What should be the strategy for B2B marketing?
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Business buyers tend to buy all the products and services from one seller or few sellers. This benefits the organisation in many ways.
For Example,
1. It helps in cost reduction,
2. No over storage needed for emergencies,
3. Long term relationship brings effectiveness,
4. Less price fluctuation as contract signed over long period.
The decision making differs from organisation to organisation. Depending on the size of the organisation, the decisions can be made by different people. Decisions can be related toProduct characteristics, price negotiation, selecting a supplier, contract/ paperwork.For a small firm which has limited resources and small production unit, a single person like a Senior Production Manager can take all the decisions with the help from its staff.
The business should invest in effective promotion campaign to promote its products. The company representatives should be adequately trained and supported to do presentations and generate leads. In today’s competitive environment, each and every organisation is striving to increase its market share. So it becomes important that the organisation reaches to Business buyers and effectively communicates about its products and services.
The marketing team has to proactively reach out to organisations to give presentations, etc. for the sale of their products. They need to understand the structure of the organisation to identify the various approval and advising authorities for effective sales and competitive advantage.There are two main factors that affect business to business deals – Organisational factors and Individual and Interpersonal factors of Buying centre participants
Organisational Factors – like people, organisations also have an image. They hold values that influence its style of functioning. These refers to its structure, formal or informal interaction among departments, etc. This understanding helps suppliers identify how dealing with one organisation is different from the other. Organisations should ensure that they maintain a positive image as it becomes difficult to change the same in a short period. For example, some organisations rely on high quality of products for manufacturing. The purchasing process involves most of the discussion on quality. Some government organisations, like Indian railways, buy products by bidding process. Here most of the time lowest bid is often selected. Some other organisations rely more on factors other than price. The suppliers/business marketers need to create an adjacent marketing mix that suits the procedure of buying for individual organisation.
The organisational functioning in most of the private sector is different as compared to public sector (Government organisations). In private sector where efficiency, individual effort, continuous improvement, hard work instead of leisure, risk taking, etc. is dominant, some doesn’t holds true for a postal service offered by the government where the decisions are made at the top and passed on to the junior staff. Some organisations reward individual efforts rather than collective efforts. Western organisations prefer individual inputs and are rewarded for the same. Whereas in Japanese or other eastern origin organisations, team effort is rewarded.
The organisations also create an image of the suppliers basis the products, formal-informal approach/interaction, reliability, requests processing on various requirements, decision making authority (centralised or de-centralised), etc. A negative experience with a supplier or Buyer organisation constitutes learning for both sides. Relationship with such organisations or suppliers is often discontinued.
The business marketers should study these organisational characteristics as opportunities and design their Marketing Mix Strategies accordingly. The suppliers need to carefully influence and present themselves via ad campaigns in business magazines, and also their conduct with existing clients.
Individual and Interpersonal factors of Buying centre participants – the individuals at the buying centre affect the purchase decisions due to many factors. The participants may exhibit conflict based on rewards, demotion, expertise, special relationship with other participants, etc. Other characteristics which business marketers should study include personal goals, professional experience, life-style, attitudes and opinions, personality traits, etc. Like consumer buying characteristics, the participants at buying centre are also influenced by emotions, beliefs, etc.
There could be difference of opinion on price and quality of product. The final approval authority may be concerned about the cost of the purchase whereas the production and marketing manager may stress of product characteristics. The participant of young age who have exposure to latest theories may have a different opinion from a participant of an older age working in the same organisation for a long period. A new member having worked in different organisations will bring new ideas to the table as a participant in the Buying Centre. The Buying centre should weigh all the inputs, and opt for products that support the marketing objectives of the organisations.
Only reaching the buyers and making promises doesn’t helps much. The organisation should look at a long term relationship with its clients. There could be requests from clients for products or services that organisation doesn’t provides. At this point the management should take this as an opportunity for creating a new product or service or modifying its existing product or service, and invest in the same if found feasible.
The supplier organisation should try to understand the individual preferences during business meetings and presentations based on the questions asked. They may clearly make out from the questions asked if price, quality, continuous supply, long-term contract, etc. are significant for the organisations. Designing an appropriate Marketing Mix will be beneficial for the business marketers from the suppliers’ side.
I would like to share my experience. I worked for an MNC which provided customer service to a client’s customers. We as service providers found that the tool used by the clients which stored all the necessary business information was not effective in answering the customers. We helped the client in providing material to be uploaded on their intranet and internet website. As we were in regular touch with the client’s customers, we were in a better position to understand their challenges. This move helped forge a long term relationship with the client. There were better reviews and feedback from the customer and also increase in their revenue. Because of these efforts, the client started giving more business to us.
It should be a win-win situation for both businesses.
For more on promotion tools and making a proper sales approach please read –
Promotion Mix – Marketing Communications