B2C and B2B markets: Similarities and differences
In the ever-changing world of marketing, it is crucial to understand the fundamental differences between business-to-consumer (B2C) and business-to-business (B2B) markets. Imagine these markets as two distinct ways of doing business, each with its own set of customer behaviors, communication methods, decision-making processes and rules of engagements. What is applicable in B2C might not be suitable for B2B. Let’s take a closer look at what these consumer and business markets have in common and where they differ.
Similarities
- B2C and B2B have similar characteristics as they both need to:
- Identify and understand their target market: Whether it’s their primary or secondary target market, both types of markets must know whom they are trying to reach.
- Demonstrate value to their target market: Showing how their products or services are relevant, unique and believable to their target audience is crucial for success.
- Identify their channel: Knowing where and how to deliver their offerings to customers is essential.
- Communicate effectively: Clear communication with the target market is vital for building relationships and winning sales.
- Build customer loyalty: Both types of markets aim to create strong bonds with their customers.
- Outperform competition: The need to compete successfully to thrive is an indispensable ingredient to longevity.
- Earn trust: Being trustworthy is fundamental to becoming a respected brand or seller.
- Set pricing: Developing a pricing scheme that makes sense for their target market is essential.
- Achieve profitability: Both markets aim to be profitable.
Differences
Now let’s explore the significant differences between these two markets.
The table here lays out the many differences between B2C and B2B markets. For instance, in terms of demand, the consumer market is driven by direct demand compared with the derived and fluctuating demand for the business market.
In B2B, in the case of a plastic manufacturer supplying components for refrigerators, demand depends on the needs of the business clients. This can fluctuate as it is highly dependent on the demand for refrigerators manufactured and sold by the refrigerator manufacturers. There will be times when order volume is higher in anticipation of peak season volume like summer or Christmas, while reorders for lean season would be much less.
In terms of the buying center (or the decision-making unit), there are instances when many people can take part in the final buying decision—not just the buyer. In the consumer market, such as a family going on vacation, there could be an initiator (like the daughter), an influencer (the brothers), a decider (the mother), a buyer (the father) and the users (the entire family).
On the other hand, it is more complicated in the business market. As an example, when purchasing a salesforce training program, the initiator may be a regional sales manager. Users are key account managers; influencers could come from the human resource (HR) department; the decider is the national sales manager; the approver is the general manager; the buyer is the purchasing manager while the gatekeeper is the executive assistant to the HR manager.
In closing, one overarching principle that shines like a guiding star is the importance of tailoring your marketing strategy to the type of market being navigated.
Whether it is the consumer market driven by emotions or a network of businesses fueled by rational decision-making, acknowledging and adapting to these differences would be the key to success. There is no one-size-fits-all solution. Always consider the target audience, their needs, behaviors and preferences, and align the marketing approach accordingly.
Josiah Go, chair and chief innovation strategist of Mansmith and Fielders Inc., marketing anthropologist Chiqui Escareal-Go and digital marketing consultant RG Gabunada will launch their book “Marketing for Beginners” on Oct. 11, 6 p.m. at the East Wing of Shangri-La Mall, Mandaluyong. It is open to the public. RSVP via [email protected]. The 2nd Mansmith B2B Summit is scheduled on Oct 18. Email [email protected].
