers sold -> increased demand Printers & Ink
The demand (2/3)
• Demand in business markets is price inelastic: a change in price causes a smaller %
change in demand => because there are few alternatives e.g. if price of petrol falls
30%, but demand for petrol only decreases 10%
• Most B2C goods/services are price elastic: a change in price causes a bigger % change
in demand
- 2 exceptions:
Giffen goods are essential goods (rice, potatoes, milk) Demand stays high when
prices increase (no ready substitute)
Veblen goods are goods for which demand increases as the price increases due to
its exclusive nature and appeal as a status symbol (yachts, fine wines)
The demand (3/3)
• Fluctuating demand: a small change in demand by consumers can have a big effect
throughout the chain of businesses that supply all the goods and services that
produce it
• Therefore in B2B:
- Need for market data, data analyst
- Budgeting & forecasting
- Account management
,Similarities between B2B & B2C
• Both require investing in marketing and advertising
• Both require good customer service & a customer-centric sales process
• Both require digital presence
• Each model creates value
• Brand image is an essential element in both models
• Both models can have online and offline sales
• A single company can operate in B2B and B2C segments
Distribution channels
Direct channel
Indirect channel
, Wholesaler vs Distributor
Hybrid channels
• Hybrid channels are a mix of direct and indirect channels: the manufacturer partners
with intermediaries but still controls customer contact
- e.g. brand promotes products online but doesn’t deliver them directly to customers.
Instead, they nominate authorized distributors
B2B Buyers
Business marketing are marketing activities of an organisation towards other organisations
• Commercial businesses (industry & services)
• Resellers
• Governments (local/national/supra-national)
• Institutions
What’s in a name? – Business Marketing
Business marketing or B2B (business-to-business) marketing are marketing activities
(marketing of products or services) of an organisation towards other organisations
=> building, maintaining, and expanding relationships with other businesses B2B
Marketing aims to create added value for businesses that implements its
products of services. B2B Marketing seeks to convert this added value into - leads
- sales opportunities
- and turnover for profit-focused companies
B2B marketing
Definition - 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
Top B2B Brands – global
Characteristics of B2B markets
The market
,The buying process
The demand (1/3)
• Based on derived demand: demand for product/service is determined by the demand
for consumer goods/services on the B2C market
- e.g. increased demand for Encyclopedia books –> increased demand for paper
- e.g. increased demand for steel -> increased demand for steel workers (labour)
Demand in business markets is highly driven by developments in consumer markets
• Based on joint demand: demand for product/service is interdependent on each other
- e.g. more electric cars sold -> increased demand for charging stations (joint)
- e.g. more printers sold -> increased demand Printers & Ink
The demand (2/3)
• Demand in business markets is price inelastic: a change in price causes a smaller %
change in demand => because there are few alternatives e.g. if price of petrol falls
30%, but demand for petrol only decreases 10%
• Most B2C goods/services are price elastic: a change in price causes a bigger % change
in demand
- 2 exceptions:
Giffen goods are essential goods (rice, potatoes, milk) Demand stays high when
prices increase (no ready substitute)
Veblen goods are goods for which demand increases as the price increases due to
its exclusive nature and appeal as a status symbol (yachts, fine wines)
The demand (3/3)
• Fluctuating demand: a small change in demand by consumers can have a big effect
throughout the chain of businesses that supply all the goods and services that
produce it
• Therefore in B2B:
- Need for market data, data analyst
- Budgeting & forecasting
- Account management
,Similarities between B2B & B2C
• Both require investing in marketing and advertising
• Both require good customer service & a customer-centric sales process
• Both require digital presence
• Each model creates value
• Brand image is an essential element in both models
• Both models can have online and offline sales
• A single company can operate in B2B and B2C segments
Distribution channels
Direct channel
Indirect channel
, Wholesaler vs Distributor
Hybrid channels
• Hybrid channels are a mix of direct and indirect channels: the manufacturer partners
with intermediaries but still controls customer contact
- e.g. brand promotes products online but doesn’t deliver them directly to customers.
Instead, they nominate authorized distributors
B2B Buyers
Business marketing are marketing activities of an organisation towards other organisations
• Commercial businesses (industry & services)
• Resellers
• Governments (local/national/supra-national)
• Institutions
