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Business-to-
Business Marketing
David Holdford, RPh, MS, PhD
Professor, School of Pharmacy
Virginia Commonwealth Universit...
Most pharmacists engage in
business-to-consumer
(B2C) marketing
But they also serve
businesses
And government
Business-to-business
markets (called B2B)
In B2B markets, both the seller
and buyer are businesses
Examples of B2B
Wholesalers serve pharmacies, MD offices,
hospitals, & other health care businesses
Pharmacies serve pharm...
Business-to-government
markets (called B2G)
In business-to-government
marketing, the buyers are local,
state, or federal g...
Examples of B2G
Business services provided to:
Medicare,
Medicaid,
Veterans Administration, or
Department of Defense
DIFFERENCES IN
B2C VERSUS B2B
MARKETING
10
Seller
Buyer
Buyer
Buyer
One Seller, Many Buyers
(e.g., Pharmaceutical Company
Selling to Retail Pharmacies)
Seller
Sel...
Typical Channels for Drugs
11
Pharmaceutical
Company
Wholesaler
Pharmacy
Patient
Pharmaceutical
Company
Patient
Pharmaceut...
Typical Channels for Drugs
12
Pharmaceutical
Company
Wholesaler
Pharmacy
Patient
Pharmaceutical
Company
Patient
Pharmaceut...
BUSINESSES AND
INDIVIDUAL CONSUMERS
USE DIFFERENT
PURCHASE PROCESSES
B2B decisions about purchases
are made by people who are held
accountable by the business
Decision makers may be detached ...
Still, they are human beings
And human beings have feelings, emotions,
biases, worries, & concerns like everyone
Addressin...
THE B2B DECISION IS
OFTEN COMPLEX
B2B purchases generally
consist of a systematic assessment of
alternatives and
take many months or years to complete,
part...
B2B purchases may include
a request for proposals (RFP),
submission & analysis of proposals, and
a negotiation of final te...
THE SOLUTION BEING
OFFERED IS OF
HIGH VALUE
The complexity of the decision and the
solution to the problem usually results in a
large price tag for the product or ser...
THERE ARE
MANY DECISION MAKERS
Big decisions are made by many
people serving multiple roles
Procurers: people who deals with the nuts and bolts of
the pu...
People may serve one or
many overlapping roles
It is important to identify
individuals and their
respective roles prior to...
B2B IS ABOUT
PERSONAL RELATIONSHIPS
BETWEEN PEOPLE
B2B marketing is built on human
interactions
Those interactions identify
needs and tailor
communications to those needs
Cr...
PERSONAL SELLING IS A
PREFERRED
PROMOTIONAL
COMMUNICATION METHOD
Promotional
Methods
Marketer Controlled
Oral Two Way
Personal
Communications
Personal Selling
(e.g., motivational
intervie...
Since B2B is about personal
relationships, personal selling is
preferred
It consists of two-way communication
It allows th...
Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts...
Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts...
Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts...
Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts...
OBJECTIVE MESSAGES
ARE PREFERRED OVER
EMOTIONAL ONES
Ultimately, decision making in
organizations is more
systematic and seeks
objective outcomes
Therefore, objective
messages...
A return on investment (ROI)
calculation is usually
expected by buyers to guide
their decisions
Gain from Investment – Cos...
Pharmaceutical companies must often
provide pharmacoeconomic information
about their products to pharmacy &
therapeutics c...
Managing B2B Relationships
Pharmacists need to effectively manage
B2B relationships by
• Choosing the right business partn...
Summary
Pharmacists are intermediaries in most pharmacy
channels, so they often participate in B2B
relationships
Their val...
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Business-to-Business (B2B) Marketing

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Pharmacies serve consumer, business, and government markets. Each market requires different marketing strategies. This presentation describes what pharmacists need to know about B2C, B2B, and B2G marketing.

Published in: Healthcare
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Business-to-Business (B2B) Marketing

  1. 1. Business-to- Business Marketing David Holdford, RPh, MS, PhD Professor, School of Pharmacy Virginia Commonwealth University Serving Businesses Who Serve Others
  2. 2. Most pharmacists engage in business-to-consumer (B2C) marketing
  3. 3. But they also serve businesses
  4. 4. And government
  5. 5. Business-to-business markets (called B2B) In B2B markets, both the seller and buyer are businesses
  6. 6. Examples of B2B Wholesalers serve pharmacies, MD offices, hospitals, & other health care businesses Pharmacies serve pharmacy benefit managers (PBMs) & health insurance companies Consulting companies serve pharmaceutical companies and government Pharmacies serve local employers Software companies provide software and platforms to health care providers
  7. 7. Business-to-government markets (called B2G) In business-to-government marketing, the buyers are local, state, or federal governmental entities This presentation will emphasize B2B
  8. 8. Examples of B2G Business services provided to: Medicare, Medicaid, Veterans Administration, or Department of Defense
  9. 9. DIFFERENCES IN B2C VERSUS B2B MARKETING
  10. 10. 10 Seller Buyer Buyer Buyer One Seller, Many Buyers (e.g., Pharmaceutical Company Selling to Retail Pharmacies) Seller Seller Seller Buyer One Buyer, Many Sellers (e.g., Health Care Providers Selling to the Federal Government) Inter- med- iary Seller Seller Seller Buyer Buyer Buyer Many Sellers & Many Buyers With An Intermediary (e.g., Wholesaler Mediating Transactions Between Pharmaceutical Companies and Retailers) Seller Seller Seller Buyer Buyer Buyer Many Sellers & Many Buyers With No Intermediary (e.g., Famers Market) In B2B, Buyers, Sellers, & Intermediaries are Businesses http://www.slideshare.net/dholdford/marketing-channels-in-pharmacy-practice
  11. 11. Typical Channels for Drugs 11 Pharmaceutical Company Wholesaler Pharmacy Patient Pharmaceutical Company Patient Pharmaceutical Company Patient Pharmacy Producer Intermediary Intermediary End User http://www.slideshare.net/dholdford/marketing-channels-in-pharmacy-practice
  12. 12. Typical Channels for Drugs 12 Pharmaceutical Company Wholesaler Pharmacy Patient Pharmaceutical Company Patient Pharmaceutical Company Patient Pharmacy Producer Intermediary Intermediary End User http://www.slideshare.net/dholdford/marketing-channels-in-pharmacy-practice B2B B2C
  13. 13. BUSINESSES AND INDIVIDUAL CONSUMERS USE DIFFERENT PURCHASE PROCESSES
  14. 14. B2B decisions about purchases are made by people who are held accountable by the business Decision makers may be detached and less emotional in their decision making process than in B2C because • they use the business’s money and • do not typically suffer the consequences of their purchase decisions directly
  15. 15. Still, they are human beings And human beings have feelings, emotions, biases, worries, & concerns like everyone Addressing those human issues is essential in B2B marketing
  16. 16. THE B2B DECISION IS OFTEN COMPLEX
  17. 17. B2B purchases generally consist of a systematic assessment of alternatives and take many months or years to complete, particularly if important
  18. 18. B2B purchases may include a request for proposals (RFP), submission & analysis of proposals, and a negotiation of final terms for purchase
  19. 19. THE SOLUTION BEING OFFERED IS OF HIGH VALUE
  20. 20. The complexity of the decision and the solution to the problem usually results in a large price tag for the product or service It is common for contracts for business solutions to generate millions of dollars for sellers Some solutions might consist of multiple sales (e.g., prescriptions) but the sales are bundled into one contract (e.g., contract to provide services for 100,000 covered lives)
  21. 21. THERE ARE MANY DECISION MAKERS
  22. 22. Big decisions are made by many people serving multiple roles Procurers: people who deals with the nuts and bolts of the purchase process (e.g., check invoices, evaluate technical specifications of contracts) Financial advisors: people who deal with the financial feasibility and advisability of the choice (e.g., What is the return of investment (ROI), Can we afford it?) End users: people who actually use the good or service Influencers: people who can impact the decision making process and/or the final choice define criteria’s for the decision-making Deciders: people with the formal and informal authority to determine the final choice--often upper management
  23. 23. People may serve one or many overlapping roles It is important to identify individuals and their respective roles prior to proposing a solution
  24. 24. B2B IS ABOUT PERSONAL RELATIONSHIPS BETWEEN PEOPLE
  25. 25. B2B marketing is built on human interactions Those interactions identify needs and tailor communications to those needs Credibility and trust are essential for B2B relationships to thrive
  26. 26. PERSONAL SELLING IS A PREFERRED PROMOTIONAL COMMUNICATION METHOD
  27. 27. Promotional Methods Marketer Controlled Oral Two Way Personal Communications Personal Selling (e.g., motivational interviewing) One Way Non- personal Communication Advertising (e.g., broadcast, print, Internet) Individualized Non- Personal Communication Direct Marketing (e.g., telemarketing, mailings) Communication Designed to Promote Immediate Action Promotional Sales (e.g., samples, coupons) Marketer Influenced Strategies to Manage Public Image Public Relations (e.g., political advocacy) Strategies to Manage Word-of-mouth Conversations Buzz Promotion (e.g., cultivating thought leaders)
  28. 28. Since B2B is about personal relationships, personal selling is preferred It consists of two-way communication It allows the seller to better understand the needs of buyers and to tailor messages to the buyers’ needs and wants
  29. 29. Best Promotional Methods for… B2B Pitching the message one-to- one or to groups Offer deals like rebates & group discounts Generate WOM among decision makers B2G Same as B2B Political advocacy B2C Integrated promotional communications Personal Selling is typically part of an integrated strategy using other methods too
  30. 30. Best Promotional Methods for… B2B Pitching the message one-to- one or to groups Offer deals like rebates & group discounts Generate WOM among decision makers B2G Same as B2B Political advocacy B2C Integrated promotional communications It is Often Combined with Rebates and Discounts
  31. 31. Best Promotional Methods for… B2B Pitching the message one-to- one or to groups Offer deals like rebates & group discounts Generate WOM among decision makers B2G Same as B2B Political advocacy B2C Integrated promotional communications And Supported by Efforts to Promote Positive Word of Mouth from Key Opinion Leaders
  32. 32. Best Promotional Methods for… B2B Pitching the message one-to- one or to groups Offer deals like rebates & group discounts Generate WOM among decision makers B2G Same as B2B Political advocacy B2C Integrated promotional communications B2G Marketing Needs to Add PA to their Portfolio Because of the Influence of Legislators and Regulators in Decisions
  33. 33. OBJECTIVE MESSAGES ARE PREFERRED OVER EMOTIONAL ONES
  34. 34. Ultimately, decision making in organizations is more systematic and seeks objective outcomes Therefore, objective messages backed up with real evidence are preferred
  35. 35. A return on investment (ROI) calculation is usually expected by buyers to guide their decisions Gain from Investment – Cost of Investment Cost of InvestmentROI =
  36. 36. Pharmaceutical companies must often provide pharmacoeconomic information about their products to pharmacy & therapeutics committees in hospitals
  37. 37. Managing B2B Relationships Pharmacists need to effectively manage B2B relationships by • Choosing the right business partners for their services • Making a case for the value they provide to partners & the customers served by partners • Continually working to gain and maintain their partners' trust 37
  38. 38. Summary Pharmacists are intermediaries in most pharmacy channels, so they often participate in B2B relationships Their value in B2B relationships results from how well they serve their partners within the supply chain 38

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