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Running head: B2B VERSUS CONSUMER MARKETING 1 B2B VERSUS CONSUMER MARKETING® Cynthia Brown, Owner CyntCoding Health Information Services Today’s Premiere Coding Company® August 25, 2012
B2B VERSUS CONSUMER MARKETING 2 AbstractThis report discusses how to meet the needs of your customers when the customer is anotherbusiness. Business to Business (B2B) marketing is unique in its strategic application thanBusiness to Consumer (B2C) marketing. The goal of the B2B marketing strategy is to formlasting relationships. The differences between B2B and B2C marketing strategies will bedemonstrated and the importance of capitalizing on these differences. Of course the ethicalchallenges faced by your company will be addressed and how to remain ethical while trying tomake the transition from B2C to B2B. This report will also depict how a penetration strategy willhelp your organization form long-lasting business relationships. Keywords: B2B, B2C, penetration strategy, ethical challenges, marketing strategy
B2B VERSUS CONSUMER MARKETING 3 B2B VERSUS CONSUMER MARKETING When it comes to the selling and marketing of a company’s product/service, the bottomline is meeting the needs of the customer. Whether the sell is to another business or individualconsumers, the seller must keep in mind that when the needs are met the company remains inbusiness. The marketing tactics used when the sell is B2B (business to business) are slightlydifferent from those used when selling to individual consumers. The seller must appreciate andrecognize the technical, commercial, and behavioral complexities involved when marketing toorganizations (Honeycutt et al., 2001). The relationship developed during the marketing tacticsof B2Bs is one that is lasting in nature. This being the case it would profit a company well intothe future to form lasting relationship with potential customers. A way to accomplish this would be in using the penetration strategy. “A penetrationstrategy would mean that the respective company attempts to conquer large markets with lowprices (Barschel, 2004). The consumer strategy would differ because the company would use askimming strategy. The skimming strategy allows for the pricing of goods/services to be pricedin such a way that the consumer’s surplus would be eliminated (Barschel, 2004). Although bothstrategies are used to attract and keep customers, one is designed to keep the customer by sellingin bulk reducing the saving the customer enough money to remain loyal customers. Consumersin the skimming strategy do not necessarily buy in bulk. They are attracted to lower pricestemporarily due to surplus in a product. Another strategic difference is in advertising or promotional tactics. For B2C the usualmedium is television. Television advertisements usually will capture the consumer’s attentionusing a higher perceived value of the product (Barschel, 2004). On the other hand, directmarketing has been found to be quite effective for B2B sells. The media used to attract a
B2B VERSUS CONSUMER MARKETING 4consumer in this instance would be telephone, e-mails, and catalogs. The B2B contact is moreformal and uses figures along with facts to grab the consumer’s attention. The distribution strategy is quite different between the two. The distribution process iscrucial to the relationship in a B2B. It could make or break the deal between the two. Theamount of product needed in the B2B relationship is substantially larger than a B2C and thestakes are much higher if delivery is interrupted. “Distribution channels of B2B are often basedon long-term contractual relationships (Barschel, 2004).” There has to be constantcommunication and coordination to ensure satisfaction among both parties (Barschel).” The final strategic difference is in the packaging of a product. Packing consists of 5 majorfunctions of a product (Barschel, 2004): 1) Package as an essential part of product quality. 2) Package as protection during transportation. 3) Package as a unit of measurement. 4) Package as medium of sales promotion. 5) Package as a carrier of information. The differences in strategy usually fall under categories 4 and 5 (Barschel, 2004). In B2C’sis used as a tool for sales promotion and information relaying nutritional facts for instance. Intoday’s trend of nutritional value for food products, the packaging becomes crucial in promotingthe sell. In B2B this type of strategy is not needed because the decision to purchase is made inthe contractual agreement and the needs of the consumer have been predetermined. Therefore, because of the nature of the relationships between B2C and B2B, the strategieswould indeed be distinct. The B2C relationship is oftentimes not long term and is based upon
B2B VERSUS CONSUMER MARKETING 5immediate gratification whereas; the B2B relationship is long-term based upon the consumer’ssatisfaction. Strategies are designed for either short term relationships (B2C) or long-term (B2B). Another topic of interest is the ethical challenges that businesses face in the awarding ofcontracts to vendors. Businesses must make sure that when making contractual decisions a thirdparty can look at the decision and no impartiality or favoritism. This can become challengingwhen contracts to vendors are given to most of them. The ramifications can be detrimental bothinternally and externally. Therefore, when contracts and vendors are involved companies shouldalready have a policy in place for awarding contracts regardless of the bidder’s relationship withthe company. For instance, it may be company policy to award contracts based solely on thecertain predetermined criteria. The criteria can be whether the bidder has the lowest bidaccompanied by the reputation for quality work. Therefore, if a vendor falls into the criterianeeded to be awarded a contract the company will not appear biased. This will also keep thecompany in an ethical light to third parties. Finally, according to author Alan R. Malachowski, “Ethical issues can arise in respect of anyand all activities, including contracts (Malachowski, 2001).” With this in mind, companies musttake extra care in their business practices and policies. Any signs of unethical behavior shouldbe reviewed and procedures revised to eliminate suspicion of unethical behavior. I believevendors should be given the same opportunities to be awarded contract based uponpredetermined criteria of the company.
B2B VERSUS CONSUMER MARKETING 6 REFERENCESBarschel, H. (2004). B2B Versus B2C Marketing-Major Differences Along the Supply Chain of Fast Moving Consumer Goods (FMCG). Norderstedt, Germany: Druck and Bindung, Books on Demand.Honeycutt, E.D., Morris, M.H. & Pitt, L.F. (2001). Business-to-Business Marketing: A Strategic Approach. Thousand Oaks, CA: Sage Publications, Inc.