What is B2B, meaning and difference with the B2C market

B2b is the acronym of the expression “business-to-business”, used to describe commercial transactions between industrial, commercial or service companies within the so-called inter-organizational or B2B markets.

b2b: meaning of Business-to-business

B2B or Business-to-business  is the English expression, widely used in Italy, used to refer to commercial exchanges between companies and is usually associated with electronic commercial transactions that take place between the latter. However, it is used more generically to talk about the relationships established between companies along the value chain before the product reaches the final consumer: every business-to-consumer activity generates business-to-business exchanges. In this sense, business-to-business exchanges include all transactions established between a company and its suppliers or between a company and other companies in the same sector.

Characteristics of the b2b market

The difference between B2B and b2c (where the exchange takes place between company and consumer) also concerns the fact that in industrial markets (also called business markets) both sellers and buyers are organizations. For this reason, the markets in question are often referred to as  inter- organizational markets and can include both multinationals and micro-enterprises.

However, it is a highly complex market in which the type of exchange between the players can take different forms: from regular transactions to partnerships between companies or institutions.

In the book ” Business marketing management ” Hutt and Speh propose a classification of products or goods for B2B markets that allows you to have a clearer view of the exchanges that take place in these markets:

  • input goods : raw materials, semi-finished products, materials, components and all the goods that will be part of the finished products;
  • capital goods : plants or machinery and all goods supporting production and logistic processes (think, for example, of buildings or desks and computers);
  • facilitating goods : they concern both the support of organizational processes (such as paper, for example), and the maintenance and repair of goods (such as computers or machinery), but also consultancy and staff training services.

B2B examples

Starting from this classification, as an example of exchanges in B2B markets it is possible to refer to the transactions that take place between a company that produces machinery and a food company that needs this type of capital goods for its production process and that carries out exchanges with another company that supplies raw materials necessary for the realization of the finished food product.

Another example could be that of a law firm that buys computers for its employees from a computer equipment company or, again, that of a sportswear company that relies, for legal reasons, on a company. consulting.

THE BUSINESS CUSTOMER: the heterogeneity and continuity of business-to-business relationships

The customer in the business-to-business market, called business customer, is not a consumer, but ” an organization that purchases products and services to carry out in turn economic co-productive and service activities “, as Annalisa Tunisini explains in the book ” B2B marketing “.

The continuous need for resources (whether they are raw materials, components, machinery or consulting services) to carry out one’s business is one of the reasons for the  continuity  that characterizes the relationships established between business-to-business players, as the author explains. There is therefore talk of  continuity in the supply of goods or services and in terms of actors : the reference is, that is, to the establishment of relationships between business customers and suppliers that can last several years.

On the other hand, if in B2C the company can establish relationships of a different nature depending on the degree of customer loyalty (think of loyalty programs and the creation of exclusive products, services or benefits for  VIP customers ) in the case in B2B, the  relationships that can be established between companies tend to be even more heterogeneous . Think, for example, of a tire manufacturing company whose customers can be not only car manufacturers but also retail tire dealers: these two customers have very different business models and different needs, thus establishing commercial relationships. different with the tire supplier company.

B2b Marketing: communication from company to company

During the B2B Day 2021 event, Tommaso Dainese , client manager of Marketing Arena, expressed some interesting considerations on marketing activities and how they are perceived in the B2B sector . According to the expert, for many years the marketing and branding activities have been perceived by B2B players as something less important for the success of the business, a trend which is obviously reflected in the budget dedicated to these activities. According to research conducted in 2020 by Statista, 32% of US B2B companies surveyed would invest no more than 5% in marketing activities.

In addition to investing little in their communication, as the expert pointed out, there are many companies in the sector that underestimate the usefulness of social networks and other channels, more used in B2C, which can instead generate important results even when customers are of companies.

Some surveys, such as the one conducted by GlobalWebIndex in 2019, highlight the impact of social networks on the buying process of B2B buyers . about a third of the decision makers interviewed, belonging to this sector, would use social networks to search for new products or services and about three out of ten decision makers would do so to compare prices . Even if for a long time social networks have been considered almost the exclusive prerogative of B2C, they have become increasingly relevant in the different phases of the buying process of B2B buyers.

Regardless of the tools or strategies chosen, however, the communication of companies addressed to other companies must take into account the specificities of the target which obviously is very different from the consumer customer of the B2C company. Thus, marketing strategies must be suitable for the business client and respond to his expectations and needs.

Define the target and create targeted content

Considering that unlike B2C in B2B the decision maker is not a single individual but a group of people, the decision-making process also tends to be more complex . In fact, for example, while in the business-to-consumer sphere the mere interaction between seller and consumer in store can lead to purchase, in B2B the decision usually involves the organization of several meetings between members of the two parties and, possibly , technical consultants outside the company.

Depending on the size and needs of the company customer, the number of actors involved in the decision-making process changes, which potentially will have a greater or lesser role and influence in the choice between two suppliers: from the owner of the company to the technical consultant, up to the employee. who deals with quality control, everyone has their own role and can have a different influence in different decisions.

In this sense it is important to carefully analyze the various  subjects involved , their roles and their influence in the decision, so as to be able to effectively direct the commercial offer to the various actors who contribute to the evaluation and choice of the supplier.

Although the purpose is to communicate your products or services to other companies, it is important to always keep in mind that behind the organizations there are people, who will have to make decisions and who will be influenced  in a more or less positive way by the contents and from the message proposed by the company. Therefore, if in B2C the creation of targeted and useful content for consumers is predominant, business-to-business content marketing  has also become a useful resource for companies that want to make their products and services known.

Even if the advertising contents designed for this sector must meet the expectations of the target audience, there are examples of adv for B2B that, due to the format, characteristics, narration and / or tone of voice chosen, end up being appreciated by a wider audience , even becoming viral on the web. This was the case with the commercial created by Volvo Trucks with actor Jean-Claude Van Damme, which reached 50 million views on YouTube within two weeks.

B2B marketing is often linked to the creation of content with a more formal tone (compared to B2C), serious, and with a high degree of technicality. However, in this case, creativity was a key element in the creation of the commercial and was used to support the message that the brand wanted to convey, in a perfectly coherent way.

On the one hand, the choice of a well-known character like Van Damme, on the other hand the resumption of a gesture associated with the character in question, that is the epic “split” made in films like ” Kickboxers “: the different creative elements , familiar to many viewers , have been used to refer to very specific and technical characteristics , aimed at the company target , that is, not only to truck drivers, such as those presented, but to all those in the company who have the task of deciding about the purchase of similar vehicles .

The example in question demonstrates that B2B communication can convey more descriptive and technical content (necessary to respond to the information needs of decision makers) and still be as  engaging as B2C advertising. Furthermore, even when the information necessary to make a decision is not presented in an exhaustive manner, it is possible (as in the case of this commercial) that the ideas offered by such commercials are at least sufficient to attract the attention of the reference target , involving at the same time a large audience and thus increasing brand awareness .

Evolution and changes in the B2B sector: between ecommerce and “hybrid” sales models

Over the last few years, digital technologies have revolutionized different aspects and sectors of the business, including that of sales : ecommerce has upset the world of B2C but has also had a profound impact on B2B . The onset of the COVID-19 pandemic has also significantly accelerated the adoption of digital solutions capable of replacing “face-to-face” purchases.

Wanting to focus in particular on Italy, as emerges from a McKinsey research conducted in October 2020 on about 400 decision makers, 97% of Italian B2B companies would be ready to complete purchases entirely in ” self-service mode “, that is to say say using an eCommerce channel and completing the purchase without interacting with a seller or another member of the company staff.

The report also reveals that about 70-80% of B2B decision makers currently would prefer  remote human interactions (ie via platforms for the creation of online meetings) or “ self-service ” tools .

Although the approach of B2B buyers towards the purchase of products and services is changing considerably, it seems that many companies in the sector have not yet been adequately equipped to meet these needs, as pointed out by Alberto Casna , head of client experience in Marketing. Arena, at B2B Day 2021. From the data collected by the Observatory set up by Marketing Arena with the Ca ‘Foscari University of Venice, it emerges that only 25% of the companies interviewed sell online . As the expert added, ” there is a gap between supply and demand that must be bridged, there are activities that must be rethought ” in order to make the most ofnew technologies and adapt to new market habits.

Finally, an interesting aspect highlighted by Giulio Buciuni , director of the master dedicated to entrepreneurship at Trinity College Dublin, concerns the new approaches to sales of B2B players, who seem to be more open to enter the B2C market as well , exploiting the new digital tools to reach a different market segment. In fact, as the expert stated: ” many companies believe and see in technology [ie eCommerce platforms and social networks for example] an enabling tool for their conversion or transformation strategy – albeit partial – from pure B2B verticalsto hybrid forms that mix B2B with B2C commercial strategies ».

Previous articleBusiness ideas for female entrepreneur
Next articleBecoming a successful entrepreneur: 8 tips to follow