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What Is B2B Marketing? - Definition & Examples

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  • 0:00 Definition Of B2B Marketing
  • 0:25 Differences From…
  • 1:35 Types Of Business Consumers
  • 3:00 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Businesses are customers, too. In this lesson, you'll learn about B2B marketing and gain some examples along the way. You'll also have a chance to take a short quiz.

Definition of B2B Marketing

B2B (business-to-business) marketing is marketing of products to businesses or other organizations for use in production of goods, for use in general business operations (such as office supplies), or for resale to other consumers, such as a wholesaler selling to a retailer.

Difference from Consumer Market

There are at least three major differences between marketing to consumers and marketing to businesses.

  1. Fewer customers - There are about 316,000,000 potential individual consumers in the U.S. alone. The number of businesses in comparison is much lower. In 2007, it's estimated that there were about 7,705,000 businesses operating in the U.S., and about 86% had fewer than 20 employees.
  2. Derivative demand - A significant amount of business demand is derivative of consumer demand. For example, a big box retailer's demand for books from its wholesalers may decline as its customers continue to transition to electronic books. This may not affect the retailer much, but it hurts the traditional publishing industry.
  3. Complex Transactions - The products and buying process are often more complicated. The products purchased are often very complex and expensive, like manufacturing equipment, and sometimes even custom made. Moreover, negotiation between buyers and sellers is much more prevalent because of the increased bargaining power of individual buyers.

Types of Business Consumers

There are several different types of business consumers.

  • Manufacturers are businesses that produce products. The bulk of their purchases will be inputs for their production, such as raw materials, components, and outsourcing of labor. They will also buy some products to support general operations, including office supplies, furniture, and computers.
  • Trade are consumers that generally purchase finished products to sell to consumers for a profit. Retailers and wholesalers are examples. A wholesaler might make a high-volume purchase of a product at a reduced price and then sell the product to retailers at a lower volume but at a higher price. Of course, trade businesses will also buy products to support general operations.
  • Government is certainly the largest consumer in the U.S. market, bar none. It spends trillions of dollars for goods and services ranging from pencils to billion-dollar aircraft carriers.
  • Institutions are organizations that engage in charitable, educational, and community activities. They can be public or private organizations. Common examples include universities and hospitals. These consumers generally buy products that support their service activities, like general office supplies and equipment, and specialized equipment needed for a service, such as an MRI machine.

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