Difference between B2B and B2C - Essay Example

Business-to-Business (B2B) Marketing is managerially as Well as Conceptually/Theoretically Very Different from Business-To-Consumer (B2C) Marketing INTRODUCTION The different concepts of marketing draw its initial roots from the traditional methods of exchanging goods. This strategic development of the different marketing concepts has emerged due to the present era of globalisation. With the development of the different technologies, the concept of marketing has evolved with immense importance over the years and from the past few decades. This development is observed to have a huge impact on the development of concept of marketing. The producer market has further evolved as consumer oriented market with the main motive to meet with the needs of the consumers. In addition, the emergence of the consumer oriented goods market has enhanced the need of relationship marketing to develop the strategic concepts of marketing. With the development of the consumer oriented market, the needs for the interactions among the consumers as well as the producers are observed to be acting as the most important factors for business development. This changed concept of marketing is integrating the emergence of the different needs of the individual market. These needs are further noted to be developing the concepts of marketing and have catalyst the needs for other marketing concepts that include relationship marketing and network based marketing. The network-based marketing is a new concept that enables marketing between business-to-business and enhances the different marketing concepts. The emergence of the different strategic market development helps in developing the marketing domain, which is observed to be having a huge impact on relationship marketing with the consumers (Gronroos 395-417). THESIS STATEMENT The changed concepts of marketing have further resulted to the needs of strategic development that is to be integrated within the system of marketing. With this regard, the essay elaborates on the development of the different strategic concepts of marketing. Furthermore, the essay focuses on the difference between the business-to-business as well as business-to-consumer depending on the different managerial and theoretical concepts. CONCEPTS With the emergence of development of peripherals of marketing, the different concepts of marketing are changing. This changed level of development has affected the various new strategies relating to the business-to-business and business-to-consumers. The aforementioned new strategies are the emerging concepts of e-commerce. Ecommerce or the internet commerce helps in developing the trade relation through purchase and sale with the use of internet. This changed development of purchase and selling has in turn influenced the ability of the business to trade in the international market without additional investment of capital (Nema 100-104). Business-to-business Marketing. The business-to-business (B2B) is a strategic development of the marketing concepts that integrates the transactions between two organisations. The electronic transaction takes place between two business entities. B2B refers to the development of the marketing relationship between two entities where both the seller as well as the consumers is identified as an organisation. The transaction takes place between the two organisations and enhances their credibility to perform (Brennan, Canning and McDowell 1-20). The different products that are traded in the B2B market are far more different from the other markets. This strategic development involves a huge amount of services that are distinguishable from other marketing features. B2B marketing requires huge amount of services and needs to be conducted through a highly standardised products. Since, this type of marketing is highly complex, the different strategic development includes the use of quality products and/or services. Owing to the fact that the consumers are mostly professional buyers, the system becomes quite complex and needs proper development of the marketing strategies. The influence of the different initiators is more prominent among the B2B market than the other marketing concepts. Furthermore, the number of consumers in the B2B market is smaller than other markets and hence, it becomes more important for the marketers to increase the marker demand by meeting their needs and preferences (Pfoertsch, Linder, Beuk, Bartikowski and Luczak 6-15). Business-to-consumer Marketing. Business-to-consumer (B2C) marketing is observed to be quite different from the concepts of B2B marketing. In this form of ecommerce, different B2C transactions take place between the business organisation and consumers. B2C marketing is involved with selling goods with individual consumers. B2C market is majorly concerned with the development of the marketing channels that would help in enhancing the concepts of marketing and in developing the same. The business industries are solely inclined towards developing their marketing concepts in order to gain more and more consumers and develop their brand image. This development could only be integrated with the different channels that would help in facilitating the needs of the consumers. The B2C market helps in developing the different concepts of marketing and enhances the organisational approach to improve the credibility of the brand image of companies involved in B2C marketing. Moreover, development of technologies has initiated huge change in the buying patterns of the consumer and has imposed a challenge on different marketing agencies to develop their marketing strategies accordingly (Kha 2-30). DIFFERENCES IN THE MARKETS In the present era of competition, the different concepts of marketing have changed depending on the needs and preferences of the consumers. The differences in the markets are observed to be having an impact on the development of different marketing concept that would further enhance the credibility of the market. However, there are certain differences in the characteristics of the two types of business that are related to the two types of market. These characteristics involve the different use of the strategies that helps in the segregation of consumers. The major differences are elaborated hereunder. Figure 1: Synopsis of the differences between B2B and B2C (Note: Prepared for the purpose of the study) Nature of ecommerce. The nature of ecommerce is observed to be quite different between the two modes of business, i.e. B2B and B2C. For B2B the internet transactions take place between two or more business entities. On the other hand, in B2C internet transactions takes place between business entities and customers. Number of Buyers. There has been a huge difference in the number of buyers between the two types of the e-commerce market. This is observed to be depending majorly on the mode of operations of the two businesses. The mode of operation of the two types of business has been acting as a huge factor for the development of the concept that is related to the operations of the business. Owing to the fact that B2B business is related to the transactions between different organisations, the number of buyers are less in number than B2C consumers. The involvement of individual consumers makes the consumers more in numbers than B2B marketing. This enables the B2C market to cater to larger number of consumers and develop their brand image in the market (Kolis and Jirinova 22-27). Purchase Initiation. Purchase initiation between the two types of market is observed to be having a huge impact on the development of the different strategies. This includes the enhancement of the different garnered values that would help in integrating strategic concepts and develop the market. On a broader view, the purchase initiation of the market is largely dependent on the consumption pattern of the consumers. It is largely observed that the consumers under the B2B market have a purchase initiation to sell the products to other consumers. Whereas, for the B2C market, purchase initiation of the consumers are based on their self-buying needs. Purchase initiation is the prime factor that helps in deciding the demand for a product and/or service (Ahmadi 128-138). Evaluation Criteria. The evaluation criteria of B2C business are slightly different from that of B2B business. Owing to the involvement of individual consumers, the chances of involvement of emotions in deciding the buying pattern is undeniable. The emotional attachment of the consumers in developing their buying needs is undeniable and has been the sole focus for the marketers to decide the trend of demand. On the other hand, B2B marketing is majorly inclined towards consuming products that are solely meant for reselling to consumers. This includes less amount of emotional attachment in deciding the buying patterns of the consumers and has a rationale that decides their consumption trends (Akcura and Altinkemer 243-261). Information Search. Consumers who are trading under the B2C market has lower amount of information search in comparison to the different B2B consumers. This could be because of the fact that the consumers’ preferences for a particular consumption are based on their sole decision. The B2B consumers on the other hand plans strategically before consuming a particular product. This could be further justified as the B2B consumers use the consumed products either for trading or for modifying the same for specific consumption. This pattern is observed to be having a huge impact on the development of the different strategic plan that would help in enhancing the credibility of the market (Jones and Robinson 1-30). Number of Supplies Availed. The numbers of products and services that are ordered is higher and are usually in bulks in case of the B2B market. This provides an added advantage for the suppliers, as they are able to sale huge amounts at one transaction. However, the supplies availed for B2C businesses are usually small in quantity and ranges from one to a medium amount of ordered goods (Kolis and Jirinova 22-27). Suppliers Choice. The choice of suppliers is limited in the B2C business as the consumers hardly conduct any information search for identifying alternate suppliers. This tends towards enhancing the brand loyalty of the consumers and further develops brand fascination for the marketers. On the other hand, the rigorous research conducted by the B2B consumers make them capable of developing a wide base of alternate suppliers. This vast selection makes the suppliers vulnerable to the risk of alternation. Hence, besides developing a brand fascination among the different B2B clients, the suppliers are indented in developing a long-term relationship with the B2B clients (Meyer 1-40). Size of Orders. The size of orders for the B2B market is far more than that of the B2C market. The orders are placed in bulks and the order sizes are usually in large quantity. Contrary to the above, the different strategic developments are observed to be having a huge impact on the strategic plan for the B2B and B2C markets. Owing to the fact that the B2C businesses are related to individual purchases, the orders are usually small in quantity. It is further noted that huge turnover that the suppliers enjoy from the B2B business is observed to be larger than the B2C marketing (Nema 100-104). Frequency of Order. The frequency of order is highly different between the two markets. B2B market is highly inclined in consuming goods at a continuous rate, where the chances that the frequency of order will be more. The chances are there that the ordered frequencies will be moderate to high. On the other hand, the B2C market has a lower frequency of ordering. This could be a fact that the different consumers place individual orders and in larger gaps. Thus, the frequency of ordering from single consumers is lower in the B2C market. However, owing the large base of consumers there is a continuous flow of order (Kolis and Jirinova 22-27). Nature of Demand. The nature of demand in case of B2C is direct whereas for B2B it is derived. The orders that are received from the consumers are majorly direct orders. Hence, the generation of need and demand could be easily identified. Contrarily, the orders placed by the B2B consumers are observed to be derived from the needs of the different consumers. Therefore, the anticipation of the demand could not be easily possible (Kolis and Jirinova 22-27). Elasticity of Demand. The elasticity of demand is quite high for B2C than B2B. This could be because of the fact that the B2C market is dependent on direct consumption and hence, influenced by direct demand. Conversely, the B2B market is largely focused on derived demand and thus, the elasticity of demand is low (Kha 2-30). Volatility of Demand. The volatility of demand is quite prominent in the industrial sectors. Hence, the volatility of demand is high among the B2B consumers than the B2C consumers. This could be owing to different consumers and their needs of consumption. This is further observed to be having a huge impact on the different marketing strategies. The volatility affects the consumption pattern of the market, which in turn affects the supply (Brennan, Canning and McDowell 1-15). Role of Brand. The different role of brands has a huge role to play to decide the individual market demand. The consumers in the present era are highly brand specific and hence, the sole strategic development of the B2C market is to develop brand engagement amid the consumers. The major development of the B2C market suppliers is to enhance their brand image in the long run. On the other hand, B2B market only follows a brand to decide the assurance of quality that is underlined with a specific brand (Pfoertsch, Linder, Beuk, Bartikowski and Luczak 1-17). Marketing Strategies. The marketing strategies that are undertaken for a B2B market is majorly inclined in lead generation. This could be majorly because of the fact that the size of the market is small and the major players are inclined towards acquiring more and more consumers. On the other hand, strategic marketing plan for the B2C market is observed to be having an inclination towards developing their brand engagement among the consumers (Pfoertsch, Linder, Beuk, Bartikowski and Luczak 1-17). Example. Amazon online bookstore can be viewed as a practical example of both B2B and B2C mode of ecommerce. Amazon developed its retail chain of business by catering services to the readers of the world. This can be cited, as an example of B2C, where the company has been catering its services to the customers and the quantity of transactions are small. Conversely, the online store is again collecting books from the different publishers to meet with their demand of the retail consumers and receiving books in bulk. While under this mode of business the company is undergoing B2B business where the transaction is taking place between two business organisations (Nema 100-104). SIMILARITIES BETWEEN B2C AND B2B Amid the differences that are present in the market, it can be observed that there are certain similarities between the two. These similarities are because of the different conceptual similarities between the two notions of market. The same could be elaborated under the following heads. Consumer Relationship Management. Consumer tastes and preferences have been a volatile component and are very crucial to decide on the particular trend of the market. Hence, consumer relationship is observed to be one of the major factors that help in determining the demand of a product. The marketing managers irrespective of the mode of business have been managing consumer relationship in an effective manner. Thus, it could be further argued that owing to the lack of physical evidences, the maintenance of consumer relationship is the prime need of e-commerce. The management of consumer needs through the deliverance of different quality products will help in developing brand fascination. Managing the different consumer needs irrespective of the mode of operation helps in enhancing a sustainable domain in the long run (Saha 65-72). Branding. In the global market, the different needs of the consumers have changed. In the present era, the consumers have been demanding quality over quantity. This elated level of preferences has further influenced the needs of quality assurance from the producers. The preferences of the customers have hugely affected the need of branding to ascertain that consumers are offered with quality products as per the desired standards. Furthermore, brand helps in deciding a particular trend of the market and increases consumer loyalty. Irrespective of the consumers and their trend as well as demand, the need of different quality preferences is universal. This pattern has been observed to be unanimous irrespective of the different markets prevalent in e-commerce (Pfoertsch, Linder, Beuk, Bartikowski and Luczak 1-17). Moreover, owing to the lack of physical evidences of the products that are ordered, brand plays a major role in assuring quality of a product consumed. Understanding the Needs of Consumers. Another major similarity between the two concepts is about understanding the needs and preferences of the consumers. The need varies from a series of factors ranging from quality needs of the consumers to security needs. The different needs of the consumers are quite relevant depending on the different security involvement in payment systems. On a positive note, both the markets are undergoing huge changes to meet with the different needs of the consumers. Both B2C and B2B markets are undergoing massive development by incorporating various other systems that would align their services with the needs of their consumers (Ahmadi 128-138). Example. Managing clients has been a similar challenge for both the types of businesses. For example, while on one hand, Amazon has been meeting with the consumer satisfaction and developing its popularity by integrating value added services to its consumers, on the other hand, supplier publishing houses are providing Amazon with the proper services so that they can maintain their business relationship with the online bookstore (Nema 100-104). CONCLUSION E-commerce has been a popular concept in the present day market. With the gaining momentum of online shopping and change in the pattern of the demand, the need of ecommerce has emerged. It has been observed that many popular organisations are developing their market in e-commerce. With this elated need of business development, the two concepts of e-commerce have also gained momentum. The B2B and B2C market are identified to be gaining popularity in the present day market due to the change in the demand patterns of the consumers. These strategic developments have a huge impact on the buying patterns of the market. Even though, both B2B and B2C are concepts of e-commerce, there have been certain differences between the two. It has been recognised that the differences exists majorly for the inclination towards serving different types of consumers. There has been a steep difference between the two concepts with regard to demand pattern, quantity and frequency of demand. Moreover, the marketing strategies that are to be framed for the markets are even quite different. This is because the ultimate consumers of the two markets demand goods depending on preferences as well as tastes of the consumers. However, amid all the major differences, there have been certain similarities between the two concepts, as the fundamental needs of both the market are same and the needs of development that are to be incorporated within the system are more or less similar. Furthermore, the different conceptual developments that are incorporated for consumer satisfaction are observed to be based on the fundamentals of marketing and hence, are similar to a greater extent. Works Cited Ahmadi, Kaveh. “Predicting e-Customer Behavior in B2C Relationships for CLV Model.” International Journal of Business Research and Management 2.3 (2011): 128-138. Print. Akcura, M. Tolga and Kemal Altinkemer. “Diffusion Models for B2B, B2C, and P2P Exchanges and E-Speak.” Journal of Organizational Computing and Electronic Commerce 12.3 (2002): 243-261. Print. Brennan, R., Louise Canning and Raymond McDowell. Fundamentals of Business-to-Business Marketing. UK: SAGE, 2011. Print. 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Pfoertsch, Waldemar., Christian Linder, Frederik Beuk, Boris Bartikowski and Cheryl Ann Luczak. “Roles affecting Individual Behaviour in B2B and B2C Markets.” B2B Brand Definition - Understanding the Role of Brands in Business and Consumer Markets (2007): 1-17. Print. Saha, Swapan Kumar. “B2B Marketing Mix Impact on Asia Pacific Region.” International Journal of Scientific & Technology Research 2.12 (2013): 65-72. Print. Read More