BUSINESS MARKET: CHARACTERISTICS, COMPONENTS - ECONOMY - 2025

The business market is the way in which two companies carry out commercial transactions with each other, in which services or goods are negotiated to be used in the different manufacturing processes of the products, and then sell them and obtain a profit.

Commercial relationships in the business market must be planned, following marketing strategies designed specifically for each case. It is important that there are professional interactions prior to the sale, in order to strengthen ties and ensure that transactions are successful.

The business market is known by the acronym B2B (Business To Business, or Business to Business). Since B2B is between businesses, there can be strong competition. Success comes from highlighting the attractive aspects of the product, with competitive prices, effective distribution processes, short delivery times and possible deferred payments.

Companies oriented to commercialize with other organizations must guide their corporate image strategy to create a trustworthy image, showing a consolidated work team that professionally represents the company.

characteristics

More specific market niches

In the business market, companies do not direct their marketing campaigns at a mass level, but rather have a specific market, where their particular needs are met.

Because of this, both those in charge of buying and selling companies in this market seek to strengthen professional relationships.

Dynamic business marketing

The buying and selling process involves a large number of people, policies and specific conditions for each transaction.

The staff in charge must take care of every detail, which implies a high level of professional demand. Losing a sale could be devastating, just as winning a sale could be a major financial boost.

Long-term relationships with clients

The business market has a great future projection. There must be a continuous, consistent and personalized service at all operational levels (purchases, sales, production, among others), and an excellent advisory and after-sales service.

Potential customers

By the nature of the business market, companies often focus their purchases on those organizations that satisfy most of their business needs.

Getting a single lead can mean a lot of business for the company.

Complex commercial products

The variety of products that is marketed in the business market is very wide. Often times, some must be personalized or tailored to buyers' requirements, while many require that items meet very strict standards.

After sales service

Through this service it is sought to generate trust in the client and strengthen the commercial relationship. This is achieved by providing not only the option of addressing any claim situation regarding the products purchased, but also offering informative and technical advice on them.

Components

Providers

They are in charge of providing goods or services to other organizational groups. They are classified into:

Product providers

They are dedicated to the commercialization or manufacture of some type of product, with a certain monetary value, that satisfies a market need.

Service providers

They are in charge of providing basic services (electricity, water, telephone, internet), transportation, advertising, surveillance, accounting, etc.

They are of vital importance for the company, since they guarantee their proper functioning and operability.

Resource providers

Its purpose is to satisfy the needs of the company with economic resources; for example, banks, lenders, equity partners, etc.

Intermediaries

They facilitate the process of marketing a product, making it possible for it to reach the end consumer from the manufacturer.

Companies rely on intermediaries to increase their market share and have access to a greater number of clients, nationally or internationally.

They can also intervene in the purchasing and production processes, simplifying logistics and customer service tasks. Some commercial intermediaries are:

Logistics operators

They are responsible for collaborating in distribution activities, such as storage, product transport and packaging.

Commercial agents

Their role is to act as the manufacturer's main sales engine and represent it to customers. For their services they obtain commissions for the sales made.

Dealers

They are the point of contact between the manufacturer and the wholesalers or retailers. They have a direct relationship with the producers they represent, maintaining specific product marketing agreements.

Wholesalers

It is the commercial figure that directly buys products, in great quantity and variety, from manufacturers or distributors, which it then sells to retail companies.

Retailers

It is the business that is dedicated to the sale of retail products. It sells the products that it has previously purchased directly to the final consumer.

Supporting services

They have the function of offering support services to companies, in order to facilitate the fulfillment of their daily operations.

These include administration and staffing services, infrastructure maintenance, business security, etc.

Difference with consumer market

Often times, the total number of transactions in the B2B is greater than in the consumer or B2C market. This is because B2B negotiations are related to raw materials or product components, while B2C is only related to the sale of the finished product to the customer.

Another relevant aspect is that in the business market there are fewer buyers than in the consumer market, where there is a greater number of companies in charge of marketing the products to end users.

The buying process in B2B is complex, because it requires the involvement of technical, commercial, financial and operational groups, in charge of following the rules and procedures to make decisions. The consumer in B2C is the one who determines which item to buy, considering only their personal parameters.

In B2C consumers buy products at the same price for all. In the business market, the price may vary, as special prices are granted for large orders or for terms already agreed upon previously in the negotiation.

Sales and marketing

In the B2C market, consumers select products and use different payment mechanisms, such as credit or debit cards, checks or cash.

In the business market a commercial system is required where customers select products, place an order and agree on payment terms.

Marketing strategies in business markets are aimed at a specific audience that requires what the company markets, while in B2C it must cover the entire population, always seeking to attract new customers.

References

1. Investopedia (2018). Business to Business - B to B. Taken from: Investopedia.com.
2. Wikipedia (2018). Business-to-business. Taken from: en.wikipedia.org.
3. Ian Linton (2018). Differences Between B2C & B2B in Business Systems. Smallbusiness - Chron. Taken from: smallbusiness.chron.com.
4. David Weedmark (2018). 4 Types of Marketing Intermediaries. Smallbusiness - Chron. Taken from: smallbusiness.chron.com.
5. Tenfold (2018). 6 Major Differences between B2C vs B2B Sales Strategies. Taken from: tenfold.com.