What is BtoB business? A simple explanation of the structural characteristics and the differences with BtoC
Posted: Wed Dec 04, 2024 7:01 am
When reading marketing articles, you will find only examples of BtoC companies such as Apple, Starbucks, Nike, and in Japan, Uniqlo. This may be because they are manufacturers that everyone knows, and because BtoC companies have spent a large budget on advertising in the first place, they have many marketing experts.
It is quite difficult to find public examples of BtoB. Of course, that doesn't mean they haven't been successful. There are many huge BtoB companies in the world. It is not uncommon for BtoB companies to have the world's largest market share in Japan .
Businessmen involved in BtoB business are proud of their work and feel motivated because of the scale of the transactions and the high level of social contribution. Despite this, it is not well known in society because it is not well known, and because it requires a high greece telegram phone number list level of specialization, it can feel like an outsider in a different market, even if it is the same BtoB, so it can be said that the BtoB market is one in which it is difficult to see the whole picture.
In this article, we will explain the structure of BtoB business, the differences between BtoB business and BtoC business, and the purchasing process of BtoB business.
What is BtoB business?
B2B business refers to business that targets corporations.
Generally, it refers to business between companies, but it is also interpreted to include business targeting non-profit organizations such as government agencies, educational institutions, medical corporations, and NGOs, so it is easier to understand it as "business between organizations."
More specifically, business with national and local governments falls into the " BtoG " category. However, in reality, it is often just one business of a BtoB company. National and local government projects have huge budgets invested in them, so they are also the main source of income for BtoB companies.
BtoB image (illustration box)
Industrial classification, medium classification, small classification
There are approximately 3.67 million companies in Japan . They are a very diverse group, including companies that sell raw materials and ingredients, companies that sell finished products, intermediary companies, and service industries. The Ministry of Internal Affairs and Communications' industrial classification divides the industry into 20 major categories, 99 medium categories, 530 small categories, and 1,460 fine categories.
In other words, Japan has a B2B market of 3.6 million companies across 1,460 industries. Globally, there is the International Standard Industrial Classification (ISIC) by the United Nations.
The customers of a B2B company may be other B2B companies or B2C companies. However, for example, B2B companies are also present in the supply chains of B2C companies such as automobile manufacturers, apparel manufacturers, and retail companies, and they support the consumer market by supplying various parts and raw materials.
Ministry of Internal Affairs and Communications Industrial Classification
(Source: Industry Code Table (Japan Standard Industrial Classification) | Mie Prefecture )
The difference between BtoB and BtoC businesses
BtoB and BtoC businesses have different structures. The position of potential customers, the size of the transaction, the time it takes to decide on a transaction, and purchasing criteria are all different.
BtoB Purchasing Criteria
Therefore, the key points for marketing and sales are different between B2B and B2C. B2B marketers must have a detailed understanding of B2B buyers.
Behavioral characteristics of buyers involved in B2B business
In B2C transactions, such as buying your own car or smartphone, there is no problem with buying something based on personal preference or desire.
However, purchasing managers in B2B businesses are purchasing for the organization. They are making purchases to improve the organization and to solve some organizational issues, so it is a purposeful purchase.
So, typically, buyers will:
Purchase when there is a problem or need
Eager to gather information
Select one company from multiple companies
Emphasis on cost-effectiveness
Consider from multiple angles
He is always careful to hedge his risks.
Going through a process called approval
Purchasing for work comes with great responsibility. Also, since it affects your evaluation, you probably don't want to make a mistake. When making a decision, the first thing to take priority is the essential requirements and functional requirements. Personal preferences and compatibility with the vendor's sales representative may also have an impact, but this is only after a certain level of standards have been met.
It is quite difficult to find public examples of BtoB. Of course, that doesn't mean they haven't been successful. There are many huge BtoB companies in the world. It is not uncommon for BtoB companies to have the world's largest market share in Japan .
Businessmen involved in BtoB business are proud of their work and feel motivated because of the scale of the transactions and the high level of social contribution. Despite this, it is not well known in society because it is not well known, and because it requires a high greece telegram phone number list level of specialization, it can feel like an outsider in a different market, even if it is the same BtoB, so it can be said that the BtoB market is one in which it is difficult to see the whole picture.
In this article, we will explain the structure of BtoB business, the differences between BtoB business and BtoC business, and the purchasing process of BtoB business.
What is BtoB business?
B2B business refers to business that targets corporations.
Generally, it refers to business between companies, but it is also interpreted to include business targeting non-profit organizations such as government agencies, educational institutions, medical corporations, and NGOs, so it is easier to understand it as "business between organizations."
More specifically, business with national and local governments falls into the " BtoG " category. However, in reality, it is often just one business of a BtoB company. National and local government projects have huge budgets invested in them, so they are also the main source of income for BtoB companies.
BtoB image (illustration box)
Industrial classification, medium classification, small classification
There are approximately 3.67 million companies in Japan . They are a very diverse group, including companies that sell raw materials and ingredients, companies that sell finished products, intermediary companies, and service industries. The Ministry of Internal Affairs and Communications' industrial classification divides the industry into 20 major categories, 99 medium categories, 530 small categories, and 1,460 fine categories.
In other words, Japan has a B2B market of 3.6 million companies across 1,460 industries. Globally, there is the International Standard Industrial Classification (ISIC) by the United Nations.
The customers of a B2B company may be other B2B companies or B2C companies. However, for example, B2B companies are also present in the supply chains of B2C companies such as automobile manufacturers, apparel manufacturers, and retail companies, and they support the consumer market by supplying various parts and raw materials.
Ministry of Internal Affairs and Communications Industrial Classification
(Source: Industry Code Table (Japan Standard Industrial Classification) | Mie Prefecture )
The difference between BtoB and BtoC businesses
BtoB and BtoC businesses have different structures. The position of potential customers, the size of the transaction, the time it takes to decide on a transaction, and purchasing criteria are all different.
BtoB Purchasing Criteria
Therefore, the key points for marketing and sales are different between B2B and B2C. B2B marketers must have a detailed understanding of B2B buyers.
Behavioral characteristics of buyers involved in B2B business
In B2C transactions, such as buying your own car or smartphone, there is no problem with buying something based on personal preference or desire.
However, purchasing managers in B2B businesses are purchasing for the organization. They are making purchases to improve the organization and to solve some organizational issues, so it is a purposeful purchase.
So, typically, buyers will:
Purchase when there is a problem or need
Eager to gather information
Select one company from multiple companies
Emphasis on cost-effectiveness
Consider from multiple angles
He is always careful to hedge his risks.
Going through a process called approval
Purchasing for work comes with great responsibility. Also, since it affects your evaluation, you probably don't want to make a mistake. When making a decision, the first thing to take priority is the essential requirements and functional requirements. Personal preferences and compatibility with the vendor's sales representative may also have an impact, but this is only after a certain level of standards have been met.