Which of the following is a main difference of business markets from consumer markets?

It’s true. Business buyers are people, too. They seek personal benefits and make emotional buying decisions just as in their consumer lives. Gone are the days of stodgy, feature-driven industrial marketing campaigns. Business marketers now rival their consumer counterparts with increasingly engaging and entertaining creative strategies.

Still, there remain intrinsic differences between business-to-business (B2B) and business-to-consumer marketing (B2C). The source of these differences is the complex and interdependent relationships between business buyers and sellers and their relative positions in the supply chain.

Consumer marketing sells products to individual consumers and households who purchase for their own consumption. The B2B market; however, is composed of a succession of companies acquiring goods and services for the production of other products and services that are sold, rented or supplied to other companies. This creates a highly complex and continuous sequence of businesses buying from other businesses.

Keeping these critical differences in mind may help B2B marketers in planning strategies and crafting offers.

1. Business Needs vs. Consumer Wants

Most consumer goods are discretionary products people may want but don’t necessarily need, for example entertainment services, consumer electronics or vacation travel. Consumer buying behavior is based on perceived characteristics such as style, fashion or peer acceptance. Emotional factors play a big part in consumers’ purchase decisions. So consumer marketing focuses on stimulating discretionary buying behavior through persuasive messaging and media investments to generate demand.

In contrast, businesses usually come prepared to 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 fulfill that need.

2. Smaller & Highly Specialized Markets

Business marketers generally sell to narrower vertical markets substantially smaller than most consumer markets. B2B marketers may target only a few hundred prospects but consumer markets can number in the millions. Due to the smaller size it’s often possible to identify and profile all the prospects within a particular business market and approach each with customized marketing communications and in-person sales contact.

3. Individual Business Buyers Represent Higher Value

Business marketers focus on fewer, more intimate and longer-term customer relationships. Sales involve significantly higher average dollar amounts to smaller groups of customers with exponentially greater lifetime values. A few large customers can easily account for the majority of a B2B company’s revenue. Due to the significantly higher transaction amounts and lifetime values, B2B tactics can accommodate a higher marketing investment per contact.

4. Closer Proximity & Higher Degree of Independence

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.

5. Product Importance

The physical product is of greatest importance in consumer markets. In B2B markets, the purchase extends beyond the product and includes an array of economic, technical and personal relationships between buyer and seller.

While the product quality is important, this must be matched by quality and reliability of the relationship. The buyer depends on the supplier for many things beyond the product itself, including an assured supply of materials, service, efficient order handling, delivery, and often extension of credit. These factors can have more influence than having the perfect product, since supply chain complications cost the customer in terms of stock, downtime, lost orders, etc.

6. More Complex Products Requiring Customization

Many business products are specialized and require a high degree of technical customization for specific applications. Even everyday products tend to be more complicated because of their use and application in specialized business processes. The widely varying needs of business customers dictates highly personalized marketing, including customized products, services and prices. Even meeting buyers’ basic operational buying needs typically requires some level of customization to logistics quantities, delivery and invoicing.

7. Stronger 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.

8. 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 behavior is characterized by a formal multi-step process conducted professionally over a period of time, involving many people interacting within a formal organization.

9. Customers’ Product 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 B2B marketer.

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.

10. Longer & More Formal Buying Process

Every business organization has formal purchasing policies, procedures and levels of purchasing authority that don’t exist for consumers. Business buying processes are complex and highly structured requiring multiple steps drawn out over a period of time and involving a wide range of individuals representing various areas of expertise or interest from within the organization.

Marketers must recognize when it’s time to stop nurturing leads through marketing channels and hand those prospects off to the sales team. Conversely, sales must recognize when to recycle dormant leads back to marketing for further nurturing.

What are the differences between consumer markets and business markets?

How does the business market differ from the consumer market quizlet?

What is the difference between business and consumer products?