The fundamental difference between business and consumer marketing

For many CEOs or management teams of industrial or service organizations, marketing is a ‘far from their reality’ matter. The decision-maker in an organization often rises from sales and sees this as the department where the money is made.

“Marketing costs money and yields nothing net.” The executive, brave enough to take the plunge, quickly loses their way in a maze of theories and success stories. All are based on the successful use of channels and tools to reach consumers; one simply replaces consumer with customer/client. Although the tools and channels are used in both fields, there is a fundamental difference between business-to-business and consumer marketing.

In a large part of the business-to-business markets, a limited number of participants are active; so every participant – customer or supplier – knows virtually all other competing organizations in the market. Supplier or customer relationships are entered into for longer periods, and strong interpersonal relationships exist between organizations. The modus operandi for these organizations is to retain current customers and quietly try to acquire new relationships. This influences the marketing strategy; an effort must be made to attract new prospects, but the most important thing is that under no circumstances should current customers be driven into the arms of the competition. This is why industrial and service organizations are considered conservative and cautious; there is too much to lose.

In stark contrast stands consumer marketing, where an action or campaign is entirely focused on the target audience and market position to be (ac)quired. Success here means that a certain percentage of the target group develops a preference for your product. If you can bind 10% of a new target group to you by alienating 90%, that is often an excellent result. In consumer marketing, the aim is to motivate a small part of the target group for the product, if necessary at the expense of the position with the rest of the market. Meanwhile, in business-to-business marketing, organizations want to acquire new customers on the condition that they alienate as few parties as possible.

This leads to the fundamental difference: business marketing primarily aims to prevent parties from dropping out, while consumer marketing is solely focused on finding people who want to join in.

Two examples illustrating this difference:

Trade fair (b2b) – At a trade fair, practically the entire market can be found. Every organization is mainly there to receive current customers and to ‘make an appearance’. A limited number of valuable relationships are entered into here, which may lead to negotiations in a few months.

Consumer fair (b2c) – Every consumer brand is represented with a stand, and a company sometimes has 5 different stands. Stands are staffed with hired salespeople with no connection to the brand, instructed to get as many samples as possible into visitors’ hands. Additionally, visitors are bombarded with ‘offers’.

The marketing bibles of Kotler and Verhage, from which lectures and lessons are given in business administration programs, devote only a few paragraphs to business marketing, while business-to-business turnover is a multiple of business-to-consumer.

In recent years, there has been a clear movement towards a more relational approach in consumer marketing, but the fundamental difference remains. Organizations in a strictly business market would do well not to base their marketing efforts on successes in consumer marketing, but perhaps on smaller successes in a business environment. They must, in line with their own strategy, look for actions that fit their own customers, employees, and organization. Maintaining and possibly building relationships must be central to this.