Business to Business and Consumer

by Marketing Trends Digital Intelligence

The two major segments of marketing are business-to-business (B2B) marketing and business-to-consumer (B2C) marketing.

B2B marketing

B2B (business-to-business) marketing refers to any marketing strategy or content that is geared towards a business or organization. Any company that sells products or services to other businesses or organizations (vs. consumers) typically uses B2B marketing strategies.

Examples of products sold through B2B marketing include:

Major equipment
Accessory equipment
Raw materials
Component parts
Processed materials
Supplies
Business services

The four major categories of B2B product purchasers are:

Producers- use products sold by B2B marketing to make their own goods (e.g.: Mattel buying plastics to make toys)
Resellers- buy B2B products to sell through retail or wholesale establishments (e.g.: Walmart buying vacuums to sell in stores)
Governments- buy B2B products for use in government projects (e.g.: purchasing contractor services to repair infrastructure)
Institutions- use B2B products to continue operation (e.g.: schools buying printers for office use)

B2C marketing

Business-to-consumer marketing, or B2C marketing, refers to the tactics and strategies in which a company promotes its products and services to individual people.

Traditionally, this could refer to individuals shopping for personal products in a broad sense. More recently the term B2C refers to the online selling of consumer products.

C2B marketing

Consumer-to-business marketing or C2B marketing is a business model where the end consumers create products and services which are consumed by businesses and organizations. It is diametrically opposed to the popular concept of B2C or Business- to- Consumer where the companies make goods and services available to the end consumers.

C2C marketing

Customer to customer marketing or C2C marketing represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C companies are a new type of model that has emerged with e-commerce technology and the sharing economy.

Differences in B2B and B2C marketing

The different goals of B2B and B2C marketing lead to differences in the B2B and B2C markets. The main differences in these markets are demand, purchasing volume, number of customers, customer concentration, distribution, buying nature, buying influences, negotiations, reciprocity, leasing and promotional methods.

Demand: B2B demand is derived because businesses buy products based on how much demand there is for the final consumer product. Businesses buy products based on customer's wants and needs. B2C demand is primarily because customers buy products based on their own wants and needs.
Purchasing volume: Businesses buy products in large volumes to distribute to consumers. Consumers buy products in smaller volumes suitable for personal use.
Number of customers: There are relatively fewer businesses to market to than direct consumers.
Customer concentration: Businesses that specialize in a particular market tend to be geographically concentrated while customers that buy products from these businesses are not concentrated.
Distribution: B2B products pass directly from the producer of the product to the business while B2C products must additionally go through a wholesaler or retailer.
Buying nature: B2B purchasing is a formal process done by professional buyers and sellers, while B2C purchasing is informal.
Buying influences: B2B purchasing is influenced by multiple people in various departments such as quality control, accounting, and logistics while B2C marketing is only influenced by the person making the purchase and possibly a few others.
Negotiations: In B2B marketing, negotiating for lower prices or added benefits is commonly accepted while in B2C marketing (particularly in Western cultures) prices are fixed.
Reciprocity: Businesses tend to buy from businesses they sell to. For example, a business that sells printer ink is more likely to buy office chairs from a supplier that buys the business's printer ink. In B2C marketing, this does not occur because consumers are not also selling products.
Leasing: Businesses tend to lease expensive items while consumers tend to save up to buy expensive items.
Promotional methods: In B2B marketing, the most common promotional method is personal selling. B2C marketing mostly uses sales promotion, public relations, advertising, and social media.

Philosophy of Business Management

A marketing orientation has been defined as a "philosophy of business management." or "a corporate state of mind" or as an "organization culture" Although scholars continue to debate the precise nature of specific orientations that inform marketing practice, the most commonly cited orientations are as follows:

Product oriented: mainly concerned with the quality of its product. It has largely been supplanted by the marketing orientation, except for haute couture and arts marketing.

Production oriented: specializes in producing as much as possible of a given product or service in order to achieve economies of scale or economies of scope. It dominated marketing practice from the 1860s to the 1930s, yet can still be found in some companies or industries. Specifically, Kotler and Armstrong note that the production philosophy is "one of the oldest philosophies that guides sellers. is still useful in some situations."
Sales or sales-orientation: focuses on the selling/promotion of the firm's existing products, rather than developing new products to satisfy unmet needs or wants primarily through promotion and direct sales techniques, largely for "unsought goods" in industrial companies. A 2011 meta analyses found that the factors with the greatest impact on sales performance are a salesperson's sales related knowledge (market segments, presentation skills, conflict resolution, and products), degree of adaptiveness , role clarity , cognitive aptitude, motivation and interest in a sales role).

Marketing/Market orientation: This is the most common orientation used in contemporary marketing, and is a customer-centric approach based on products that suit new consumer tastes. These firm engage in extensive market research, use R&D (Research & Development), and then utilize promotion techniques. The marketing orientation includes:

Customer orientation: A firm in the market economy can survive by producing goods that people are willing and able to buy. Consequently, ascertaining consumer demand is vital for a firm's future viability and even existence as a going concern.
Organizational orientation: The marketing department is of prime importance within the functional level of an organization. Information from the marketing department is used to guide the actions of a company's other departments. A marketing department could ascertain (via marketing research) that consumers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would inform the R&D department to create a prototype of a product/service based on consumers' new desires. The production department would then start to manufacture the product. The finance department may oppose required capital expenditures since it could undermine a healthy cash flow for the organization.

A marketing mix is a foundational tool used to guide decision making in marketing. The marketing mix represents the basic tools that marketers can use to bring their products or services to the market. They are the foundation of managerial marketing and the marketing plan typically devotes a section to the marketing mix.