What did we cover?
Following on from our session last week, where we explored the marketing mix and the factors we should consider when choosing your own marketing mix. This week, we talked about how we can adapt the marketing mix to the following organisation types, business-to-business (B2B), business-to-consumer (B2C), and not for profit/ third sector, and small to medium sized enterprise (SME).
Markets are dynamic, and constantly changing,. This blog in particular explains how we can shift our marketing activities in order to meet objectives that differ across organisations.
Business to Consumer Marketing
B2C marketing is usually the easiest of marketing techniques as, after all, we are all consumers. This gives us lots of previous buying experience to reflect on when deciding how you cater for your audience. For this business you need to ask all the questions that will be going through a consumer’s head before making the decision to purchase your product. The simplest way to do this is to imagine you are in their shoes, what do they want to know before buying?
After really diving into what they want to know and what takes a consumer to buy, you will need to tailor your marketing mix to their preferences. B2C’s use their product research and development to ensure that they are meeting their consumer’s needs and do continue to. This might include the after-sale care, such as a warranty for a phone, or added value such as ‘bundles of benefits’ which could be extra data free for a month with the purchase of a phone.
Product:
Business to consumer marketing needs to ensure that their products differentiate from their competitors. This is because consumers have a shorter decision process, than say, a team of influencers within a business making a B2B buying decision. Consumers won’t see the value in your product. Your product must cater to the individual’s needs; survey’s and focus groups are a good way to conduct this research.
Price:
Pricing strategies will vary depending on how well the brand is established; consumers might pay more for the brand itself even if a competitor is offering a similar cheaper product. The price needs to match the quality of the item.
Place:
There are many ways that the product can be distributed to the consumer, this includes less direct options such as manufacturers, agents, distributors, retailers; and more direct options such as your company website or an in-store purchase.
Promotion:
Techniques will vary dependant on your target audience, with online and offline techniques that you can get your business message across to your audience. The most important thing to think about is reaching your audience on the channels that they are already on, such as Facebook, or messaging on billboards in a particular area.
Business to Business Marketing
The main difference when marketing to a business and not to a consumer is that you will be marketing to a team of decision makers, rather than a singular consumer. B2B marketing can be categorised by the type of purchase, these main purchase categories are new-task purchase, modified re-buy, and straight re-buy.
For each purchase type the marketing mix will vary, this is because as the nature of purchases differ so will the marketing mix.
New tasks – These tend to have a complex decision-making process, mainly because it’s a new product that the company might not have much experience with and its likely to be a major process. Unless, it’s something like buying your stationary from a new supplier, which will probably be low risk.
Modified re-buys – Provided that the previous product met the expectations, then this style of purchase will be fairly straightforward as the customer knows what they want, whether this is the same as before, or a similar product with a newer modification. In this case, personal selling with personalised negotiations works really well.
Straight re-buys – When a business is buying a straight forward product, for example a standard product that is used in the manufacturing of their own product.
Product:
B2B companies need to make sure that their products have an advantage against their competitors, but the type of products that they are likely to be selling tend to be more complex. They might be more service based or mixed. As with more complex products, there will be an extra service such as technical advice and after sale training.
Price:
In B2B you will find that there is more leeway and negotiation when talking about price of the product/ service.
Place:
A lot of companies will buy directly from the supplier, this means that the distribution channel is much shorter than B2C. Key areas to think about here are transport arrangements, the storage of products, and inventory control.
Promotion:
The ‘buying unit’ within the customer organisation is often complex and B2B organisations will usually have a sales team that build a relationship with the key decisions makers and influencers, while catering the product to meet the customer’s needs. As the products/ services of a B2B company are more complicated, the advertising and promotion will also include a lot of educational content to teach the prospect about that particular area. Advertising is most likely going to be constricted by trade publications, the messaging of these ads normally takes a more logical approach rather than incorporating emotional messaging.
Small/ medium enterprise marketing
SME’s usually have less resources than larger companies, and with this, they might be limited in growth opportunities financially. Less resources will mean that they will take on a more hands on marketing approach and therefore have a more personal relationship with their customers. The decision-making chain is much shorter than what you would see in B2B, meaning better flexibility to cater for their customers specific needs. The distribution strategy will be simple, and promotion as it’s costly will be on an ‘all you can afford’ methodology.
Product:
SME’s key to success is about finding a niche in which they can differentiate themselves from larger competitors in the market. SME’s will take a flexible approach to new business when beginning to cater the product for customers.
Price:
A new SME might struggle to increase their pricing strategy as customers could question the reliability, or financial stability of a newly emerged product. A clear price structure that is based on the average price in the current market is how SME’s should begin.
Place:
Smaller enterprises tend to deal directly with the customer, it’s more personal but after a while new channels will develop and the selling with be less direct. SME’s need to consider the cost of different channels and how this cost might affect the overall price of the product.
Promotion:
Budget is often limited for SME’s promotion, and the approach is often what area of the business needs the most resources put in. You will see that SME’s will look for cheaper forms of promotion such as social media advertising, and steering clear of TV or radio ads. Digital media allow SME’s to reach a large audience geographically at a low cost, this is a better tactical approach for small businesses.
Not for profit/ third sector
Previously, marketing for not-for-profit companies was frowned upon, but today we see it in a different light. The single biggest difference between commercial marketing and third sector marketing is their objective. Businesses are looking to satisfy stakeholders, and not-for-profit organisations are looking to serve a different type of stakeholders.
Product:
There might be a physical product that third sector organisations create in order to raise funds, such as a small memento, in this case there could be marketing around this product. Usually not for profit organisations is marketing a particular campaign as a service.
Price:
Prices will remain the same, they might not even cover the actual cost that the organisation is paying but this will be part of the package, that say, the council is giving back to the community.
Place:
This is usually high street shops such as a charity shops. However, there is an online presence for these organisations where people can donate and sign-up via a website that might have been shared through a link in an email.
Promotion:
Not for profit organisations are very limited by their resources. As the decision makers within these charities and other not for profits will want to give the majority of their money to ‘the cause’. These organisations need to ensure that they give out the right message, and a lot of time will be spent to make sure that the message is appropriate.