Business-To-Business Market Research Explained

The business-to-business market differs in key areas from business-to-consumer research and requires a unique approach in terms of market research. DJS Research Ltd details the differences and the appropriate method for conducting research.

There are many differences between consumer and B2B markets. The differences do not necessarily lie in the products themselves, but in the way these products are exchanged, and the relationships which exist. In our experience, we find that business-to-business markets are characterised in the following ways:

Complexity of the purchase decision
The purchase decision is often complex (as the value of many purchases is often very high), and there are often many people involved – for example, research and development staff, purchasing staff, accountants, suppliers, external consultants. Seldom are decisions taken by individuals.

Derived Demand
All demand in B2B markets is derived from some kind of demand in a consumer market. For example, a chemical company may manufacture products which when added to cement, make it set more quickly. This will then be sold to cement companies, who will then sell their product to building companies, or individuals. Depending upon where you are in the value chain will determine how much contact you have with the end consumer, and your interactions with other members of the value chain. If there are any problems further up or down the value chain, this in turn can affect other members of the value chain in terms of ability to meet customer demand.

Less choice, or ability to switch supplier
When operating in a B2B market, if supply of a product is interrupted, it can be difficult to substitute or switch suppliers. There can be many reasons for this. The company may operate in a market where there are few alternatives available. Even if there are alternatives available, simply switching may have time and cost implications for the manufacture of goods.

Smaller customer base
B2B markets are often characterized by smaller numbers of customers. Often, companies may have hundreds, rather than thousands (or millions) of customers. A smaller customer base opens up many more opportunities in terms of relationship building and personal contacts.

Personal customer relationships
To sell goods, many companies personally visit their key customers, thus providing a chance for strong personal relationships to develop. Indeed, in many markets this is a key selling mechanism.

High value spend
Many transactions can be very large in value. In many markets, the Pareto rule applies – that 80% of value will be driven by 20% of customers.

Technical products
Products themselves can be technical in nature, with customers wanting very exact information about what the product is or is not capable of – for example, technical data sheets, technical performance data.

Differences in the ways in which product benefits are marketed
Many industrial companies do not have the marketing communications budgets of larger companies. Advertising campaigns are often smaller, targeted and based on opportunities to see, feel and touch the product itself – trade shows and word of mouth still play a vital role.

The differences in B2B markets can represent many challenges for the marketer. Here are some examples of questions that we have helped to answer in the past:

• Who makes the decision? Who can I target in my marketing communications?
• If products are fixed into the lifecycle of a plant, what would happen if I made changes to the product? Would people still use it?
• Our image is so tied up in our parent brand name. Now that we have been taken over and have lost the right to lose this, what will the impact be?
• What do my key accounts think of us? Are they satisfied with the service we provide them?
• How aware are people of the company brand and the individual product brands? How does this compare to other companies and products in the market?
• What do customers think are the key issues that the industry faces moving forwards, and how can we react to these changes and change our marketing approach to better meet needs?
• How can we stretch our brand? Which types of markets should the brands be extended to and which should they not?
• What do our customers expect from us? How does this compare to our actual performance?
• Are customers prepared to pay a price premium for anything in this market? How much can I charge?

Research Approach

Defining the problem
To ensure that the research collects data in the right area it is vital that we define the problem correctly. What are you trying to achieve, who are you trying to influence? How does the product work in terms of its technical attributes? Who are your key competitors? Many of our B2B clients do not have in-house research departments to help them to write a market research brief which outlines what you want to achieve from the research. In the absence of a brief, we can take on this role for you, and ensure that the research has clear objectives and provides you with answers to your key questions.

Upfront workshops
If you have multiple decision makers who are geographically dispersed, or are an organization for whom it is vital that everybody inputs into the process, we find that upfront workshops can help. These provide an opportunity to define the problem in more detail, and ensure that everybody involved is happy with the research going forwards.

Understanding technical products
A key question that we are often asked is ‘Our product is very technical, and we need to ensure that you know what you are talking about in front of our customers’. At the start of the research, we ensure that we ask the right questions to familiarize ourselves with your product.

Action Oriented Results
We never just leave you with a presentation filled with data that you have to interpret yourself, but will ensure that you are clear about what you have to do moving forwards. If needed, we can also conduct Back end workshops to help disseminate findings, or to discuss taking the results further.