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). The main difference between B2B and B2C is who the buyer of a product or service is, and the different purchasing process.
Business Market research is a valuable tool
Business to business market research is more complicated than consumer research and finding the right respondents is crucial since they are often busy, and may not want to participate. Insight Survey is one of the few B2B market research companies in South Africa that can target difficult-to-reach business professionals.
These are the key factors that make Business to Business Market Research different to Consumer Research:
- The purchase decision is involved and complex – The value of many purchases is often very high and there are often many people, seldom are decisions taken by individuals.
- B2B demand is derived from consumer demand – Depending upon where you are in the value chain will determine how much contact you have with the end consumer, and your interactions with others in the value chain.
- Less choice, or ability to switch supplier – If the supply of a product is interrupted, it can be difficult to substitute or switch suppliers due to fewer alternatives available. Switching may have time and cost implications.
- Smaller customer base – B2B markets are often characterised by smaller numbers of customers, companies may have hundreds, rather than thousands (or millions) of customers.
- Personal customer relationships -For many companies, the key selling mechanism is to personally visit their key customers, thus providing a chance for strong personal relationships to develop.
- High value spend – Many transactions can be very large in value. In many markets, the Pareto rule applies – that 80% of value will be driven by 20% of customers.
- Technical products – Products themselves can be technical in nature, with customers wanting very exact information about what the product is or is not capable of – for example, technical data sheets, or technical performance data.
- Smaller, focused marketing budget – Advertising campaigns are often smaller, targeted and based on opportunities to see, feel and touch the product itself – trade shows and word of mouth still play a vital role.
- Who makes the decision? Who can I target in my marketing communications?
- What would happen if I made changes to our product/service? Would people still use it?
- What do my key accounts think of us? Are they satisfied with the service we provide them?
- How aware are people of the company brand and the individual product brands? How does this compare to other companies and products in the market?
- What do customers think are the key issues that the industry faces moving forwards, and how can we react to these changes and change our marketing approach to better meet needs?
- How can we stretch our brand? Which types of markets should the brands be extended to and which should they not?
- What do our customers expect from us? How does this compare to our actual performance?
- Are customers prepared to pay a price premium for anything in this market? How much can I charge?
- Are our employees satisfied to work for our company and how engaged are they?