Abstract
The history of selling arrives at a major milestone when two different objectives or targets of selling are clearly defined. This chapter recounts how the single selling function migrated to two different approaches: business to consumer (B2C) and business to business (B2B). In this chapter, the special characteristics, methodologies, and approaches of B2B selling are identified and their origins are made clear. History shows that the difference in selling to consumers or to businesses was not clear at first. Peddlers and traveling salesmen sold to both as selling became a profession. The industrial revolution, growth of commerce, and the founding of the USA all contributed to a strong commercial world that required sales to approach and deliver differently to businesses, from a consumer market. Scientific management played a major role in this change, as organizations attempted to apply this scientific method to the sales function.
TopBusiness To Business Versus Business To Consumer Selling
The activity of selling—the act of making a sale—began as a mixed activity in terms of who was the target of the sale, who was doing the selling, and who benefited from the transaction. Sometimes the seller would negotiate with a consumer, the person that would directly consume the product offered for sale. Sometimes the same seller would be in negotiation with a buyer from a shop, a business, or some group that would purchase the item only to sell it again at a profit. Much later we can clearly identify two distinct selling activities—selling to consumers and selling to organizations or businesses. This initial mix of activities was the result of the fact that,
The traveling salesman inherited his improvisational ways and, more important, expanded and refined them within the new economic context of the late nineteenth and early twentieth centuries. Neither peddler nor door-to-door canvasser, the commercial traveler—or drummer, as he was often called—almost always sold to the trade and was the aggressive, logical consequence of the expanding national market system, a figure who from an economic standpoint remained inseparable from the growth of the railroad and other developments that strengthened the “visible hand” of business. No other occupational group concerned with selling drew so heavily—or represented so dramatically the nascent power of modern business enterprise. (Spears, 1995, p. 8)
Technology helped create the seller that called on other businesses and brought the offerings of one manufacturer to another business that could use those items. According to Spears (1995),
After the Civil War, as the railroad system expanded and business interests reached out to new markets, the traveling salesman staked his claim on the American imagination. Hauling his gripsacks and sample trunks through railroad depots, hotel lobbies, and general stores, linking retail merchants to wholesalers and manufacturers, he played a vital role in the creation of a national market economy. (Spears, 1995, p. 1)
This type of seller focused on the businesses that needed the goods of other manufacturers and on products that were more complicated, more expensive, and less immediately consumable. Firms that focused on business selling usually had a smaller force of sellers, where “companies that sold to consumers often had large sales forces, larger than those that sold to businesses” (Friedman, 2004, p. 10).
The function of business-to-business selling, or organizational selling as it was called, had certain characteristics. Researchers made it important,
To understand how business or organization customers can be segmented. Many firms sell not to ultimate consumers but to other businesses. Although there are many similarities between how consumers and businesses behave, there are also several differences. Business buyers differ as follows: (a) most business buyers view their function as a rational (problem-solving) approach; (b) the development of formal procedures, or routines, typifies most business buying; (c) there tend to be multiple purchase influences; (d) in industrial buying it is necessary to maintain the correct assortment of goods in inventory; and (e) it is often the responsibility of the purchasing executive to dispose of waste and scrap. (Burnett, 2008, p. 98)
Over time, the distinction has been made between selling the product of a business directly to a consumer, termed a business-to-consumer (B2C) activity, and selling the product of a business to another business, termed business-to-business (B2B) sales. The techniques, skills, activities, and value of the sales became distinctly different.
TopEvolution Of The Business-To-Business Sales Process
As the economy of the USA grew at the end of the 19th century, it became clear that some sales organizations would focus on business customers, while others would focus on the end consumer. At a time when management was enamored with Frederick Taylor’s (1915) ideas about scientific management, sales organizations attempted to take a more scientific or systems approach to organizing their efforts. Observe the difference between consumer and business selling and how selling strategies were being created around the turn of the century,
Key Terms in this Chapter
Business-to-Business (B2B): Business-to-Business (B2B) refers to transactions or relationships between businesses, where one business provides goods or services to another business. It involves the exchange of products, services, or information between companies rather than between a business and individual consumers (OpenAI, 2023 AU22: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
Wholesale Houses: Wholesale houses are businesses or entities that operate in the wholesale distribution of goods. They purchase large quantities of products directly from manufacturers and sell them in bulk to retailers or other businesses at a lower per-unit cost (OpenAI, 2023 AU29: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
Trusted Relationship: A trusted relationship is a connection or association between individuals, organizations, or entities based on mutual confidence, reliability, and a history of consistent and honest interactions. Trust is a fundamental element in building strong and enduring relationships (OpenAI, 2023 AU28: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
Consumer: A consumer is an individual who purchases and uses goods or services to satisfy personal needs and wants. In the context of economics and marketing, consumers play a crucial role in demand and supply dynamics (OpenAI, 2023 AU24: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
BUSINESS-TO-CONSUMER (B2C): Business-to-Consumer (B2C) refers to transactions or interactions between a business and individual consumers. It involves the sale of goods or services directly to end-users or customers (OpenAI, 2023 AU23: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
Strategy: Strategy refers to a plan or course of action designed to achieve a specific goal or objective. In business, strategy involves making choices and allocating resources to achieve a competitive advantage or address challenges in the marketplace (OpenAI, 2023 AU27: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
Drummer: A drummer is a musician who plays the drums, a percussion instrument. Drummers are essential in various music genres and bands, providing rhythm and contributing to the overall sound of a musical piece (OpenAI, 2023 AU25: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
Brand Loyalty: Brand loyalty refers to the behavior of consumers who consistently choose and purchase products or services from a specific brand over time. Brand loyal customers are committed to a particular brand and often resist switching to competitors (OpenAI, 2023 AU21: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).
Scientific Management: Scientific management, also known as Taylorism, is a management theory developed by Frederick Winslow Taylor in the early 20th century. It emphasizes the systematic analysis and optimization of work processes to improve efficiency and productivity. Scientific management involves the application of scientific principles to tasks, time and motion studies, and the standardization of work methods (OpenAI, 2023 AU26: The in-text citation "OpenAI, 2023" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).