Originally, business to business marketing started as a special case of marketing, heavily borrowing concepts and techniques from consumer marketing. Business to business marketing has evolved into a mature marketing discipline, with a distinct identity, separate from consumer marketing. The importance of business to business marketing is often underestimated. Successful application of business to business marketing concepts and methods requires insight into the characteristics of business to business market and how they shape business to business marketing approaches.

Business to business marketing is the marketing of products or services to companies, government bodies, institutions and other organizations that use them to produce their own products or services or sell them to other business to business customers. This definition of business to business marketing emphasizes the nature of business customers and the purpose for which B2B products are bought. B2B customers are organizations instead of consumers varying from small family operated local companies to large multinational conglomerates with several business units and gigantic purchasing budgets.

Business to Business customers can be classified into 3 groups – Commercial enterprises, Government agencies and institutions. Each of these 3 groups of Business to business customer has its own characteristics and should be approached differently by vendors. The diversity of B2B markets is also reflected in the broad range of B2B products, varying from office supplies, lubricants and electronic tools etc. Raw and processed materials: Raw materials are farm and natural products that are used by customers with little or no alterations, such as corn, wheat, milk, iron, natural gas and compressed air. Processed materials are raw materials that have undergone some sort of conversion.

B2B customers do not need products, but they do need the value offered by these products to produce their own products and services. Value is defined as the benefits minus costs that customers receive in exchange for the purchase price. Every customers will assess whether the net benefits offered by the vendor outweigh the purchase price that has to be paid to enjoy them. Thus, successful B2B marketing depends on a vendor’s detailed understanding of what customers value.