B2B Market Research

Business-To-Business Market Research Explained, By Sharon Nichols, From DJS Research Ltd

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...