This theme is common to many introductory marketing texts and degree courses. Two exceptions to this proposition are the buying behavior models between consumers and business buyers, as well as the extended ingredients of the services marketing mix. While marketing principles generally apply to different products and markets, there may be more noticeable differences than previously thought. This raises the question of whether marketers should make broad generalizations about the nature and characteristics of marketing. By focusing on the variations between consumer goods, services, industrial, and business-to-business marketing, are we neglecting important nuances? Perhaps in the new millennium, textbooks and marketing courses should consider a different perspective.
Content Indicators: readability, Practice implications, originality, Research Implications
Marketing is marketing, regardless of the product or marketplace. This theme is often discussed in introductory marketing texts and courses. However, there are two exceptions that are commonly mentioned: the buying behavior models for consumers and business buyers, and the additional factors that make up the services marketing mix. While the overall principles of marketing apply universally, perhaps the variations are more significant? The marketers of services were the first to raise this point, arguing that the nature of marketing is different due to the fundamental characteristics of services: a direct relationship between the organization and the client; consumer involvement in the production process; and
The marketing mix for services marketers has expanded beyond the traditional 4Ps (product, price, place, and promotion) to include people, physical evidence (ambience), and process. These marketers emphasize the unique characteristics of services, such as the intangibility of the service itself, which limits opportunities for creating a competitive advantage. As a result, differentiation and gaining a competitive edge rely heavily on branding initiatives and personnel.
While services marketers have emphasized the differences in “their marketing,” overall, texts and marketers have argued that there are only minor distinctions between the marketing of consumer goods and industrial or business-to-business goods. This paper aims to stimulate discussion regarding the extent to which marketers can make generalizations when discussing the nature and characteristics of industrial, business-to-business marketing. Should we continue to provide students and in-company training programs with generalizations that apply to the entire marketing field? By focusing on the variations between consumer goods, services, industrial, and business-to-business marketing, are we neglecting the essential nuances? As the new millennium begins, should textbooks and marketing courses concentrate on a different perspective?
As the co-author of Marketing: Concepts & Strategies, one of the leading introductory marketing texts, and with experience as a regular lecturer in MBA programs, undergraduate courses, and in-company sessions, as well as a marketing consultant, I have become increasingly concerned about these themes when preparing seminar papers and lecturing. Drawing from years of research and work with consumer brands, services, and industrial products, I offer a personal perspective on the differences in industrial marketing. However, is marketing in industrial markets truly different? From conducting basic marketing analyses to making target market strategy decisions and implementing tactical marketing mix programs and controls, there are significant variations in the challenges faced and approaches taken between consumer and industrial marketing.
(Figure 1) Consumer versus business-to-business buying showcases the prevailing buying behavior models for consumer and business-to-business markets. It highlights the presence of an additional specification stage in business-to-business purchasing, along with distinct influencing forces. These differences are well-documented by researchers like Assael (1997) and Ford (1997). Various other factors, such as the role of the buying center and consumer peers, risk assessment, formality of buying, and the nature of selling, contribute to the variations observed. Despite some variations, there is general consensus among marketers regarding the substantial disparities in consumer and business purchasing patterns.
Consumer marketers are usually well-informed about their rivals’ brands and marketing strategies, possibly due to the prominence of these brands and the use of in-home media in consumer promotion. However, this awareness is often superficial. On the other hand, industrial markets face more challenges in acquiring competitive intelligence. Market researchers cannot easily conduct surveys of rival management teams, resulting in many businesses having only limited knowledge of their competitors’ intentions. In fact, many managers are so focused on staying updated with product specifications and sales force activity within their own portfolios that they allocate minimal time to assessing competitive forces.
Conducting business-to-business surveys is known to be challenging due to several factors. Busy managers often do not want to participate in discussion groups or fill out questionnaires, considering it a waste of time. Additionally, the incentives offered are usually not as attractive as those in consumer research. Confidentiality concerns further hinder the process. Although such marketing research does take place in business markets, it is not as common or easy as in consumer markets. Moreover, the utilization of in-depth qualitative techniques, which are highly favored by marketers of consumer goods, is not as extensive in this context.
Market segmentation, a crucial aspect of marketing, is widely used by practitioners in all markets. However, there is a notable diversity in the variables employed to define the segments. Although (Table 1) Segmentation variables provides a comprehensive list of variables, many industrial market segmentation schemes merely rely on conventional industrial sectors or internal product groupings, which are far removed from the customer need and attitude segments embraced by consumer marketers. In some instances, customer grouping analysis is erroneously replaced by the use of standard industrial classification coding or trade directory membership lists.
Branding serves mainly to identify and differentiate products, easing the task of distinguishing them. Consumer branding carries a significant psychological element, as many consumers, especially those of supermarket items, demonstrate strong loyalty to their preferred brands. While this holds true in certain industrial markets, numerous products lack the substantial and long-lasting unique positioning concept and emotional marketing communication campaigns ingrained in consumer brand building. Branding in the realm of business-to-business goods, particularly industrial products, tends to be less convincing and evocative than the vast majority of consumer brands.
McCarthy’s “4Ps” have been present in various marketing texts for approximately thirty years. These four elements, which include product, promotion, pricing and place (channels), are still widely used by most marketing practitioners as part of their tactical marketing strategy. In addition, servicing marketing has introduced three additional elements known as people, process, and physical evidence [2]. While it is commonly accepted that the core “4Ps” remain applicable in industrial marketing, there is a greater emphasis on customer service compared to consumer goods. This includes providing technical advice before a sale, ongoing customer support, and after-market operations. In industrial marketing, marketing channels tend to be shorter and utilize dealer networks or direct marketing. The sales force plays a central role in the promotional mix, while sales promotion is heavily used. Trade shows and direct marketing are popular methods, and advertising tends to be more technical and less emotional in nature.
The text states that pricing is different, as industrial buyers often negotiate or consider tenders instead of adhering to list prices. The importance of customer service and the management of people in the marketing mix comes from services marketing practices. While some older and more mature marketing departments may have exceptions, most industrial companies have a sales-oriented culture that lacks operational controls for effective marketing implementation. Marketing activity tends to be ad hoc, short-term, and tactical rather than focusing on long-term brand building or implementing longer-term marketing plan recommendations.
Although some marketers may see the differences between consumer and industrial marketing as insignificant, they are actually quite significant and fundamentally change how marketing is done. However, these differences do not change the essence and principles of marketing, as it is not a precise science with a singular definition or approach. The various definitions of marketing further exemplify this diversity: One definition states that the goal of marketing is to eliminate the need for selling. Another definition suggests that the goal is to have such a deep understanding of the customer that the product or service naturally aligns with their needs and sells itself (Peter Drucker, renowned management expert).
According to the UK’s Chartered Institute of Marketing, marketing is the management process that profitably identifies, anticipates, and satisfies customer requirements. The American Marketing Association defines marketing as individual and organizational activities that facilitate exchange relationships in a dynamic environment through the creation, servicing, distribution, promotion, and pricing of goods, services, and ideas. Despite these varying definitions, there are common themes in most explanations of marketing.
If a business pursues the right opportunities and properly probes customers, while targeting the right customers with a marketing proposition aimed at surpassing competitors, it is probable that customers will be satisfied, market share will increase in core target markets, and profitability will support a viable future. On the other hand, if a business creates a product or service that does not meet customer expectations and needs, is no different from competing offers, and ignores changing market conditions, the future of such an organization is unlikely to be prosperous. These sentiments apply to both consumer and industrial markets.
Marketing definitions mean very little unless businesses take the necessary steps to actually implement marketing. Textbooks outline a process that involves marketing analysis, strategy development, tactical implementation, and internal program oversight – known as the marketing process. Recent research shows that most large UK businesses now practice marketing, and they follow an analysis-strategy-programs approach when conducting market opportunity assessment, market segmentation/targeting, and marketing planning. This suggests a common understanding of marketing and the process it entails. In summary, marketing involves pursuing shared goals through activities such as conducting market analysis, making strategic decisions, creating tactical marketing programs, and implementing operational controls.
Are the apparent differences in buying behavior explanation, competitor understanding, marketing research activity, market segmentation bases, branding, marketing mix ingredients and internal operationalisation simply examples of marketing academics exaggerating perhaps only very minor variations in how marketing is perceived and utilized? Are there other, perhaps more fundamental differences between the activities of consumer and industrial marketers not mentioned in this overview? Is there a singular way to describe and characterize marketing? Do any differences seen in industrial marketing consist of subtle nuances or do they necessitate their own comprehensive explanation?
In essence, what are the key similarities and differences between traditional consumer marketing and business-to-business industrial marketing? According to this author, the conclusion is that “marketing is marketing” with shared goals, methods, and resources, regardless of the market in question. However, the viewpoint expressed here argues that the fundamental marketing strategies need to be tailored and adjusted more significantly to address the specific qualities of various industrial business-to-business products, target markets, and even marketing managers. What is your perspective on this matter?
References
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