Scope And Challenges Of

Business-to-Business
Marketing

Group-2:
Rakesh Kumar(FT11153)
Ravish Anand(FT11158)
Vishal Sawlani(FT11275)
Umang Akhaury(FT11270)
Objective
Introduction to B2B
Industrial Sectors
Distinguishing Industrial Marketing
Aspects
The External Linkages
The Internal Linkages
Management Challenges
B2B: Introduction
The marketing of goods and services to
commercial enterprises ,govt. and other non-profit
institutions for use in goods and service that they
,in turn produce for resale to other industrial
customer.
Goods are bought for enhancement and
subsequent sale ,unlike consumer market wherein
it’s for final consumption.
Sectors
• Heavy equipment • Processed material
• Light Equipment such as • Consumable Supplies
PC • Components
• Systems such as database • Services such as
• Raw materials such as management consulting
crude oil
Distinguishing Industrial Marketing
Business-to-business (B2B) describes commerce
transactions between businesses, such as between a
manufacturer and a wholesaler, or between a wholesaler
and a retailer. Contrasting terms are business-to-
consumer (B2C) and business-to-government (B2G).
It is very different from the business-to-customer and
business-to-government.
It describes only industrial or capital goods marketing.
Today it is widely used to describe all products and
services used by enterprises.
Aspects
 The B2B system can be considered in terms of two key linkages:
 The External Linkages: Interface between sales function and the
end user.
 The Internal Linkages: Interface between sales function and its
manufacturing operations
The External Linkages
Derived Demand: Demand for industrial products are driven
by primary demand for consumer goods. For example: An
automobile is built from hundreds of components, engine,
wheels, exterior body parts, etc.
Complex Selling Process: In industrial markets, the
purchase of one piece of industrial equipment might involve a
host of departments, such as purchasing, engineering, finance
and requires top management approval.
Concentrated Customer Base: Industrial marketers
generally have a smaller base of potential customers, which
represent a large percentage of the industry’s buying potential.
The Internal Linkages
Emphasis On Technology: Technology and performance
superiority gives the industrial product competitive
advantages in its marketplace.
High Level Of Customization: Industrial products are
used in further manufacture or assembly of next level of
products, it is quite important to meet the requirements
of the user.
Order Fulfillment Mechanism: A large variety of
industrial products are made to order. Even if produced to
standard specifications, the actual manufacturing may
commence only after the customer order is received.
B2B:Management Challenges
New Product Commercialization: New product
development and its commercialization is the lifeline for
many industrial businesses because the pace of the
technology the rate of product obsolescence has
accelerated.
Market Segmentation: Industrial markets are more
likely to be segmented by industry characteristics,
purchase quantities or technical requirements. Such a
segmentation is very difficult to implement because
industrial customer will not segment themselves. They
need to be approached with a proper marketing mix.
B2B:More Challenges
Product Policy/Pricing: Industrial products are often
sold on the basis of technology, product features or
other functional properties. Because of the presence of
many suppliers, the products are usually commoditized.
In order to claim premium pricing, the products need to
be differentiated.
Channels Of Distribution: Industrial markets have a
narrower customer bases. They have sales teams and this
provides the sellers with many options for distribution
channels. So picking up the right channel of distribution
is difficult.
B2B: Few More Challenges
Inter-Departmental Coordination: In industrial
marketing, there is a heavy emphasis on team work and
in order to achieve a better teamwork, it needs everyone
from all the departments to work together. This is a big
“General Management” challenge.
Managing Social Responsibility: Product design must
include creative ways to use recycling. Industrial
markets must clearly go beyond narrow profit
maximizing objectives and demonstrate how their
business mission in addition to serving their
stockholders.
Thank You!!!