How does the buying process differ between
consumers and business buyers?
Business buying is the buying of products and services by an
organisation for end use purpose. Business buying behaviour refers to the actions
of employees of an organisation to buy products and services for the
organisation, which includes the decision-making process of selection of
suppliers and bearing post purchase consequences.
In this market, business buyers buy products on a large scale
either for production of another product or for their own use. They buy
products and add value to the same for selling to Consumers, such as raw
material (crude oil, steel, etc.), final products for company use (generators,
printing machines, etc.), and office stationary, etc.
When considering the buying process for B2B, the following
questions need to be considered;
situations do our customers’ buyers face?
participates in the business-to-business buying process?
business buyers make decisions?
institutional buyers and government agencies do their buying?
Major differences in B2C and B2B markets can be seen in several
Mindset – the
reasons for purchasing varies between B2B and B2C. A business is usually purchasing on a “needs”
basis, whereas consumers are often purchasing on a “want” basis.
Many consumer purchases are discretionary products that
people may want but don’t necessarily need, such as consumer electronics or
travel, and the buying behaviour can be based on characteristics such as style,
fashion or peer acceptance.
In contrast, businesses usually buy a solution to a need –
products that are required for daily operations, or to solve a specific
business problem. Their need pre-exists. Product performance characteristics
are far more important than the image of the product. Business buyers are less
emotional and more task oriented. It’s simply a matter of finding the
supplier who can best fulfil that need.
Planning – Most purchases made by a business are
planned in advance, where purchases might be impulse buys for a consumer. When ordering new cleaning equipment, a
business may make contact with the selling business, arrange to see a sales
representative, may arrange samples, may undertake trials, and may speak to a
number of Companies.
A consumer ordering such equipment may visit a website,
perhaps visit a shop, discuss with friends, but the decision is far more likely
to be an impulse decision.
To be able to accommodate both business and consumer purchases,
the company needs to have a structure in place that allows businesses to plan
their purchases while still offering impulse options to consumers.
Buying Process – the
process of buying in B2B varies greatly to B2C due to factors such as the size of
the markets, which tend to be much larger than B2C markets but are usually of
much greater volume and value), the numbers involved in the buying process, and
markets can be highly specialised in B2B.
One to One relationships – In consumer marketing, the relationship often ends
with a remote transaction made through a retailer. The manufacturer rarely
makes personal contact with the consumer.
In business marketing, the
buyer-seller proximity is reversed. In most cases the supplier visits the
customer in person and establishes a true one-to-one relationship with the
customer over an extended period of time.
Expert Buyers &
Multiple Decision Makers – Consumer purchases typically involve an individual
decision maker in a single-step transaction.
Compared with consumer decision making, business buying
behaviour is characterized by a formal multi-step process conducted
professionally over a period of time, involving many people interacting within
a formal organization.
Knowledge – Consumer marketing is aimed at a mass market and doesn’t
require deep knowledge of the product or supplier to make a purchase decision.
Business buyers are comparatively more sophisticated and
educated than consumers. The business customer has years of training in his or
her field and often knows more about the product and its application than the
The expertise of business buyers falls into two categories:
buying process or technical expertise. Procurement managers are buying experts
whose sole function is to procure products and services on behalf of the
company. Technical experts and users possess a strong understanding and
interest in the problem to be solved and the product being marketed as the
solution. And throughout the sales process business buyers continue to learn
about a supplier’s cost structures, production methods, development expertise
and financial viability.
Customer-Centric Focus – B2B marketing requires that all parts of the
business be customer-oriented and that all marketing decisions are based on a
complete and accurate understanding of customers’ needs. B2B companies are
usually closer to their customers and more knowledgeable about their needs than
the typical consumer company.
Decision-making – In most B2C purchases, the consumer
decision-maker is usually the person that ultimately buys the product. A consumer buying an individual laptop is
likely to be the person who will use that equipment. A business purchasing process starts with an
idea and then goes through a formal approval process. The person that makes the
final purchase is often a purchasing agent or departmental representative. It is likely that the purchaser may not be
the final user of the equipment, and they may be buying in volume.
Support – Many businesses require support contracts
when purchasing certain types of items. For example, if a business purchases a
copier, then it may need to have at least a three-year warranty on the product
before the company can finalize the purchase.
A consumer is not restricted by support needs when it comes
to buying products, but that does not mean that support is unimportant to a
consumer. Adequate support for a product can be sufficient to an end consumer
as part of the final purchase contract. For a business, the support issues may
need to be spelled out in a more comprehensive manner.
History – The relationship between a vendor and a
business can be a significant factor in the buying decisions for the company.
For example, if a business has an ongoing relationship with an office supply
store, then pricing contracts and dedicated support personnel can make the
relationship beneficial to the business. An individual consumer is encouraged
to compare prices and offers between companies and does not base buying
decisions on ongoing vendor relationships.
What are the key fundamentals in b2b markets and
how does the marketing mix differ in these markets?
well recognised that B2B marketing is complex,
rapidly evolving and requires structured strategic planning.
For both B2C and B2B markets,
there are shared fundamentals strategies, including;
Defining the target market
Providing added and unique
value to the product
Communication with the target
Setting of goals
Constant refining and
There are also many shared
facets in the approach of marketing between B2C and B2B markets. Both are businesses selling to consumers,
either online or offline, both make use of marketing events, direct marketing, internet
marketing, advertising, public relations, word of mouth and alliances to assist
in their selling. However, how they are
executed, what they say, and the outcome of the marketing activities are
successful established Company, GTech already has strategies in place for the
B2C market. The challenge will be how to
modify these to suite the B2B market.
In B2C marketing, decisions
such as buying a new car or planning a family holiday, are usually confined to
the small family unit, while items such as clothes, food and personal care
products usually involve just one person. In contrast, in B2B the
decision-making unit can be highly complex, with the target audience made up of
groups of constantly changing individuals with different interests and
motivations. Buyers seek a good financial deal, superior quality and
often low risk.
Perhaps the most important
difference is in the mindset of the two markets in terms of purchases. Businesses tend to work hard to streamline the buying process
to save time and money, making the decision primarily based on logic, whereas
with consumers a purchase is based much more on emotion.
To set up a B2B marketing plan
based as an extension around modifications to the existing B2C offering, it is
important to understand the differences in the mindset of the two consumer
With B2C marketing, there are;
Purchases made for individual or household
usually made by individuals
are often based on brand reputation, personal recommendations with little or no
iv) Multiple sales calls
With B2B marketing, there are;
More buyers with different functions
over 4 people involved per purchase
made for a purpose rather than personal consumption
based on primarily rational criteria
vi) Fewer, larger customers
engage in lengthy decision processes
buying involves a more professional
B2C is often termed a numbers
games, whereas B2B can be termed a value game.
A B2B plan will need only a smaller higher value number of customers to
It is not about the product, it’s about the people using the product
It must also be recognised that buyer demand is derived from final consumer
demand, and that that demand fluctuates quickly.
GTech clearly has a successful marketing operation in place,
works very well in the B2C market.
GTech’s task is to adapt this operation to attempt to gain traction in
the B2B market, making the assumption that the same products are to be offered
to the B2B market.
The Company already has an offering that addresses;
of focus (segmentation)
of changing customer needs
What needs to be considered is how this
offering can be tweaked to be of interest to the Business Market.
The questions GTech needs to ask itself, in relation to its
shift to the new strategy, are;
is my market and how does it segment?
Which channels do we want to be in for
do we differentiate our offer from our competitors?
viii) How do we communicate this offer to
can our company build strong relationships with business customers?
business market comprises all the organisations that buy goods and services for
use in the production of other products and services that are sold, rented, or
supplied to others
To implement the marketing of this new element of the
Company, I am suggesting the following key action areas;
The initial consideration will be to set in place the
offering that will be made to the B2B community. The unique selling points of the products
will need to be given a different slant to be more appealing to the B2B
market. Areas such as warranties,
after-care, returns policies etc must be given greater importance.
The “kick-off” to the venture A “heads-up” marketing event
by the Managing Director – to stimulate initial interest in the new venture, I
suggest Mr Grey uses his existing publicity channels to tell the business world
of his forthcoming venture. This is
likely to be a mixture of TV, radio, business newspapers, and social media.
Once the business community have had their “interest
wetted”, the next stage will be to implement a suitable social media
strategy. This will need to be a
different emphasis to the social media strategy for the B2B section of the
marketing. Instead of a reliance on
Facebook, Instagram and such like, use will need to be made of LinkedIn and
In addition, the content of the marketing will need to be
varied to be much more succinct, with different visual content and media form,
such as e-books, newsletters, etc.
There will also need to be modification to the Company
This would need to be of a different slant for the B2B
world, with the provision of a separate website for the B2B world, although
perhaps a separate section added to the existing website may be more
appropriate, with the front end with two sections (consumers as one, businesses
as the other, with these effectively being standalone websites).
The B2B section of the website will need to be seen as a
lead generator, not an order generator as it is for the B2C section and needs
to be written accordingly.
The next stage of the marketing plan would be a marketing
event. It is important that the
additional offering is promoted as a “new venture”. This can then be used to attract the
attention of the business world to an important business event.
A suitable venue should be hired, and the “great and the
good” of the target areas of the business world could be invited to see the new
As a follow up to the marketing event, contact should be
sought with potential business customers, initially using existing contacts
from previous experiences of the Managing Director and the existing marketing
It is important for the Company to be able to make direct
contact with these buyers, and face to face meetings is the desired
As a successful existing Company, it already has a head
start against start-up companies, in that it already has a number of products
The CEO of the Company and its marketing department will
already have a number of B2B contacts, through their previous business
It is likely that new marketing staff will be required who
possess differing skill sets to the existing B2C sellers.
The Company will also need to implement a lead generation
policy, alongside the lead nurturing, and this tends to be a more thankless
task which can take much longer to bear fruit.
Whereas with B2C markets the offer can be sent out to
unidentified individuals, with B2B the offer has to find its way to the desks
of the decision makers or buyers.
A number of lead generation companies exist, and these are
often engaged to provide databases of further companies, including contacts,
business criteria etc.