- March 18, 2015
- Posted by: Wevio
- Category: Market Research & Analysis, Wevio Blog
The Business-to-Business (B2B) market basically is different from the Business-to-Consumer (B2C) sector in terms of strategy and scope. Typically, B2C transactions occur through an intermediary sales channels, such as a retailer or agent, while B2B refers to transactions that take place between businesses and are generally upstream from consumer transactions. Below are the key criteria that distinguish B2B markets with implications that directly affect market research.
- Sales Process & Cycle
The B2B sales cycle is an extended process, often lasting several months or longer. Whereas in the B2C sector, according to a recent global market research, an average of 56% of consumers know the brand of product they want to purchase before they go shopping. The remaining 44% decides on the brand in front of them on the shelf.
B2B Sales approval process depends on different steps of the order processing phases. Researchers must recognize such differences in the sales cycle as they design research approaches and key questions. For example, in the B2B sector, it is critical to understand how the decision process evolves, how information is gathered on vendors and products, who makes the final decision, and so on. These questions have a different relevance in the B2C space.
- Product Complexity
B2B products are consists elements of a product that will be further processed and are purchased on a much larger scale that enhances the risk of a poor decision. B2B buyers are concerned about details such as product composition, raw material sourcing, inventory methods, quality control, etc. Consumers are free to have the same concerns about their purchase but very often lack the communication channels and the purchasing power to act on these concerns.
B2B value propositions are complex and market research methodologies must be gathered before making decisions. B2B value propositions must be spoken through detailed and properly expressed attributes that capture the key aspects of complexity, performance, and perceived value.
The price of the same size and brand of a consumer good may vary by 10% depending on the store or location. B2B products are less standardized. Products can differ not only by segment, geography, distribution channel, and customer, but also by volume, purchase history, importance of the customer, customization, and so on. B2B buyers also buy on value as opposed to price. They are better evaluators of life-time cost and making decisions that lead to a healthier bottom line.
Market research will help you to find the calculations among different B2B Suppliers to make the right decision on Quantity & Price.
- It’s less emotional and more rational.
Individual consumers are more likely to buy a product or service because it makes them feel happy, confident, entertained, or satisfied. With B2B, purchases are more focused on completing a task or moving a project forward. There’s less feeling and more thinking.
- Marketing Approach
Marketing is concerned with creating and maintaining demand—that does not differ between B2B and B2C. How that demand is created and maintained differs substantially. Consumers frequently buy based on emotion or impulse, but B2B buyers tend to be more logical, often using detailed decision criteria. Other factors that may influence B2B decisions include the fear of wrong decision, level of confidence in performance, and perceived obligations. To the B2B buyer, corporate brands that convey integrity, trust, and quality are more important than product brands. And lastly, B2B marketing messages are communicated more in person since the small number of buyers makes that contact cost-feasible and justified.
Research must address these realities by including data collection methodology that recognizes the key differences in the purchase decision process and the subtleties of B2B decision making.
- Product Knowledge
The volume of B2B products purchased, their complexity, and their importance as a component of a final product result in the need for buyers to have technical and operational expertise. Because of these realities, B2B buyers seek more detailed information, develop scenarios of potential problems, research alternative products, etc. Consequently, buying decisions are often a group or team effort.
Effective research must include various influencers and seek to confirm insight into their respective roles. It may be necessary to gather input from 5 or 10 individuals per company to fully understand a relationship. Because of the small size of the universe, ensuring statistical significance is normally not relevant or necessary.
- Channel Complexity
Although the internet has created an alternative to the traditional brick-and-mortar retail channel for many B2C products, B2B marketers routinely manage much more complex distribution channels. It is not unusual to sell the same product line through master distributors, distributors, agents or brokers, and even direct to end users. Each channel has different inventory, services, packaging requirements, and pricing structure.
It is important that researchers understand a company’s channel structure to be able to provide accurate results. Data collection should accommodate channel members and relative understanding of the product.
- Use of Market Research
For a producer of consumer goods, market research is required to understand the potential sales volume for a product or the impact of change to a product design, so consumer goods companies regularly conduct market research. The cost of failure is too high. This is not the case in the B2B sector where products are frequently introduced or existing products modified with little to no formal market research. According to Global Research, the US B2B sector equates to 8% of market research, or approximately $1.6 billion in value, or approximately $1,200 in market research expenditure per company with 10 or more employees.
Valuable market research can be conducted with a very small business universe or pool of informed respondents. However, B2B research does demand articulate, thoughtful design that reflects the fundamental difference of the B2B sector.
B2C Versus B2B: The Most Important Social Media Platform are used.
|SocialMedia Platform||% B2C Rank Top Social Media Platform||B2C Actionable Social Media Tip||% B2B Rank Top Social Media Platform||B2B Actionable Social Media Tip|
|67%||Make your fans into stars with images on Facebook.||29%||Use Facebook advertising to target your audience.|
|Blogging||11%||Answer one customer question per post.||19%||Give prospects information related to their hot button issues.|
|10%||Create a “Deal of the Day” account to promote one special a day.||16%||Integrate bite size tweets with easy to copy shortened URLs into presentations.|
|5%||Leverage LinkedIn’s power to reduce hiring costs.||29%||Participate in relevant groups to build your network & distribute your content.|
|YouTube||4%||Establish YouTube presence by offering how to videos.||4%||Optimize videos for search by adding keyword rich text.|
|2%||Put your products in context for prospects with styling.||0%||Build a Pinterest presence by using visuals, inforgraphics, & presentations.|
|Google+||1%||Build your Google+ presence with a regular posting schedule.||3%||Claim Google authorship.|
Conclusion: For B2B relationship to be successful it needs professional market research in order to make the right decisions.