Business-to-business...

It is very important to be aware of a big difference between two phrases which only sound similarly: business-to-business and business-to-consumer (B2B and B2C). It a big area of modern marketing. Business to business relations are much more complicated than these related to consumer, where selling a product is only aim. There are many theories worked out for persuading consumers that one product is better than another. But that is the past! Now, it is very important to create relationships between businesses, not only with consumers. A B2B company needs to focus on relationship building and communication using marketing activities that generate leads that can be nurtured during the sales cycle. B2B companies use marketing to educate various players in the target audience because the decision to purchase is usually a multi-step process involving more than one person. (VistaConsulting, 2009)

There are few basic differences between B2B and B2C, especially in using marketing communications:

B2C

• Product driven
• Maximize the value of the transaction
• Large target market
• Single step buying process, shorter sales cycle
• Brand identity created through repetition and imagery
• Merchandising and point of purchase activities
• Emotional buying decision based on status, desire, or price

B2B

• Relationship driven
• Maximize the value of the relationship
• Small, focused target market
• Multi-step buying process, longer sales cycle
• Brand identity created on personal relationship
• Educational and awareness building activities
• Rational buying decision based on business value

There are a few very important terms related to B2B subject. These are:

Derived Demand – it ultimately derives from the demand for consumer goods. The dependence of derived demand encourages B2B marketers to sometimes promote their products directly to final consumers to increase business demand.

Inelastic Demand - total demand for a product that is not much affected by price changes, especially in the short run.

Professional Purchasing – companies are not people they do not buy on impulse!

Reciprocity - arrangement between two participants in the producer market who are both buyer and seller to each other. For example, a company providing services to a trade journal may pay for advertising space in the journal with their services. A reciprocity opportunity may persuade a company to choose a less desirable vendor in exchange for sales made to that vendor.(allBusiness, 2009)

Leasing – a contract renting land, buildings, etc., to another; a contract or instrument conveying property to another for a specified period or for a period determinable at the will of either lessor or lessee in consideration of rent or other compensation. (OnLine dictionary, 2008)

Leasing scheme:

1. A leasing contract is signed between the Lessor and the Lessee
2. The Lessor pays the purchase price to the Supplier
3. The equipment is delivered to the Lessee
4. The Lessee pays lease rentals determined by contract to the Lessor.

Off course many types of companies are using B2B marketing methods in a way suitable for them. There are many types of these organizations:

The level of involvement depends on the item of purchase. As it was proved during the lecture not many people are needed to decide about purchase of water to the office, but situation is changing when we are talking about new scanners or computers. So, as it was mentioned a few post ago in B2B relations the level of involvement is very important. It decides about the closure of relationship between companies.