The essay below is an attempt to analyse how marketing to business and corporate customers adopts a completely contrast approach from marketing to consumer groups. To begin with, the essay will throw light on ‘What is meant by Marketing? and ‘What is a Marketing strategy?' This will be followed by an explanation of the Essentials of Business-to-Business(B2B) marketing and Business-to-Consumer(B2C) marketing. Furthermore, there will also be a mention of the similarities between these two approaches along with a detailed analysis of the differentiating approaches adopted in B2B and B2C marketing based on their aspects such as characteristics, strategies, buying process, customer service, brand identity, ultimate goal and so on. The essay will also be supported with relevant examples throughout of these two approaches of Marketing.
One of the things that encompasses our everyday life and we don't seem to comprehend it is Marketing. This is one of major confronts of an outstanding marketing manager wherein the customers are unaware that they are targets of an ongoing marketing crusade. In my own words, marketing is an attempt to showcase a product on display in order to attract buyers' attention. Just as without wheels a car cannot move and proves useless; similarly without marketing a business cannot set itself in motion. This initial ‘push' which is provided to the business by marketing leads it to profitability. In today's world, nothing can be sold unless it is marketed. Any company can produce a commodity or service but how will they make consumers buy their products? This is where the role of marketing emerges. Thus, marketing is fundamental to the progress of a business.
Marketing is a dynamic and multi-faceted concept. Marketing is generally seen as the task of creation, promotion and delivery of goods and services to either consumers or businesses (Kotler Philip, 2000). A more precise definition of Marketing would be “The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.”(Kotler Philip and Armstrong Gary, 2008) This implies that Marketing is a two-way process or a process having two-fold aims; basically to meet the needs and wants of customers by maintaining good relations with them, which ensures long-term sales and in turn expecting value from them in terms of customer satisfaction and loyalty and value in real terms i.e. profits. For this purpose it is essential for the company to understand the psychology of the consumers and the market concerned. This objective can be achieved by engaging in what is known as a ‘Market study' or ‘Market research'. Market Research is basically to undertake a detailed study of the needs, wants, beliefs, tastes and preferences of consumers, changing market trends and fashions for the purpose of marketing the product well in the market. It is basically the act of gaining a profound knowledge or insight of the choices of the consumers. From the results of Market Research, the Marketing team of a company design the plan they ought to follow in marketing their product which is known as a ‘Market Strategy'. On the basis of the strategy, you can identify the appropriate target segment in the market and segment the market accordingly. This leads to increase in sales and revenue-profits of the firm.
Marketing is a simple, yet complex phenomenon. For the normal public, marketing is marketing irrespective of the fact, that it targets which segment of society. Generally, in businesses today there are two approaches to carry out sale: Business-to-Business marketing(B2B) and Business-to-Consumer marketing(B2C). But people feel that in the end the product is being sold; be it to a company or an individual it doesn't make much of a difference. But things are not as easy as they seem. There are profound differences between these two concepts, in terms of, Market strategies, Buying processes, Purchases, Relationship management, Target segments, Time-frames, Ultimate goals and so on. The essay will stress on each of these issues in detail later on; now let's first analyse the essentials of B2B and B2C marketing.
In today's ever-growing world, business mechanisms have greatly evolved. The two terms B2B and B2C marketing were initially coined to differentiate between internet commerce businesses that carried out sales primarily to consumers as against those who marketed their products to other businesses for further sale. Later on these terms have widened the scope of their definitions to refer to businesses selling directly to end consumers (B2C) or to other businesses in the market (B2B). To illustrate, when an individual purchases a pair of shoes from a shoe-retailer the transaction is a B2C one while the transactions that were carried out to make the shoes available for sale, such as, the purchase of rubber, cloth, lace, leather etc. alongwith the selling of the shoes by the shoe-manufacturer to the shoe-supplier and from the supplier to the retailer down the value chain will be considered a B2B transaction. Business Marketing is the activity of individuals or any organizations, bringing about the sale of their goods and services to other businesses or organizations which in turn resell these goods and services or use them as raw materials in the production of their own products and services. Research on this discipline has emerged since the last 25 years and continues till date. This is also known as Industrial Marketing or Business-to-Business Marketing(B2B). In this case, the products are sold for any kind of usage apart from personal consumption. While carrying out B2B marketing it is important to keep in mind, that when dealing with big businesses the sales cycle can take ages to complete as big organizations do not place firm orders quickly. So, you need to place marketing at the core position in your business and then such a clever marketing will enable you to secure sales orders at a fast pace. You also need to give the customer a lot of importance and develop and maintain good customer relations(in this case with other businesses). You should adopt the approach that ‘the customer is always right.' As mentioned earlier, that the sales and purchase cycles are quite long-lasting, the products and services traded assume quite a high value.
Different marketing techniques can be used to market your product to other businesses, the best being the use of the internet to launch campaigns that will end up bringing in new business. Inorder to be successful in B2B marketing, you must be the best in your field and position your business in such a manner that it is easily noticeable. You can get stuff printed with the help of the press regarding your business achievements and future goals and so on. Also if your product has been widely accepted by a particular business then you must publicize this fact greatly. But getting returns on your marketing efforts is needed, to check how successful the marketing has been. This can be done by analyzing the lead factors, running a survey and so on. And finally, a successful B2B marketing helps not only in developing good customer relations and increase in sales but also in developing a ‘brand name' in the market which is a priceless gift to a business. In short, a ‘goodwill' of the company's name gets created in the market.
Business-to-Consumer marketing(B2C) refers to sale of goods and services to individuals, households or groups of individuals who are buying the products for personal usage or to facilitate consumption of other individuals. Talking about the essentials of B2C marketing, it is one among the important marketing promotion acts that can be used by businesses to advertise their products. This can be done by businesses sending their representatives to shopping centres, market places, town centres, malls and so on for the campaigning of their products. These are strategies essential to create awareness among consumers regarding their product. Also door-to-door advertising can be undertaken and the help of the media can also be taken in promotion. B2C thus generally deals in assisting the business to directly target individual consumers. For example, companies with brands like Red Bull put up stalls in colleges as they target youngsters whom they believe consume a lot of these energy drinks, and distribute free samples among them mainly as a part of their promotion activities.
The essay will now progress ahead explaining the various characteristics of B2B and B2C marketing which actually are contrasting to one another and thereby strengthen the debate B2B vs B2C marketing. Inspite of the fact that the marketing programmes for both B2B and B2C marketing are similar, the way these are executed, the information they provide and their outcomes vary. To begin with, the marketing strategies of the two differ. The purpose of their strategies is the same that is, to develop the business and yield profits but their styles vary. B2B follows a transactionary path and is concerned with the connections between two businesses. While, B2C enables the business to reach out to the appropriate target segment, to market their products effectively. A B2B venture must offer for sale such products and services; it must pay attention to its marketing programmes and design them in such a way which fulfils and achieves the prescriptions and objectives (both operational and corporate) that the target customers (other businesses) have in mind. On the contrary, a B2C undertaking needs to understand and empathise with the aspirations, perceptions, desires and emotions of their potential and current purchasers. There is the necessity to create strategies that will stir a kind of awareness among the consumers and will compel them to buy your products. The brand Kellogg's is an apt example for B2C marketing. Its strategy aims at targeting different segments based on age. It has developed products to suit the needs and tastes of people belonging to different age groups such as, ‘Kid-Preferred' brands like Frosties and healthy ‘Mum-Approved' ones like Raisin wheats, the K-Special brand for those on a strict diet and also numerous other quick snack-bars and breakfasts.
Also important to note is that the basic difference between B2B and B2C marketing is that they target different Customers. The customer in B2B marketing if simply put will be “other businesses”. Since this system involves fewer clients buying greater volumes of products, there is much more complexity implicated as the marketing mix in this case will be affected by the exceptionality of B2B marketing. Whereas, in case of B2C marketing the customer is an individual who is influenced by his own family, friends, colleagues, but in the end is the sole buyer. Though some people may argue that both are customers at the end of the day; yet the cross argument is that business buyers are actually individuals who are making purchases on behalf of their company and so do not get too emotionally and personally involved in the purchase while consumer buyers buy for self-consumption and the emotional element is quite strong in the buying process. Also orders are placed in bulk under B2B relations depending on the scale and sizes of the businesses concerned whereas, under B2C a consumer may place an order or buy only a single item or few quantities of the item. Payment is generally made on a credit basis under B2B while, it is mostly made by cash, cheque or credit card under B2C.
The Buying Process also varies between B2B and B2C marketing. Incase of B2B, the buying process focuses on a small, particular target segment and is a multi-step process involving 8 stages: problem recognition, general description of the need, product specification, search for a supplier, proposal solicitation, selecting the supplier, order-routine specification and finally overview of performance (Kotler Philip and Armstrong Gary, 2008). These stages are mentioned in theory but in practice some of them can be bypassed, modified or repeated; depending on the need of the situation at hand. On the other hand, B2C buying process focuses on large target segments and is a single-step process with shorter sales cycles. It involves customers identifying their needs, doing a bit of investigation on what is available in the market, all possible alternatives, making a purchase decision and finally determining how they would feel after making the process. It is a less complicated process. Online shopping is a good example of buying under B2C; wherein people can research various products, their prices and compare them on the internet before actually buying the product.
The buying characteristics of the B2B buyers also differ from those of B2C buyers. The business buyer has refined and cultured tastes, he is quite sophisticated and well-versed of your product details even better than you at times and has done enough of research before arriving at the decision of buying your product or service as he is greatly concerned with the profit margins of his organization. He does not mind paying more but is keen on receiving a good quality product. The B2C buyer, on the other hand, is generally interested in buying products at a cheap price and so they research well the rates offered at different places and then buy the one with lowest price. Also many a times even after research customers prefer buying goods from a known retail outlet. Customer service element is vital in any business and if not rendered with utmost care, it can prove all the marketing efforts futile. In B2B, customer service begins right from the day negotiations on a deal begin while in B2C customer service is needed to make buyers buy your products even if they are priced higher; basically to create customer loyalty and repeat purchases. In addition to this, we find that the Business buyers are likely to be greatly hesitant to risk, and are in search of trustworthy sellers and consultants while, the B2C customers are much more fervent about risky and innovative products than their counterparts.
B2B marketing is more Relationship-driven as compared to B2C which is more Product-driven. It is based on efforts which help to develop and build strong relationships with customers. They develop a brand identity based on personal relationship. These brands help in getting the product considered, not necessarily selected. Anyways, brand awareness is not of crucial importance in B2B marketing. Buyers here take rational buying decisions based on returns estimated, investment to be made, cost reduction, future prospects etc. As against this, B2C marketing being product-driven aims at maximizing the value of the operation. Brand identity is created on the basis of imagery and repetition. These brands help influence purchase decision of buyers as they buy emotionally, based on quality, status, ease and security and encourages them to buy, maintain loyalty and spend slightly higher.
The ultimate goal of B2B marketing is to transform potential buyers into customers and this is done by investing in educational and awareness creating activities such as distributing informative newsletters or launching an email campaign or developing a webpage displaying the various features, benefits and approximate price of the product while, the ultimate goal of B2C is to change shopaholics into purchasers as consistently and assertively as possible. They take up merchandising actions such as discount coupons, enchanting offers, in-store attractive posters, gift vouchers etc; these activities are carried out both online and in store and they mainly aim at making buyers buy a product instantly.
Another key divergence between the two is the quantity of channels in the supply chain a product must stream through before getting to the customer. In case of B2B the channels are less in number but greater in size as compared to the larger sum of minor channels with B2C. (Marketing Profs, 2005) Furthermore, in terms of technology and integration, for B2B it is required to get integrated to the software of their partner so as to facilitate even re-supply and billing whereas, B2C does not have to worry about this function since the consumer will revisit them due to commitment vs. convenience.
The Relationship theory of marketing can be considered as one of the major similarities of B2B and B2C marketing. Relationship Marketing is the approach to ascertain, sustain and augment long-term links with customers and other shareholders. Both B2B and B2C marketing would be able to achieve their goals through a relationship. At various points in the value-chain maintaining good relationships is absolutely essential. In B2B, the marketing policy must involve respect between two firms and in B2C trust is an important ingredient between customers and firms.
Thus, we find that in both B2B and B2C marketing we are dealing with customer behaviour that is, human behaviour, so this is the general ground. But this said, as we saw above, they are two different realms adopting different approaches. In the entire essay, there has been an analysis of the major differences between B2B and B2C marketing and the fact which is fascinating is that, they both are so similar, yet different. In conclusion, one can cite that the leading stimulating factors of marketing approach are not concerned in reality, if it is B2B or B2C, but in the magnitude of the pecuniary risk, the character of the affiliation and the intricacy of the decision making process with regards to customers. If this is comprehensible then marketers are likely to make the right decisions. Perhaps, the secret lies in doing away with the distinctions and plainly calling it ‘Business to Customer'(both kinds of customers: individual consumers and other businesses).
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