What is industrial marketing?

Industrial marketing, or b2b marketing, is a market for goods and services that companies sell not to end consumers, but to other companies.

In English, b2b marketing is the marketing of the sale of goods or services of a company. In other words, this type of marketing is used if you produce and sell something that is focused not on the end user, but on the organization (for example, a company sells parts for sewing machines that the company uses in the manufacture of clothing). This name is used in contrast to another type of marketing that is aimed at the end consumer (for example, a company sells buns that ordinary people buy).

If we build a simple scheme of interaction between the company and consumers, as well as the movement of raw materials and the final product, we get the following chain:

Suppliers of raw materials and services - the manufacturer of the product - intermediaries - end consumers.

In this scheme, end-users are at the very end of the chain, and all the other links are companies. Thus, the interaction of b2b can be much more voluminous and diverse, because any company producing a product should build interactions with both suppliers and intermediaries, as well as with distributors and other companies that may be included in this chain.

Features of demand in b2b markets

Demand in b2b markets is also different from end-user demand. If the company needs a particular machine, the company will not only look for the machine at the best price, but also pay great attention to the quality of the goods offered. It is quality that often becomes decisive. Thus, the demand in the b2b market is not elastic.

Another quality is what is called demand acceleration: if our company sews clothes, we will need the more buttons, the more clothes we sew. That is, the demand of our company for buttons will be directly proportional to the amount of clothing that we manufacture and sell. And vice versa: if the country has a crisis and clothes are not for sale, the company will not buy buttons. On the other hand, the demand for our jackets and blouses forms the demand of our company for buttons. So the demand in the b2b market may be derivative.

Differences of the b2b market from the market of consumer goods:

· Fewer buyers, but each of them is very important and significant;

· Buyers are concentrated in several points.

A huge number of companies are concentrated in large cities and the metropolitan area. It is also worth noting that there are industries that are densely concentrated in one area and even in one territory. In the same region, a whole group of suppliers may appear that serve this industry.

Customers purchasing goods and services on the b2b market are not amateurs. They are well versed in what they are buying, and often companies have very close relationships with sellers, and this must be taken into account: they know exactly what they need and how to buy it. In addition, in large companies, a whole department is engaged in procurement and several people make the decision to purchase this or that product, and the purchase decision itself is a long chain.

Knowing these features will help to more effectively promote your products on the b2b market.