Business-to-Business Concepts and

Examples

What does 'Business To Business - B To B' mean

Business to business (B To B) is a type of commerce transaction that
exists between businesses, such as those involving a manufacturer and
wholesaler, or a wholesaler and a retailer. Business to business refers to
business that is conducted between companies, rather than between a
company and individual consumers. This is in contrast to business to
consumer (B2C) and business to government (B2G). A typical supply
chain involves multiple business to business transactions, as companies
purchase components and other raw materials for use in its
manufacturing processes. The finished product can then be sold to
individuals via business to consumer transactions.
BREAKING DOWN 'Business To Business - B To B'
An example that illustrates the business to business concept is
automobile manufacturing. Many of a vehicle's components are
manufactured independently and the auto manufacturer must purchase
these parts separately. For instance, the tires, batteries, electronics, hoses
and door locks may be manufactured elsewhere and sold directly to the
automobile manufacturer.
In the context of communication, business to business refers to methods
by which employees from different companies can connect with one
another, such as through social media. This type of communication
between the employees of two or more companies is called B2B
communication.

Business-to-business refers to transactions that take place between

companies rather than between companies and individual consumers.
Many companies cater to providing products or services to other
businesses and never deal with end consumers. Marketing, strategy and
other business concepts are somewhat different for business-to-business
product and service providers than they are for firms that provide for
consumers directly.

Derived Demand

Business-to-business, called B2B, marketing is an important concept

for firms operating in the B2B marketplace. The business you are selling
your product or service to will likely resell a related product or service to
another customer; therefore, they will be concerned about costs and
value that they can pass along to consumers. For this reason, marketing
strategies should be focused on how your product or service benefits the
customer further down the distribution chain. B2B firms should consider
this concept of derived demand when marketing their products and
services to other companies. For example, a company selling rubber to a
shoe manufacturer needs to have some awareness of the type of shoe
that end consumers want, so they can provide materials of a quality that
customers will expect when they buy the shoe.

Segmentation

Since market sizes tend to be smaller in the B2B space,

segmentation can be a challenge. Dividing the total market into smaller
segments by company size or by geography, for example, can be a logical
way to start categorizing your business clients. Make sure the segments
are not so small that marketing costs will not generate a good return. In
addition, it is important to consider the needs of the companies in each
segment and then formulating a strategy to target each segment
separately.

Branding

Building loyalty is an important part of sustaining strong businessto-business client relationships, and strong branding can help create that
loyalty. A good brand conveys the messages you want your customer to
hear, and just like business-to-consumer branding, an attractive and
easily recognizable brand can bring new customers to your business who
will remain loyal if your company delivers on its brand promise. For
example, a company that buys coffee to serve its employees may remain
loyal to a particular brand even if lesser known brands have lower prices,
because the brand's promise of quality has been delivered over and over
again. A brand also helps to position a company among its competitors
and set it apart from other companies offering similar services to other
businesses.

General Strategy

B2B companies need to consider all of the factors that may affect
their customers' decisions. For example, a company might consider
buying a substitute product from another firm if the price is lower for
similar quality or if consumers start demanding slightly different product
offerings. In the B2B space, it can be more difficult to determine what will
make a customer switch product or service providers because the factors
affecting decision making may occur much further down the distribution
chain. Therefore, B2B product and service providers must be especially
knowledgeable about their market segments and be able to anticipate
their needs.

How to Foster Effective Communication among

Employers & Employees
Strong communications in a company among employers and employees fosters
innovation, improves employee morale and helps avert future business problems.
Employees who receive routine, solid information from employers understand the
direction of the company and can make more informed choices during their day-today routines. Employers who empower employees to communicate above their
company rank obtain better, real-time information on effective business practices
and warnings of potential problems that can be avoided with early intervention.
Demonstrate open communication during potential employee interviews.
Offer candid information on the employee work requirements and the
company's desire to have open, routine dialogue between employers and
employees. Incorporate interviews with multiple layers of management and
staff to ensure new hires are a good fit and allow interviewees the
opportunity to ask pertinent question to all levels of employees. This
interview strategy will lure employees who thrive an in an open
communications environment.
Conduct routine company meetings on a monthly or quarterly basis. Schedule
meetings when the majority of employees can attend. Offer information on
company performance, new initiatives and areas that need attention. Use the
meetings as a platform for open dialogue and questions between employers,
management and staff.
Establish a news and information system for daily or as-needed updates. This
system should offer encouragement as well as practical information to assist
employees with their work. Informed employees strengthen employer-toemployee communication.
Publish contact information for all employers that all employees can access.
Encourage employees to contact the appropriate employer with ideas,
suggestions and concerns. This method will improve employee-to-employer
communication.
Promote casual conversations between employers and employees. Have
employers routinely walk around in common employee work and lounge
areas and initiate conversations and welcome employee-led conversations.
This openness lowers the perceived distance between ranks and fosters an
environment of mutual respect and open communication.
Maintain open dialogue during crisis situations. Uncertainty and stress can
undermine recovery from a business crisis. Offer face-to-face

communications and honesty during stressful periods to gain employee trust

and foster communication that can help alleviate current problems and
improve long-term company-wide communications

How to Communicate With Employees

Good staff communication is essential to business success. At the most basic level,
employees who don't know what's expected of them seldom perform to their
potential. "You can tie back almost every employee issue -- attendance, morale,
performance, and productivity -- to communication," says Fred Holloway, an HR
adviser in Medford, Oregon. According to a study by the consultants Watson Wyatt
(now Towers Watson), companies that communicate effectively are far more likely
than companies that don't to report high levels of "employee engagement" and
lower levels of turnover. The bottom line for these effective communicators,
according to the study: a market premium of nearly 20 percent.
And yet, human nature being what it is, workplace communication is rarely
adequate -- and could almost always be better. The good news is that you don't
have to be an extrovert, or even particularly nurturing, to foster healthy
communication at your company. You simply need the will to improve it. Mostly, you
need to be honest, show respect to employees, and work on building trust, without
which employees tend to put up a filter and what you say doesn't matter.

The guide that follows introduces habits and practices that

engender good communication, and offers tips on conveying your
message effectively.

Communicating Better
1. Create the Culture
Above all else, to the extent possible, strive to be transparent and straightforward
about the challenges of your business and even about your company's financials.
Such candor fosters trust and understanding. "Your employees know you make more
money than they do," says Bloomington, Illinois, HR consultant Rick Galbreath.
"What they don't understand is that you take more risk. They won't be able to
understand the risk until they understand the business."

Schedule informal communication. The simplest way to put yourself (and your
managers) in the mindset to communicate, says Galbreath, is to put it on your
calendar. In addition to the scheduled activities below, he recommends spending 15
minutes each day, more if you can spare it, on "nontransactional conversation" with
underlings. By nontransactional, Galbreath means exchanges that don't have a
specific purpose, like a request to do something.
Meet one on one. Informal confabs with the people who report to you, held at least
biweekly, serve as excellent occasions to check on their progress as well as identify
problems before they blister, and so can be a powerful motivational tool. Galbreath
also recommends occasional (once or twice a year) skip-level meetings with
individual employees two or more levels down. Besides making sure the boss is not
isolated at the top, skip-level meetings are a morale booster. "People are very
complimented that a boss two levels up wants to talk with them," says Galbreath.
"They're often turned into retention interviews."
Meet in groups. A brief team huddle at the start of the day or the shift is a good way
to discuss the goals, challenges, or operating plan for the day. A huddle should be
just that, conducted standing in an open space; it should not last more than 10 or
15 minutes. (Pass-down memos, stored in a network folder, can be used to report
the events of one shift to the next.) Then, every quarter, a large-group or
companywide meeting can serve as a sort of state-of-the-business update, says
Galbreath.
The meeting should last about an hour and include a question-and-answer session.
If the company culture discourages searching questions, they can be submitted
anonymously in advance, says Galbreath. Finally, occasional "lunch and learn"
gatherings are good for a less formal discussion of the company, for introducing
new products and strategies, or for most any other ancillary subject you want to
broach. (They are not places to discuss essential topics or conduct core training.)
2. Make Sure Your Message is Heard
The ways in which you communicate can often be just as important as the
substance of that communication. We address the right medium in the section "In
Person or in Writing?"; here are a few other strategies for getting your point across.
Evaluate your own abilities. By merely being aware, you can play to your strengths
and mitigate weaknesses. Sometimes a single trait can encompass both strengths
and weaknesses, says Elaine Tweedy, director of the University of Scranton Small
Business Development Center. A dominant, confident individual, for example, can
probably run a good meeting and offer his own opinions while keeping people
focused. On the other hand, someone who is too dominant might discourage
creative input from others. Personality assessments, such as the Myers-Briggs Type
Indicator and the DISC evaluation, can help managers get a handle on their own
strengths and weaknesses. These evaluations are often best done in groups so the

contrast between types is vivid and the team develops strategies to work more
effectively.
Sharpen your message. According to research cited by the Society for Human
Resource Management, people normally remember only three to five points from
any communication. So keep it short and sharp. This is especially true if your
message is being delivered by e-mail or memo. Your conclusions or main points
belong at the top as bullet points. An elaborate setup is counterproductive, says
Galbreath; readers discern condescension when a big setup attempts to spin bad
news, and when one introduces good news, they stop reading before they get to it.
Keep the paragraphs short and the whole document to no more than a page. "If
someone taped a $20 bill to the second page of every memo in America," says
Galbreath, "nobody would ever find one."
If forced to go long during a meeting, Galbreath tries to keep his audience engaged
with a compelling moment every few minutes. "I'm going to give them a giggle, or
an 'aha,' or something that is going to engage them at a deeper level than just
listening," he says.
Recognize good work. If your message is always negative, it won't be heard.
Balance criticism with compliments. Do this two ways: Thank employees personally
for their efforts, and hold up their behavior as an example to the organization.
Prepare for meetings. Whether your meeting is one on one or in a group, plan what
you are going to say and how you will say it. It's important to tailor the delivery to
its audience, says Tweedy. "If I brought in an employee who likes direction and
formality, and if I presented none of that, they would take my communication as
less valid, because it's not what they're accustomed to."
Understand unspoken signals. Body language, for example, can undermine a
spoken message. Slouch while disciplining a staff member, for instance, and your
demeanor might be read as uncertainty -- or as a lack of interest in the problem you
are trying to fix. Even where you hold the meeting can be suggestive: Calling an
underling into your office, for example, emphasizes your hierarchical advantage and
could affect the dynamics of your conversation; visiting an employee in his office,
on the other hand, emphasizes collegiality and could result in more open discussion.
Follow up. When a message needs reinforcement, follow up afterward with a memo
or note that recapitulates the conversation.

Listening to Your Employees

Successful communication is a two-way street. If management is doing all the
talking, employees tend to tune out. What's more, the people doing the real work of

the company often have the best suggestions for improving it and are often the first
to see danger approaching.

Create formal feedback mechanisms. Establish a mechanism for input, such as

a suggestion box or a hotline. Ensure anonymity if necessary.

Take input seriously. Otherwise, employees will see through the window dressing,
which can actually make things worse. "Just because someone gives you a
suggestion doesn't mean you have to implement it," says Patricia Veesart, a
regional director of the Kansas Small Business Development Center. "But if you
don't, you ought to offer some kind of explanation."

Check management attitude. Employees will keep quiet if they perceive that the
company culture and management discourage, if even subtly, risk taking, or show
downright hostility to questions. According to one recent study, if employees don't
think company managers and their policies are fair, all the staff feedback in the
world won't create a good employer-employee relationship.

Reward feedback. According to researchers from the Harvard Business Review,

employees have difficulty weighing the immediate risks of speaking up against the
uncertainty of being recognized and rewarded for the contribution. Managers, they
suggest, might "tailor their reward systems so that employees share more directly
in the cost savings or revenue streams they help create by volunteering ideas."

In Person or in Writing?
Choosing the medium for a message depends on your office culture. E-mail is
increasingly acceptable, even for conveying important information. But there are
exceptions. As a general rule, anything that requires development of an
interpersonal relationship with an employee requires face-to-face communication.
That includes first-time instruction, coaching, counseling, significant delegation,
conflict resolution, and, especially, delivering bad news.

Urgent matters, too, are best handled in person. Written messages are often read
with divided attention or even ignored for a while; to ensure full and immediate
focus on a matter, deliver the message orally.

Finally, recognize that words on a page or screen lack the context, tone, and
nonverbal cues that help people understand your meaning in person. When in
doubt, talk face to face.

Definition - What does Business-to-Government (B2G) mean?

Business-to-government (B2G) is a business model that refers to businesses selling

products, services or information to governments or government agencies.

B2G networks or models provide a way for businesses to bid on government

projects or products that governments might purchase or need for their
organizations. This can encompass public sector organizations that propose the
bids. B2G activities are increasingly being conducted via the Internet through realtime bidding.

B2G is also referred to as public sector marketing.

Techopedia explains Business-to-Government (B2G)

Governments are contained within the federal, state and local arenas. Governments
typically work with prenegotiated contracts and they've usually vetted out
contractors they've used before or for whom there are standing contracts that might
be grandfathered in. Types of B2G techniques called integrated marketing
communications encompass Web-based communications as well as strategic public
relations and electronic marketing.

Government bids are solicitations that originate from businesses that have
something a government needs. The solicitations may be in the form of reverse
auctions where sellers are competing to obtain business. The American Recovery
and Reinvestment Act of 2009 has spurned the use of B2G.

Social platforms such as LinkedIn, Facebook and Twitter can be part of this vertical
market, although businesses largely neglect this form of B2G selling. Businesses can
provide documents such as a "Statement of Capabilities" which outlines the
abilities, products and services of a company that wishes to contract with
government agencies. This document will frequently accompany a "Proposal of
Service" that can be supplied when submitting contract bids

Business Responsibilities to Government

The primary responsibility of a business, according to economist Milton Friedman, is
to its investors -- the people who have put up their own money in an effort to help it
succeed. Yet businesses must also abide by the laws of the countries in which they
operate, making them responsible to the respective governments in several areas.
Pay Taxes
Businesses must pay taxes and fees to the government in the course of carrying out
their operations. These can include taxes on revenues, tariffs on imported products,
and a number of administrative fees necessary to register the business. Withholding
these payments, particularly taxes, is considered a crime.
Follow Environmental Regulations
Many companies, particularly those in the industrial and manufacturing sectors,
face heavy regulations regarding the number and variety of pollutants that they are
allowed to emit. Some companies, feeling a "social responsibility" toward the
common good, may seek to limit their pollution more than the law requires.
Abide By Labor Laws
Businesses that hire employees in the United States must abide by a slew of laws
relating to how they treat their employees. These include laws related to how much
an employee can be paid, how many hours he may work and the criteria under
which he can be hired and fired.
Avoid Restrictive Trade Practices
Companies are forbidden from engaging in certain kinds of restrictive trade
practices that limit competition. For example, most companies may not develop
monopolies within a particular sector or provide substantial barriers for new
companies to compete with them. Restrictive trade practices of this kind can often
reduce the quality of products available to consumers and drive up prices.
Financial Disclosure
Companies must disclose a number of financial statements to the government in
the form of tax returns, and, if the company makes ownership of shares of stock
commonly available, to the public as well. This financial transparency helps to
ensure that the company is not violating any laws, such as withholding taxes, and to
aid the public in deciding whether to invest in the company.
Avoid Corruption
Businesses in most nations are also forbidden from bribing public officials, which
would subvert their ability to carry out their jobs impartially in the interest of the
country's citizens. In the United States, companies are forbidden from offering
brides to domestic officials and, according to the Foreign Corrupt Practices Act, to
members of the government of another country.