The whole area of sales of all kinds of goods and servicesIt is usually divided into two large segments. The first is B2C, the second is B2B. Quite often, having encountered these abbreviations, many people ask: B2C - what is it? Or what is B2B? So let's see.
B2B Market Description
If you literally translate the transcript, you get"business to business", from the English business to business. The term B2B refers to any business focused on the sale of goods or services for other businesses. As an example, wholesale bases that sell their goods in large quantities, trade organizations representing large manufacturers and acting as sellers, etc. So, B2C market - what is it, what is B2B and what are their differences?
B2B market characteristics
For sales in this market segment is characterized by a number of features. Among them are:
- Scope. B2C is focused on sales for business,therefore, companies operating in this segment are more interested in wholesale sales than retail. With a low cost of goods (compared to the one offered to the end consumer), these companies make large monetary turnovers due to the volume of all kinds of products. A vivid example is the wholesale bases and dealer companies.
- Limited market If you compare the number of buyers in the retaila market with a number of potential consumers in a business-oriented market, we can conclude that the latter is many times lower in numbers than the first. Naturally, this fact increases competition in the B2B segment and requires completely different approaches to customers than the B2C market.
- Weighted decisions. Unlike the average buyer, practicallyevery businessman approaches to any purchases for his business very strictly. This is primarily due to the high risks. Suppose you can buy a batch of new product, but it will not be in demand from consumers. Or, for example, buy a production line, and it will issue a marriage. In fact, there are many such risks. And a businessman should take them into account, especially since the financial and time costs for purchasing goods in the retail market vary considerably.
B2C - what is it
With a business-oriented market, is it moreless understood, go to the segment, focused on the consumer. So B2C - what is it? In English - business to customer, and translated into our native - "business for the buyer." If you compare it with a sales-oriented business segment for sellers, you can see that these concepts are radically different.
Key business features for customers
- Range. Typically, retail salespeopletrade, trying to cover as much of the market as possible. This is done by maximizing the range of products sold and the services provided. Perhaps the most striking example of B2C is supermarkets. In such stores, consumers can purchase almost everything they need. Plus get additional services, such as delivery, configuration and installation of household appliances.
- Customer value In retail, the value of one customer is notvery large, since the main money supply is due to sales for different consumers. Therefore, the B2C segment is focused on the needs of the market as a whole, and in rare cases takes into account the needs of an individual. As a visual example, you can take any consumer goods, for example, bread. This product has all the features that can attract the maximum number of buyers. And if one person wants to buy bread with a taste of mint, it is unlikely to succeed. And no plant will make one loaf just to satisfy the need of one customer instead of thousands. And vice versa: for example, for some reason, the owner of a supermarket decided that the bread with mint flavor would diverge with a bang. He negotiates with suppliers - and they make him a trial batch of such bread. Naturally, for such experiments the volume should be large. The situation, of course, is rather unnatural, but, nevertheless, one can understand from it how different are the methods of promoting goods in markets with a business and consumer orientation.
B2C: courier delivery
Like the commodity market, the B2C services marketdifferent from B2B. This applies to all areas of business. For example, B2C - courier delivery. Focusing on the consumer market obliges the carrier company to have a very wide warehouse network, as well as transport. This is necessary because the company needs to reach the maximum audience and create the best conditions for customers.
Combining markets
If you look closely at manybusiness, especially large, it can be understood that in a certain place there is a clear distinction between the two types of promotion of goods. The natural desire of the owner of any enterprise is to get more profit, and if an opportunity is given to get an additional portion of customers, no one will refuse. A good illustration would be all kinds of building materials database. Or dealerships that distribute products to outlets.
An example of a company that works with different markets.
Рассмотрим пример:There is a small organization engaged in the production of metal products. In its work, this company uses paint products. The owner purchases it in construction stores or at construction bases, since there are small volumes for purchasing goods directly from the manufacturer. Alternatively, this owner can find an organization that has a dealership agreement with factories and which distributes their goods to the same hardware stores. Given that such companies have a so-called minimum order, for example, $ 100, ordinary consumers are automatically eliminated. But for the owner of a small business, this amount is quite acceptable, given that he uses these products in the production process. Working with a dealer company, he receives substantial savings, since in this case the price he pays for the product is almost equal to the purchase price of any store.
In this case, the small business owner.It appears as a small consumer, since the volume of its purchases is much smaller than that of stores, and, nevertheless, it is able to take advantage of better conditions than other consumers.
The difference in approaches
What is the difference between B2B and B2C?There are quite significant differences between these two markets, although at first glance they are very similar. These differences lie in both marketing approaches and end-user goals.
The main differences of the market for consumers from the market for sellers:
- Weighted and rational decision-making about purchases. B2C is characterized by emotionality, the need to satisfy desires.
- Volumes. If an ordinary consumer makes a purchase in order to satisfy his needs, then a businessman buys to secure his business. Therefore, the volume of purchases can be huge.
- The price of the product. For the average consumer, the value of the goods playslarge role, but very often not decisive. But in the case of the B2B market, a difference of $ 1 per unit can result in tens of thousands in the whole lot, so great attention is paid to the cost of goods.
- Sales methods. If for the sale of B2C much attention is paid to mass advertising, then in sales in the B2B market personal contacts with customers and work with databases come to the fore.
Thus, we can conclude that corporate sales are significantly different from sales in the B2C market, that this is a division that requires completely different approaches and methods.
