B2B VS B2C: Definition, Marketing techniques, E-Commerce
If you’ve studied business, then you already know the following: The business industry contains a lot of abbreviations for different terminologies that determine the nature of the business, its target audience, its marketing techniques, and a million other things.
The effort and money put in marketing campaigns is nothing small, so it’s very obvious that marketing savants provide a very clear definition of who exactly the business is supposed to be targeting.
‘ section is one of the first things you learn in a business school. if you don’t understand it well then you might as well drop out.
Modern marketing has given us some basic models though which businesses can develop the basic marketing plan.
One of those models is the ‘STP’ model, it stands for Segmentation, Targeting, and Positioning.
Segmentation simply means that you have to divide your audience into little segments according to geographic, demographic or other similarities.
- Dividing your customers into smaller segments makes it easier to concentrate your marketing efforts on each group according to its needs. It’s the most efficient way to better understand your customers and what you can do to reach them.
- Targeting is the second step after dividing your customers into segments. Not all businesses have the luxury of having different companies under their name each specified to target one type of customer. It’s more expensive than you think.
So, most businesses have to choose the segment they’re going to target.
This process is called “Target Market” which is the first step of targeting.
After you’re done dividing your audience you have to choose which segment you can profit from the most.
Target market leaves you with a bunch of options that you can start picking from who to target and which segment you can focus your marketing efforts on and gain revenue the most efficient way.
- The third step is positioning. It means that you have to define your product position to your audience. Are you providing a product or a service? If it’s a product is it a luxury good or an economy good? These questions have to be answered in the positioning step.
There is more depth to the STP model but these basic definitions are what you need to understand as a consumer.
B2B is shorthand for business to business. The products and services of the business are marketed to other businesses
This definition explains that the b2b classification is one of the steps of targeting.
Every firm before even operating has to decide who is their target audience.
If a company is manufacturing a product, a b2b company is involved in the process of manufacturing this product.
Either directly by being their raw material supplier for example, or indirectly by being their marketing consulting agency.
Every car company has different suppliers that provide them the essential parts of making one car.
If the car company is purchasing tires from another company then this is a b2b type of business.
The same thing goes for car batteries.
A b2b agreement is made in this type of purchase.
Some car companies have a different supplier for each part of their manufactured automobile.
If the car company is making a modern tech-infused car, the software company programming the car to be “smart” is conducting a b2b business.
This example can be applied for a lot of goods and services used in your everyday life but remains unnoticeable by the consumers.
And this goes to the fact that the money paid for these b2b transactions are added to the final price.
The term business-to-consumer (B2C) refers to the process of selling products and services directly between consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.
B2C is more recognized by people in terms that some people don’t necessarily care about the business industry and the process that every good they purchase goes through until handed to the end-user.
“End-user” is a fancy term for the consumer.
When you go buy a bottle of water from a nearby store you’re an end-user, therefore the store selling you the water bottle is conducting a b2c business.
And as already discussed, the water bottle company that manufactures the product and sells it to your nearby store is conducting a b2b business, as for the company that sold them the plastic needed to manufacture the water bottle.
The difference in Marketing techniques: B2B VS B2C
Marketers are very concerned with using the right tools to efficiently and effectively reach their audience.
So after effectively determining if you’re targeting a business or a customer, the next step is knowing how to reach both.
What is common between B2B and B2C marketing strategies is that marketers in both companies have goals to achieve, an audience they need to reach, a brand name they need to build, brand loyalty they have to maintain, and competitors they work to beat.
One of the reasons that b2b is not a very well-known term is that b2b marketers do not target us as consumers, the engagement they thrive to have is not directed to an individual and the plan is not to be accepted by him.
B2b marketing tends to be called niche marketing, if you’re not familiar with the word niche then the best way to describe it is by saying it’s the opposite of viral marketing.
If you’re attempting a niche marketing technique then the goal here is not to be well-known by a large number of people, but to have a good reputation between several companies.
And that is what’s happening is a b2b marketing plan, no one is really interested to know what tire company contributed to the manufacture of a BMW, that is an information a competitor (business) like Mercedez-Benz is eager to know.
So when it comes to marketing for a b2b company you don’t usually find an expensive marketing campaign being planned because simply that is not the number one priority.
A key difference in the 2 marketing strategies is that the theme used in a b2b marketing department is more logical than a b2c marketing plan.
That comes from the fact that businesses are entities, not humans you’re desperate to compel or convince them with your product or service.
B2C marketing is more emotion than logic simply because you want to reach as many people as you can.
And in order to be “viral“, you try to have an influence on people’s lives and get a more emotional reaction.
Emotional reaction translates into word of mouth. Which this is every business owner’s dream.
There’s also a major difference in budgets for both.
Since b2b does not target a big scale of the market, then its marketing dedicated budget won’t be as big as a b2c company.
The small budget does not mean smaller responsibility, if you’re not going to suffer through the process of a focus group and brainstorming for new ideas in your marketing campaign, you’ll have to put that effort in maintaining a good relationship with your clients.
Clients in a b2b are the most important asset, therefore having a good relationship with them is an essential job of a marketer.
The good relationship does not happen by being nice and smiling in their faces, it’s a little more complicated.
To keep your clients happy you have to gain their trust, and that trust isn’t based on emotional factors, it’s exactly the opposite.
Business is money and if my supplier is not giving me quality for my money then they won’t be my first option in the next transaction.
Whilst in a b2c it’s all about building brand loyalty and having a good brand image which can be accomplished in several ways that differ for every product or service offered.
If you lose a client by not offering your best services then you’re going to have a major problem with your supervisor since b2b is very concerned with the chain of command.
The reason for that concern is that in b2c you deal with an individual which makes it easier since most people are compulsive buyers and feel the need to purchase products at all times.
And also when the sale is done, it’s another man’s job to worry about bad reviews.
But in a b2b the decision-making process goes through a lot of departments in order to choose their clients, if you’re in a corporation then it has to go through a board of directors which makes every mistake clear to all those involved and punishable for those responsible for it.
Although b2c is concerned with brand loyalty, it tends to lean into a more short term relationship because in the fast world of the internet it’s very difficult to be loyal to one brand for a long time, so you have to adapt.
Adapting here means that as a marketer you are constantly looking for new channels to reach your audience, new ways to enhance your competitive advantage so that you can be ready for the rapid market changes and also to reach a large purchase volume.
As for b2b, it has a more formal way of handling stuff; some companies have contractual agreements with their suppliers that make them chained to them for a long term relationship.
The differences can go on for a long time between the two types of companies, but it’s safe to say that if you understand the nature of the business conducted in each the marketing techniques followed will make sense in a way.
The new intake on B2B now is E-Commerce which means digitizing the transaction process of the company. It also means that the company does not have to physically exist.
E-Commerce has played a huge rule in b2c businesses like Amazon for example. But as usual, b2b and b2c have their differences and this time the issue is complexity.
B2C transactions are much more simple since the shipping process does not change with every customer, the prices are determined by the business so there’s no room for bargaining.
It’s a routine protocol followed by the business that only needs good software.
But with b2b you’re dealing with a business, and a business is an entity, an entity requires huge purchase volume because most businesses buy in bulk if, for example, they’re purchasing raw materials.
Also apart from the more complicated shipping requirements, b2b being the more formal version of the two, sales transactions are considered a part of a contractual agreement.
Which means if your delivery guy lost the shipment in some way you don’t just get a bad review, you might face a lawsuit. I know, intimidating business.
So the software made for a b2b has to be perfected for the complex tasks it’s going to perform.
Some companies would prefer to not go through the trouble and expense of digitizing their business by maintaining the original old school way.
But it’s no surprise if we see these companies falling behind and losing their market position.
Because whether you like it or not the digital way is the most efficient, time-saving way.
There’s no doubt that Software engineers are coming up with ways to facilitate the experience of the buyer in case of e-commerce whether it’s b2b or b2c, it’s in your best interest that the buyer finds your website accessible.
B2b websites are not opposite-side-different from b2c websites. Some features are just customized to the nature of the business.
A lot of brands are now realizing the importance of b2b e-commerce such as Nike, Ford, and Swarovski.
The reason why everything is classified in details now is that businesses are realizing how difficult the competition gets from every day due to the modern technologies introduced every day to the market.
So whether it’s b2b or b2c the main objective here is to reach an audience, the classification is only studied to put you on track from where to start your marketing plan and how to make it work as efficiently as possible.
The new techniques and trends introduced every day are also a way to reach the audience. And from what it looks like, if b2c e-commerce is a success, then b2b in on track for the same success.