Business-To-Consumer (B2C) is a marketing activity aimed at direct sales of goods and services to the consumer.
B2C Marketing Definition
Business to consumer model is a term designating the commercial relationship between an organization (Business) and a private, so-called, "final" consumer. The consumer buys the goods, in order to meet individual needs. The objects of interaction are a product or service, and the entities that sell the product (providing the service), on the one hand, and the private buyer, on the other. This system of relationships is one of the links in the chain of modern business processes, and this link builds direct, personalized business relations. B2C allows companies to conduct direct sales with a minimum number of intermediaries. Elimination of intermediaries makes it possible to establish competitive prices on the ground and even increase them, excluding the number of intermediaries, which naturally leads to an increase in margin trading.
B2C sales are a term that is often used to describe the activities of a retail business. B2C companies use special technologies of trade and marketing technologies, focused on the mass buyer, which are called retail technologies. Now with the development of innovations, it is possible to talk about B2C ecommerce technologies as well.
B2B vs B2C Marketing
The main differences between B2B marketing from B2C are justified directly by the differences between the professional and consumer markets themselves, starting from the average unit cost of goods, the motives and methods of making purchasing decisions, ending with the number of consumers in these markets, the ways of marketing communication and impact.
It is possible to distinguish the most significant differences between B2B marketing and B2C (although they are rather arbitrary since the tools used depend on specific companies, their size, financial strength, lifecycle stage and level of marketing training of managers and specialists):
- The value of B2B brands is created no longer by advertising, but by the quality of products, service support, direct work with customers and the fulfillment of contractual obligations.
- Direct personal sales.
- Building personalized relationships with customers.
- Creation of competitive advantages not only in the product but also in forms of cooperation (service and working conditions).
- In promoting the emphasis is not on food brands, but more on corporate (reputation and image of the supplier company are identified with the quality of the goods and vice versa).
- Marketing budgets are much less in B2B than in B2C.
- The overall level of marketing activity is lower than in B2C markets.
- Less aggressive promotion and obtrusiveness of advertising, the emphasis is more on PR.
- The degree of creativity is inferior to the pragmatism and simplicity of marketing messages (this is due to the practicality of the B2B target audience).
- The target audience is much narrower than in B2C.
- The service component and terms of cooperation are often significant competitive advantages.
B2B vs. B2C Marketing Example
For all B2C examples, the following logic is applicable. If the purchase was made through a retail store this is a B2C sale, then in another case, it could be B2B. On a formal basis, if the transaction is carried out as a sale between companies, this is a B2B sale. Accordingly, if the sale was in a retail store for cash, it is B2C. But, in fact, the introduction of these terms was intended to conduct macro segmentation, since the methods of working with segments of private buyers and organizations differ practically in all elements of the marketing mix, from the product to the marketing communications.
Distinctive Features of the B2C Marketing
B2C marketing is a set of tools for stimulating sales and promotion of goods in the B2C market, that is, in a market where the consumer (private person) who purchases goods for personal use is not involved in further commercial activities, so B2C marketing is still called consumer marketing. Also, B2C marketing serves for studying and analyzing the market, forecasting sales volumes, studying and stimulating demand. The main task of marketing in this area is attracting, retaining and returning customers.
B2C marketing means a short sales cycle, which requires a personal approach to consumers. Therefore, the achievement of the company's goals is possible through mass coverage of customers and a reduction in prices. At the same time, B2C marketing helps to maintain communication with consumers located at any distance from the company, which expands the geography of sales. It uses such ways of retaining and attracting new customers, like loyalty programs, discount programs, prize draws.
B2C marketing serves to find new motives for the consumption of goods, stimulates interest in the product from the target audience and helps the consumer to make a choice in favor of making a decision to purchase the goods. To accomplish this task, it develops a set of activities, an action program, through which interaction with consumers is established. Elements of such an interaction program are various promotional actions, presentations, distribution of flyers and leaflets, gifts, discounts, bonus packages, and consultations. Quite often, such a provocative method as the exchange of goods for a similar product of competing firms is also used. However, B2C marketing has drawbacks, including undervaluation of the retail price for the product, devaluation of the brand, as well as reducing the coverage of the target audience, since the audience accustomed to discounts and bonuses will wait for the establishment of next preferences.
Thus, it is possible to underline the following features of B2C marketing:
- the manufacturer of goods and services is focused on interaction with the end user;
- the consumer buys goods that satisfy individual needs, makes a decision individually;
- the buyer is not an expert in the goods;
- in addition to rational, the emotional component of the purchase is important;
- the cycle of the sale process is very short;
- the relatively low importance of an individual buyer for the business, but at the same time, a large effect has a scale effect, due to the massiveness of sales;
- the need to use mass communications;
- salespeople use the same type of solutions and "marketing blanks" in the sales process.