How the Type of Business You Have Impacts Marketing Decisions

Business Type

What type of business are you marketing? B2B (business-to-business), B2C (business-to-consumer) or a combination? Retail, Service, Consulting, E-Commerce, Advertising or a combination of a few of them? Different types of businesses have different goals, different strategies for growth and different marketing techniques.

Let us tell it to you straight: anyone claiming to have a fool-proof system or silver bullet approach for marketing success is making a false claim. There are many components to a successful marketing strategy that can help you with the goal of having an operational enterprise that generates enough funds to make a profit. In a marketing strategy, there are numerous tactics that can be implemented as well. Which tactics will work best depends largely on having a general understanding of the type of business you are marketing so you can better you can make better decisions and choices.

The objective in this exercise is to develop a general understanding of your business profile that can be used to help select the most fitting marketing tactics for your business.

retail store

If you own a retail store vs an online store, your marketing tactics will need to focus on being easily found online as well as physically.

  • B2B vs B2C
  • Retail vs Service
  • Types of Purchases
  • Business Entities
  • Additional Factors

NOTE: To simplify messaging, we may refer to a product or service as a product.

B2B vs B2C:

B2B: Business-to-business are commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Generally these transactions are larger due to the size and scope of the sales.

B2C: Business-to-consumer are businesses that sell products or provides services to end-user consumers. Generally the number of these transactions are higher.

Combo: 

A combination of B2B & B2C where a business sells to both businesses and consumers.

In Regards to Marketing:

B2B companies primarily need to market to other businesses and do not need to focus on marketing to the massive public audience. Marketing strategies can be very targeted and should directly communicate with the targeted business audience.

B2Cs companies do need to market to the public and have the challenge of getting name recognition established to their target audience. Although the target end-user is consumers, B2C companies may consider marketing to other businesses to establish strategic alliances or cross promotional efforts.

Retail vs Service:

Different types of businesses will have different types of ways they make sales and therefore may utilize different marketing strategies. (Types of Businesses not to be confused with Business Entities as noted below.*)

  • Retail
  • Service
  • Combo
  • E-Commerce – Selling a product online.
  • Other

Retail:

A place of business in which merchandise is sold primarily to consumers.

Examples of Retail:

  • Department stores
  • Grocery stores
  • Restaurants
  • Boutique shops

Pros:

  • Target Geographic Audience
  • Increased Personal Interaction
  • Make Profit of Goods Sold

Cons:

  • Limited Reach
  • Managing Inventory
  • Need People in Store

Service:

A business that sells a service that can be rendered for a monetary value.

This can be from industrial trades and medical services to financial or legal services.

Examples of Services:

Dental Practice

A growing dental practice should focus on marketing what makes their service unique.

  • Professional Services: CPA, Legal, Financial
  • Medical Services: Dentist, Surgeon, Chiropractor
  • Trade Services: Roofing, Painter, Construction
  • Hospitality

Pros:

  • Easier to Start
  • Increased Personal Interaction
  • Make Profit from Time Used to Render Services

Cons:

  • Limited Reach
  • Managing Inventory
  • Need People in Store

Types of Purchases:

  • Single Purchase
  • Rent
  • Subscription 

Business Entities:

A business entity is an entity that is formed and administered as per commercial law in order to engage in business activities, charitable work, or other activities allowable. Most often, business entities are formed to sell a product or a service. There are many types of business entities defined in the legal systems of various countries:

  • Sole Proprietor
  • LLC
  • C-Corporation
  • S-Corporation
  • Partnership
  • Trust
  • Cooperation
  • Non-profit organization

For more information on which business entity type you should consider, please visit: http://gillisway.com/basic-considerations-forming-new-business/

Additional Factors:

The following factors can also play a role in how you market your business:

Necessity vs Commodity vs Luxury

For products that are a necessity, your marketing challenges may be to generate awareness of your product and share a reason to select your product over the competition. Luxury items may need to be marketed in a way that helps to create a desire. People don’t need the items so you must create a want for the items.

Urgent vs Not Time Critical

Businesses that are time sensitive such as an emergency service such as emergency water extraction may need to be found when the need arises. For this example leveraging Pay Per Click advertising would most likely generate better results than say a an outdoor billboard or radio ad. While the billboard and radio ad may have exposure to a large audience, having your business show up when someone searches for your service in a search engine would most likely yield a better ROI.

Easy Entry vs Extended Entry

Some businesses may need to take little effort to earn business from customers. For example a Frozen Yogurt store in the food section of the mall needs to have a good product and presence and can get customers simply by being in a prime location for people who are looking for things to eat. People who are hungry don’t need a lot of education and persuasion to get someone to try the product. A taste sample, simple promotion and loyalty program may be all it takes to someone to be a repeat customer. The business may still need to advertise to generate awareness and visits to their location but they will not need to schedule consultations or send proposals to earn business.

A financial investment company on the other hand has a bigger challenge to earn someone’s business. They must earn someone’s trust before they can earn someone’s business due to the risk involved. If someone spends a few dollars trying a new brand of Frozen Yogurt, the decision has a short shelf life and little risk. If they don’t like the yogurt, they are out some cash and can discard the yogurt and be on their way. If someone get’s involved with a financial advisor that turns out to be bad, it could have devastating impacts that affect someone’s life for quite some time.

Quantity Focus vs Quality Focus

Some businesses are set up to profit by servicing the masses. An oil changing company’s focus would be to service as much of the market share as they could effectively handle. Sending out mailers to the local area may prove to be an effective marketing tactic.

A small law office may not have the time or resources to provide legal services to anybody with a legal challenge. They would be better off focusing on generating quality leads by developing a marketing plan that highlights the areas of practice they want to focus on while targeting their ideal demographic.

Discount vs High-End

Some businesses may position themselves to be the discount leader and compete on price. Wal-Mart and McDonalds for example compete on price. They get people’s business who are mostly concerned about saving money. They make their money on the quantity of people they service.

Other businesses may focus on the value or unique product or experience they provide. Macy’s and Ruth Chris aren’t known for their everyday low prices, however they are successful for the high-end experience and products they provide.

It can be tempting for businesses to consider competing on price but the decision should be fully evaluated before deciding it will work for your company. Competing on price can diminish your profits and lower the perceived value of your company. Many roofing companies are challenged with their competitors offering lower prices to get the business. If they lower their price too low, they may win business but not be profitable. Being known as the discount service provider they miss the more profitable opportunities from companies that are willing to pay more for a higher level of service.

Few Repeats vs Many Repeats

Businesses that have a small life cycle of their product have an advantage of repeat business. A customer of a coffee store may make a purchase hundreds of time in a year. A customer of a mattress store may get someone’s repeat business every few years. Both businesses should have strategies for keeping in contact with a customer but they may differ significantly. 

Put It Together to Create a Business Profile

While there are many more ways to categorize a business, our goal here is to create a basic business profile that can be used to make strategic marketing decisions.

Let’s look at a few examples.

Example: clothing store located in the downtown of a popular suburb that sold designer tee-shirts.

We can profile this business as:

  • B2C
  • Retail
  • Location
  • Single Purchase
  • Commodity
  • Not Time Critical
  • Quality Focus

Final Thoughts:

What type of business do you have and what characteristics does it have. Take a moment to write down your business profile and reflect on your current marketing efforts. Are they in line with your company. Is there room for improvement in selecting a strategy?

 

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