B2C vs. B2B Marketing
It cannot be denied that the upsurge of the dot-com era has been ushered in by the intense usability and accessibility brought about by the Internet. Many businesses shaped up to suit to the rushing trend of electronic commerce (e-commerce), where firms now have an avenue to easily reach their customers as easy as a click of the mouse button. Indeed, the dramatic growth of the Internet during the late 1990s became phenomenal because multitudes of businesses and households connected, while many websites sprouted like mushrooms that led to the ballooning of the amount of business conducted over the Internet.
Many businesses earned a lot in their “virtual” income that also complemented their profits in the “real” world. In this case, marketing through business-to-consumer (B2C) and business-to-business (B2B) avenues became an important focus at present. In this case, we need to answer: what is the difference of the B2C and B2B marketing? McLeod (2007) made the explanation simple by saying that “B2C means Business to Customer or Consumer as in the end user, or the car showrooms who sell complete Ford motors”, while “B2B means Business to Business as in the suppliers of parts for cars to Ford to make the complete cars”.
Both are business models used in e-commerce and it is crucial for marketers to understand the manner in which they can use these special capabilities to create value for customers and other stakeholders. To make a clear distinction between the two, we should give examples of companies that employ both e-commerce strategies. For B2C, we can say that Wal-Mart has their website in the B2C category because they are offering finished products to their customers. In the case of the B2B, we could clearly exemplify what Cisco is doing because they are selling parts of computers and machines to companies that need them.
We can say also that some companies can work both ways. For marketers, it is vital to understand in which environment their organization operates—either in B2B or in B2C (or perhaps a combination of the two), as there are significant differences. Businesses in one area or the other employ different tactics, electronically speaking. For example, businesses participating in B2B e-commerce are taking advantage of electronic marketplaces, or e-marketplaces. B2B e-marketplaces are virtual marketplaces in which businesses buy and sell products, share information, and perform other important activities.
B2B e-marketplaces include many variations such as vertical e-marketplaces, horizontal e-marketplaces, value-added network providers, and many others (Haag et al. 2005). Haag et al. (2005) also informed that B2B e-commerce is where all the money is right now, accounting for approximately 97 percent of all e-commerce revenues. Business organizations have realized that there are tremendous efficiencies and potential savings from innovations in doing business electronically.
Businesses can shorten cycle times and reduce costs in the supply chain. They can more effectively reach a wider audience of potential customers (other businesses, in this case). Thus, in marketing for B2B, we must concentrate more on how much efficient for companies to buy from us and the savings they will get when they do business with us. In B2B e-commerce, marketing mixes do not usually include broad and generic strategies that reach all potential businesses. Instead, marketing often occurs within the context of an e-marketplace.
Once a contact has been made between businesses, the development of the relationship is still formal and often includes negotiations for pricing, quality, specifications, and delivery timing. On the contrary, consumers in the B2C e-commerce business model tend to deal directly with a chosen business on the Internet. That is, consumers usually surf the Web evaluating products and services at numerous separate e-commerce websites until they eventually choose one distinct site from which to make a purchase. That is not to say that consumers don’ have access to or use e-marketplaces.
eBay is a good example of an e-marketplace for consumers, where you can buy and sell just about anything you want. As an e-marketplace, eBay brings together many buyers and sellers, offering chat rooms, discussion boards, and a variety of other consumer-centric services. In marketing for B2C, we must target a particular group who will benefit more with our products. In B2C e-commerce, Haag et al. (2005) suggested marketing strategies that will be effective: 1. Registering your site with a search engine.
2. Online ads (small advertisements that appear on other sites), including pop-up ads (small Web pages containing an advertisement that appear on your screen outside the current Web site loaded into your browser) and pop-under ads (a form of a pop-up ad that you do not see until you close your current browser session).
3. Viral marketing —encourages users of a product or service supplied by a B2C e-commerce business to encourage friends to join in as well.
4. Affiliate program —arrangement made between two e-commerce sites that directs viewers from one site to the other.
No doubt, investors around the world bought the hype surrounding the Internet and e-business models that appeared to have no hope of a profitable future. The market capitalizations of many Internet firms soared until they greatly exceeded that of successful and profitable businesses in the physical world. Janal (1998) presented numerous benefits that e-commerce can instigate towards consumers:
- Convenience. Consumers can order goods 24 hours a day without wasting valuable time traveling to and from retail outlets.
- Information. Consumers can access a great deal of information about companies, products, competitors, and prices without leaving home.
- Fewer hassles. Consumers do not have to deal with difficult salespeople, open themselves to persuasive and emotional factors, or wait in long lines. Along with these benefits, we can even add additional benefits like customers can be presented with a wider array of product selection and they have the power to choose products with lower prices, without much hassle.
For marketers to be successful in their venture in e-commerce, they must be able to define exactly the products and services you provide, who the target customers are, and how your customers perceive the use of these products and services within their business activities (for the B2B model) or in their personal lives (for the B2C model). In order to create strategies that will help us gain a competitive advantage, we must clearly articulate the nature of our products and services, customers, and the value that our customers place on the products and services that we are selling.
Haag, S. , Cummings, M. , McCubbrey, D. J. (2005). Management Information Systems for the Information Age, 5th ed. NY: The McGraw-Hill Companies. Janal, D. S. (1998).
Online Marketing Handbook 1998 Edition: How to Promote, Advertise and Sell Products and Services on the Internet, New York: John Wiley. McLeod, R. (2007).
What is the difference between B2C and B2B? Retrieved June 23, 2008, from http://www. theallineed. com/business/07062081. htm.