Business To Business (B2B) Definition, Characteristics, Business Examples, and Strategies

The definition of business to business or B2B is a business transaction between business (company) and other business (company).

For example, cooperation between wholesalers and retailers. Business to business includes all businesses that produce goods or services to be offered to other companies.

B2B transactions occur because of demand, where one company bids for raw materials to be used in another company’s production process.

This business cooperation between companies is usually widely used in the automotive industry, property, maintenance and so on.

Come on, get to know business to business in more detail below.

What is B2B (Business To Business)?

B2B Definition, Characteristics, Business Examples, and Strategies
B2B Definition, Characteristics, Business Examples, and Strategies

B2B companies are parties that support or supply the operational needs of other companies to keep their business running.

Understanding B2B according to experts, Miletsky and Smith (2009), is a marketing business process in selling products and services to other companies. Because the goods traded are not consumer goods or finished goods, B2B business transactions are usually larger than B2C or C2B.

The difference between B2B and B2C or business to consumer is that B2C carries out transactions between companies directly to consumers. You could say B2C is an extension of business to business.

Another type of business is consumer to business or C2B where a business person offers his services to a company. For example, influencers who provide product reviews of certain brands.

In addition, a company supplies raw materials for a bakery, the two companies cooperate on a B2B basis. Bread factories process these raw materials to produce finished products ready for sale.

Well, this product is then sold directly to consumers, which means that B2C transactions have taken place, between the bakery company and its customers.

B2B companies clearly have a different target audience, because they are directly targeting companies that need a supply of raw materials for their production processes.

For example, the automotive industry or car factory, which in each product requires tires, batteries, and other components related to the production of the car.

The car factory will assemble all the supporting components until it becomes a complete car product that has a selling value.

That is, when you buy a car, you indirectly buy other components in the car, such as tires, rearview mirrors, car seats and so on. That way, sales with B2B transactions become very important in the sustainability of the industrial supply chain.

B2B Characteristics 

The other B2B characteristics are:

  • In the business to business concept, trading partners know each other and know information between them. Usually, business people have established long-standing relationships and exchange information on the basis of need.
  • Exchange of data and information in B2B transactions is carried out periodically in a mutually agreed format. So that the same service and standards will be created.
  • The business to business process takes a long time, is complicated and expensive because usually the bids submitted by B2B companies must go through several approval processes.
  • Generally, supply buyers will demand from the technical side only, for example the specifications and prices of new materials.
  • In B2B, it is possible to negotiate contracts to anticipate the quantity and price of raw materials to be supplied.
  • Establish a long-term relationship between business partners

Example of a B2B business 

Along with the development of the trading system, the B2B type of business is already well known among business people. In fact, currently there are many B2B business opportunities that you can take advantage of, especially in the e-commerce era like now.

Well, here are some types of B2B businesses that are in demand among business people:

Raw material supplier 

The need for supply of raw materials is currently quite high, especially among the production of ready-to-sell goods.

Usually raw material suppliers are the main choice because they offer wholesale or wholesale prices.

Automatically the price is very cheap. Industries with high demand for raw materials include the fashion and food and beverage industries.

Product marketing services

In this digital era, business people at least have to understand the digital marketing model. But in fact, not all companies have experts in this matter. One solution for that is to use marketing services.

For example, content marketing to social media marketing. By using product marketing services, it will indirectly form engagement while increasing business profits.

Web development

Again, in today’s digital era, it really demands that all lines understand the use of technology. One that has the opportunity to become a business to business business is web development so that the business can run effectively.

systematization of financial 

Currently, Indonesia has many start-up companies or startups. This condition was born from current technological advances.

Well, start-up companies are still adapting to the business climate in Indonesia. Therefore, it requires business financial optimization services which are quite complex. Especially with the many standards and rules that apply.

Strategy to develop B2B business 

When viewed from the side of the target audience, B2B businesses are very different in targeting their consumers. Therefore we need the right strategy to develop this B2B business. Here are tips to market your B2B business effectively and efficiently:

Make a specific target market plan 

B2B targets consumers who are different from other types of businesses such as B2C or C2B, because they focus more on business people. Although seen from the quantity, the target market for B2B is very small, but at the same time it is a distinct advantage. B2B target market is more specific.

Even though the target market is easy to identify, still do a target market plan by making a list of customer personas to determine the target market items and other specific things.

When you have specific data, you can determine what kind of promotions will be used to market your business.

Choosing an effective channel 

In order for your B2B business to run effectively, avoid using only one sales channel. Study the existing channels according to your business needs.

There are several sales channels that you can use, such as Google Adwords to present useful content for your business, for example by making videos of the products or services offered. Advertise with the right keywords.

Social media like Facebook, Twitter or Linkedin can be an effective sales channel. Choose social media that is suitable for your business to join many business communities to expand your network.

Collaborate through off air events with other parties to reach prospective targets. With good collaboration, it will indirectly have a positive impact on the sustainability of your business.

Build and maintain good communication with business partners 

In the B2B business, the transaction process is very long because it involves many parties to pass the cooperation application.

Even so, the value of B2B transactions is very large, so that if the customer is not satisfied, the collaboration can end. Reputation is at stake in this.

Therefore it is necessary to build and maintain good communication with clients or business partners. Building intense communication is one form of long-term investment for the sustainability of the business you are running.

Prioritizing client or customer satisfaction 

Make sure your marketing strategy covers all the client’s needs. Starting from product introduction to finally becoming a customer. It doesn’t stop there, as a businessman, marketing strategies continue to be carried out until finally the customer turns into a loyal customer for the product or service you sell.

Personally touch your customers by explaining how to use the product by doing email marketing. This strategy is done to ensure that these consumers will become loyal customers of your business.

Build networking to expand business network 

According to research, there are 45 percent of business to business that expand their network or network through groups and events.

This method is considered more popular and effective in expanding business networks.

The relationship between buyers and sellers in this business is very stable and can last for years compared to other business models.

By building networking, the opportunity to attract new customers or clients is wide open. Also make sure that communication with prospective clients is maintained personally so that it is easy to introduce the products or services you are selling.

Invest profits in the right instruments

It can be concluded that B2B is a collaboration between two companies that agree to transact business.

To be able to develop a business to business business, appropriate marketing strategies are needed such as determining the target market, choosing effective channels to introduce the products or services being sold, building and maintaining communication with customers, expanding networking, and prioritizing customer satisfaction.

From the business results, you will get profits that can be used for various business-related purposes. The net profit of the company should be saved and invested to get multiple profits.

But you as a company owner may not be sure which instrument to invest in.

Hopefully the information above can be useful for those of you who are running a B2B business.

Questions about B2B

What is B2B and an example?

The definition of business to business or B2B is a business transaction between business people and other business people.An example of B2B is cooperation between wholesalers and retailers. B2B business includes all businesses that produce goods or services to be offered to other companies.

What Are the Advantages of B2B?

One of the advantages of B2B is that the target market is very small but more specific. This of course will offer higher profits. Then, the relationship between buyers and sellers in this business is very stable and can even last for years compared to other business models.

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