B2B marketing, simply stated, includes all marketing activities conducted between organizations. Therefore, B2B marketing includes all activities and all types of commercial transactions that take place among the members (organizations) in the value chain of a company, from suppliers, to manufacturers, original equipment manufacturers (OEM’s), parts assemblers, logistics firms, advertising firms, wholesalers, retailers, financial institutions, government organizations, etc.

Business to consumer (B2C) marketing only takes place at the very last stage of the value chain .From the raw materials stage up until the retailer stage, all activities conducted between the entities are all B2B; only the activities involved between the retailer and the consumer are B2C.

When examining the types of markets, it can be seen that, in general, there are two main types of markets: consumer markets and business (organizational) markets. The consumer market is composed of individuals who buy products for their personal needs or for the needs of their household. The business market, on the other hand, is made up of organizations that buy products to use in manufacturing other products (for example, raw materials, components and parts), to resell to other organizations (for example, products sold to wholesalers and retailers) or to facilitate the activities conducted in the business itself (for example, press machines used in the factory, PC’s used in the offices).

When comparing B2B and B2C transactions, it should be noted that the difference does not stem from the product itself but from the ultimate user of the product.

B2B marketing may be defined simply as marketing activities that take place among businesses/organizations. One of the earliest definitions of B2B marketing was made by Webster11 stating that B2B marketing is “the marketing of goods and services to industrial and institutional customers”. Morris defines B2B marketing as “the performance of business activities that facilitate exchange processes between producers and organizational customers”. Stated differently, “B2B marketing is the management process responsible for the facilitation of exchange between producers of goods and services and their organizational customers.”

Consumers in a certain country are scattered all over its lands, but B2B buyers are in general concentrated in certain geographic areas. This is mainly due to the reason that B2B buyers are located close to the sources of raw materials or close to the market or close to cheap labor force, etc.

Perhaps the most important feature of B2B markets is derived demand. Derived demand means that the demand for a B2B product depends on the demand for the finished product in the B2C market.

The buying center “refers to the group of individuals that consists of all organizational members who are involved in any way, to any extent, in any phase of a specific buying decision.” In other words, the buying center is all the individuals or groups of people who contribute to the buying decision, who share a common goal and who also share all risks included in the buying process.

When a need exists in an organization, and a decision to purchase is going to be made, all people in the organization who are involved in this decision make up the buying center. It should be noted that the buying center is not the same as the purchasing department; it includes more than the purchasing department and is made up of people working in the organization who are in different departments and who work at different levels in the organization.

Six different roles exist in the buying center: initiators, users, influencers, deciders, buyers, gatekeepers.

Initiators – anyone in the organization that recognizes a need and requests a purchase. This need may be a product that is already being used, a modified version or a product that is entirely new.

Gatekeepers – the people who control access of information into the buying center and the sharing of information among the members in the buying center. Sometimes a gatekeeper may directly influence the final decision by not providing some critical information to the buying center.

B2B products may be classified into three basic and six sub-categories: entering goods (raw materials; manufactured materials and parts); foundation goods (installations; accessory equipment); and facilitating goods (supplies; services).

Foundation Goods – These products are used to make other products but they do not become part of the finished product. Foundation goods are capital items, and thus, when they get old and are worn out, they can be depreciated from expenses.

B2B purchase decisions may be classified into three different categories, from the most routine to the most risky: straight rebuy, modified rebuy and new task.

Straight re-buy situation is when the same product is brought from the same supplier. Straight rebuy involves routine problem solving decision making where the organization has purchased the product before, is satisfied with it, and therefore decides to buy the same product from the same supplier again when the need occurs.

Straight rebuy involves routine problem solving decision making where the organization has purchased the product before, is satisfied with it, and therefore decides to buy the same product from the same supplier again when the need occurs. This type of buying situation ordinarily occurs for products such as raw materials, materials and parts, office supplies and services. This type of buying situation carries the risk of being unaware that better options may exist since the buyer keeps on buying the same products from the same suppliers.

Modified rebuy situation is when a certain change occurs in the purchase process (ie. a change in the product or the supplier). Modified rebuy occurs when the buying organization requires some type of change in the purchasing process of a product. This change may be due to changing needs of the organization, dissatisfaction with the current product/supplier, modifications in the product/production process or just to look out for better alternatives.

New task situation is when the organization buys a certain product/ service for the first time. In a new task-buying situation, the purchasing problem is completely new to the organization; the organization has no prior experience with the product/purchase situation, and thus is in need of a big amount of information. This type of buying situation occurs in an organization very seldom.

When compared, the most risky type of buying situation is new task, the moderately risky type of buying situation is modified rebuy, and the least risky is straight rebuy situation.

Although there are many models specifying the stages of the B2B buying process, the best-known model is the Buygrid Framework developed by Robinson, Faris and Wind.

Product specification is a “precise statement of the specific characteristics and quantity required of some product or service.”