Organizational marketing can be defined as business to business marketing or B2B marketing. It means that the targeted customer of any organization would also be an organization rather than an individual. In simple words, it is important for the seller and the buyer to be an organization for marketing.
For instance, if you have an organization selling office goods, your target would be to convince another organization in need of office supplies in bulk. Rather than focusing on the individual’s needs, you focus on the whole organization’s needs.
In marketing, the lead time to close a business deal is more than convincing an individual because the goods are in bulk. Organizational marketing accounts for good earning potential.
According to Bain and Company, 81% of organizational marketing executives that organizational market segmentation is essential for crucial business growth.
Types of Organizational Marketing
The organizational marketing focuses on return on investment, corporate goals and technical suitability rather than perceived values, fads styles.
There are three main types:
- Producer marketing
- Reseller marketing
- Institutional marketing
- Producer Marketing
Producer marketing is convincing the producers and organizations to buy raw materials and machinery. Producer marketing requires special knowledge and expertise of producer’s organizations and operations.
A typical producer marketing’s plans and strategies include determining the problems arising in the producer’s organization, in the company’s proposing solutions and operations.
Marketing to producing organizations is usually based on long-term relationships because their needs change slowly.
The most crucial part of reseller marketing is to be well-aware of their (AVP) or added-value proposition. For instance, is the reseller company is a wholesale store offering very low prices for bulk items, then the reseller marketers should drop proposals according to their needs and characteristics.
The reseller marketing will be completely different if an organization buys equipment and resells it to its consumers in top-notch quality.
Institutional marketing refers to convincing non-profit and government organizations and companies for long-term business relationships.
The purchasing operations for are the government and non-profit organizations are highly bureaucratic. The government institutions exist for providing benefits to their consumers rather than improving the economy. So, the marketers should drop their proposals keeping this in mind.
Characteristics of organizational marketing include:
- Derived demand
- Geographical concentration
- Few buyers and a large volume of goods
- Direct Channel of distribution
- Rational Buying
- Professional Buying
These characteristics are important for marketing in providing relevant products in their proposal. For instance, geographic segmentation creates customers based on geographical locations. Whereas, psychological segmentation includes considering the psychological aspects of consumer behavior.
Organizational marketing is critical for a business’s growth and success if the company specializes in selling the goods to other organizations in large volumes.
5 Reasons Organizational Marketing is Critical for Business Success
Provides Value of Core Product
The individuals might know about the services and products being offered by the business, but other businesses might know about your existence. Hence, they are not informed about your core value and objective of the product.
If you want to have a long-term relationship with another business for selling goods in large volumes, then it’s important for them to know about the usage details and the core values of your product.
Organizational marketing helps to create brand and product awareness and relates somewhat to informative advertisements.
Helps to Understand Other Organization’s Needs
Market research is crucial if you want your business to grow. During the first product’s life cycle, market research and segmentation is based on behavior, geographic location, the channel of distribution, rational buying, Derived demand and complexity.
Once these segments have been identified through organizational marketing, it will help the organizational marketers to understand other organization’s requirements and needs. The product that an organization would need in bulk would be positioned accordingly.
Boosts Bulk Orders
By informative and organizational marketing, more companies and organizations can be persuaded to build a long-term business relationship with you. There are many mediums, channels and ways through which you can attract other businesses, such as direct marketing and word of mouth.
Hence, marketing boosts bulk orders, sales and impacts the profitability positively.
Engages with other Organizations
Institutional marketing, product marketing, and reseller marketing is not common in the marketing industry and the organizational markets.
However, effective organizational marketing helps you to engage with other organizations that are not aware of your product or brand.
Gives You Healthy Competition
Usually, organization markets have bulk orders in high volume at very low prices. This usually increases the competition between organizations offering their products in bulk.
Organizational marketing can help other organizations to acknowledge you. You let the businesses know that you are in the market.
For the given reasons, you can clearly see how organizational marketing is crucial to a business for its growth. In fact, marketing is important in building a business reputation and creating long-term business relationships with other organizations.