Managing Services for Business Markets

Hutt and Speh (2013, p. 4) observe that: ‘Business marketers serve the largest market of all; the dollar volume of transactions in the industrial or business market significantly exceeds that of the ultimate consumer market.’ Having amassed extensive experience as a business-to-business (B2B) marketing practitioner and, more recently, as an academic, I frequently encounter inquiries regarding the characteristics of business markets. Common questions include:

  • How do business markets (B2B) differ from consumer markets (B2C)?
  • In what ways are the two markets similar?
  • Which promotional elements are most effective in B2B markets?
  • How should B2B markets be segmented?
  • What unique challenges exist for marketing B2B services?
  • How does the purchasing process differ for B2B markets?

The following discussion offers a fundamental examination of B2B markets and marketing, aiming to provide an overview and foundational understanding of the core drivers within the B2B domain.

Our Managing Director, Michael Cherry, has maintained a longstanding interest in service marketing within the business-to-business (B2B) context. This interest stems from his numerous years in the industry, where he investigated and implemented effective differentiation strategies for business markets, as well as through his university teaching endeavours in this field.

In today's market, very few businesses would claim to have an exclusively product-based offering. Even those primarily focused on products typically incorporate a service component, such as a website or perhaps a freephone number. Consequently, it is prudent to enhance our understanding of effective service management for business markets. If your enterprise possesses a significant service component, it is crucial to ensure that you are explicit, consistent, and effective in developing the service elements of your marketing mix.

The Spring 2014 edition of RAFFREYinsight delves into this critical subject, drawing on frameworks from Business Marketing Management (11th Edition) by Michael D. Hutt and Thomas W. Speh.

The concept of value, as ascertained by the customer or client, has transcended beyond the essential functional attributes of the core product offering, with services playing a pivotal role in shaping the overall customer experience. Hutt & Speh (2013, p. 225-229) advocate for the formulation of a life cycle map to capture all the touchpoints or instances of truth when a customer interacts with a business. These interactions could include the following generic encounters:

  • Relationship initiation
  • Provider evaluation
  • Account setup
  • Order placement
  • Product/service reception and usage
  • Problem resolution
  • Payment
  • Account maintenance

Consider your own business and the efficacy with which you manage each of these interactions. How many of these interactions are left to chance or are potentially highly variable?

The significance of robust relationships within the business-to-business (B2B) setting cannot be overstated. Hutt & Speh (2013, p. 229-230) highlight that effective customer solutions can only be attained through:

  • A comprehensive definition of customer requirements and business needs
  • Tailoring and incorporating products and services to satisfy the customer's demands
  • Implementation and installation within the customer's environment
  • Provision of continuous customer support

At the heart of this strategy lies a crystal-clear understanding of the customer to serve. For more information on this subject, please refer to Raffrey Insight Summer 2013/2014, Choosing Business Customers.

The disparities between products and services are inherent in the difficulties encountered when crafting an efficient business-to-business (B2B) marketing mix. Hutt & Speh (2013, p. 234-238) enumerate these differences/challenges as follows:

  • Tangibility or intangibility?
  • Simultaneous production and consumption
  • Variability
  • Perishability
  • Non-ownership

Businesses frequently fail to comprehend these issues, resulting in significant discrepancies in the aforementioned customer experience. Once more, it is crucial to consider the consequences for your own enterprise.

Clearly, the quality standards will ultimately be determined and established by our clients. Hutt & Speh (2013, p. 238-240) outline the following headings that address the diverse aspects of service quality that your business needs to comprehend and proficiently deliver:

  • Reliability
  • Responsiveness
  • Assurance
  • Empathy
  • Tangibles

The preceding paragraphs are intended to stimulate reflection when contemplating the service elements (whether explicit or implicit) of your business's marketing mix. How thoroughly do you comprehend these elements? How effectively do you supervise and manage their implementation? To what extent is it left to chance, and are you at ease with this?

  • Hutt, M.D., & Speh, W. (2013). Business Marketing Management: B2B (11th edition). Mason, Ohio: South-Western Cengage Learning.
  • Raffrey Consulting. (2014). Choosing Business Customers. RAFFREYinsight, Summer 2013/2014.
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