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B2B and B2C: Targeting the Right Audience

B2B B2C Business strategy
6 Minute
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by Melanie

Posted 04/12/2017

A marketing strategy is a crucial prerequisite for success, no matter what business you’re in - whether retail, wholesale or even the service sector. A good marketing strategy will depend on the buyer set and the product - what works well for one business may not work at all for another.

Marketing consumer products is typically quite different than selling inventory stock such as raw materials or industrial goods. Business to consumer marketing involves a focus on connecting with customers and, in particular, creating a perception of value and quality.

On the other hand, business to business marketing typically involves a focus on practical solutions, low pricing and reliability.

B2C targeting B2B and B2C targeting should be approached differently, as they represent different customer types and needs.

B2B and B2C markets - what are they?

Business and consumer sales overlap significantly, particularly for small businesses who often buy inventory stock that is not needed in bulk from the same retailers as consumers. Firms who produce items that are used in business as well as domestically are therefore likely to engage in B2B as well as B2C marketing.

That said, some markets are clearly B2B or B2C; very few households are likely to purchase industrial machinery or raw materials.

Picturing a value chain can be a useful way to differentiate between B2B and B2C markets. A firm producing snack bars and salty snacks is likely to participate in a number of B2B markets, both as a buyer and a seller.

The firm purchases inventory stock from suppliers (who themselves participate in B2B markets). It then transforms these ingredients into a finished product which it sells via a distributor (another series of B2B markets). Consumers buy the products in supermarkets (B2C) and, in small quantities, direct from the manufacturer (B2C).

How does B2B and B2C targeting differ?

Rightly or wrongly, a number of entrenched stereotypes exist about B2B purchasers.

The B2B market is typically considered to be more ‘rational’ than the B2C market; consumers are understood to take into account a wide range of considerations including emotional appeal and lifestyle factors when purchasing products, whereas businesses have a more clear-cut decision-making framework when procuring inventory stock.

For this reason, B2B marketing tends to revolve around price, durability, supply chain reliability and lead times - all factors that directly affect a business’ productivity or profitability.

On the other hand, firms marketing to consumers focus on factors such as value, fashionability or convenience. These factors can vary widely between market segments and demographics. Creating a consumer focussed marketing strategy is typically a much more complex endeavour than a marketing plan for business sales.

On the other hand, knowing exactly who to pitch to in a B2B setting can also be difficult. Procurement is rarely a single-person task; as the value of a transaction or relationship increases, the number of internal approvals required also tends to increase.

Some of these approvals, such as finance and legal, do not have any real implications for marketing.

B2C targeting strategy B2C targeting involves reaching out to consumers - not businesses - so the approach must be personal.

Target audience

B2C retailers tend to have a broad target audience in mind.

The products these target audiences are interested in, tend to be relatively low in value and as such, the decision-making process preceding a purchase can be quick and impulsive.

On the contrary, the target audience for B2B retailers will tend to be a lot more specific where the buyers know exactly what they want, and any purchasing decisions take time and are reviewed by a team of people.

Nevertheless, selling products to a large firm can involve securing the approval of subject matter experts (i.e. your real clients), procurement professionals and even the firm’s executives or board.

Methods of payment and business model

B2C buyers will often pay for their purchases at the time of sale via approved methods such as credit card or PayPal. This is quite straightforward, ensuring all funds are received upfront prior to the fulfilment of orders with product.

The method of payment for B2B buyers is far more convoluted as orders can be received via email, document or electronic ordering form.

Therefore, the system you use must be able to recognise and translate these into the same format so they can be integrated into the accounting, manufacturing and inventory management systems.

Similarly, the payment for B2B buyers is different where it is usually on an account-basis requiring payment on a set date of the month or after a set time-frame rather than being at the point of sale.

Individual prices of products

The prices of products being purchased by B2C customers tend to be lower in individual value. Therefore, to generate similar levels of profits to B2B companies, they must sell more of their products to each buyer or have more buyers.

The products being sold by a B2B company tend to be a lot higher in value and therefore it is not uncommon for a B2B company to have as few as tens or hundreds of customers, each making purchases worth more in value.

In fact, studies have shown that the global gross purchases for B2B companies exceeded that of B2C companies in 2017, and the average purchase value for B2B transactions was found to be at least three times more than that of B2C transactions.

Speed and efficiency of purchasing decisions

The B2C customer tends to only consider themselves, their needs and their own desires in the decision-making process to complete a purchase.

This lack of outside influence means the process is quick, efficient and possibly even impulsive. On the other hand, the typical B2B buyer must run their purchasing decisions by a total of 6.8 other people before the transaction can be completed.

Not only does this sound like an inefficient process with regards to actually completing a purchase, but studies show that indeed the number of people involved in the purchasing decision is directly inversely proportional to the likelihood of a purchase.

To be specific, the more people involved in the process, the less chance there is of a purchase being made.

Marketing tactics

A B2B business who offers products and services to other businesses, will need to establish credibility in the eyes of the buyer. Marketing resources should be invested into materials that are specifically targeted to your business clients and that offer them everything they need to make a reasoned and logical buying decision.

Marketing content should be educational, it should provide detailed information and expertise to assist business clients and help them to determine the value of your product or service. Quality materials should be supported by testimonials and other activities that help to build trust.

In a B2C business, you need to understand what motivates your buyer behaviour and the characteristics that drive their purchasing decisions. Create captivating marketing tools that build brand awareness, enhance their comfort in buying from you, and project quality service and best price.

Melanie blog profile picture

By Melanie

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.