Industrial marketing, or b2b marketing, is a market for goods and services that companies sell not to end consumers, but to other companies.
In English, b2b marketing is marketing the sale of a company's goods or services. In other words, this type of marketing is used if you manufacture and sell something that is not targeted at the end user, but at the organization (for example, a company sells parts for sewing machines that the company uses to make clothes). This name is used as opposed to another type of marketing that is aimed at the end consumer (for example, a company sells buns that ordinary people buy).
If we build a simple scheme of interaction between the company and consumers, as well as the movement of raw materials and the final product, we get the following chain:
Suppliers of raw materials and services - product manufacturer - intermediaries - end users.
In this scheme, end consumers are at the very end of the chain, and all other links are companies. Thus, b2b interaction can be much more voluminous and diverse, because any company producing a product must build interactions with both suppliers and intermediaries, as well as with distributors and other companies that may be included in this chain.
Features of demand in b2b markets
Demand in b2b markets also differs from that of end users. If a company needs a specific machine, the company will not only look for a machine at the best cost, but also pay great attention to the quality of the product offered. It is the quality that often becomes decisive. Thus, the demand in the b2b market is not elastic.
Another quality is what is called acceleration of demand: if our company sews clothes, the more buttons we need, the more clothes we sew. That is, the demand of our company for buttons will be directly proportional to the amount of clothing that we produce and sell. And vice versa: if there is a crisis in the country and clothes are not sold, the company will not buy buttons. On the other hand, the demand for our jackets and blouses forms the demand of our company for buttons. So the demand in the b2b market can be derivative.
Differences between the b2b market and the consumer goods market:
· Fewer buyers, but each of them is very important and significant;
· Buyers are concentrated in several points.
A huge number of companies are concentrated in large cities and the capital region. It is also worth noting that there are industries that are densely concentrated in one area and even in one territory. In the same region, there may be a whole group of suppliers serving this industry.
Buyers purchasing goods and services on the b2b market are not amateurs. They are well versed in what they buy, and often companies have very close relationships with sellers, and this must be taken into account: they know exactly what they need and how to buy it. In addition, in large companies, a whole department is engaged in procurement and the decision to purchase a particular product is made by several people, and the purchase decision itself is a long chain.
Knowing these features will help you promote your products on the b2b market more effectively.
