Difference Between B2B and B2C

B2B and B2C are the two popular business marketing models upon which every industry is based. Every business, whether manufacturing or retail, is either a B2B company or a B2C company. Marketing basically refers to process of promoting products and services through a channel. B2B stands for business to business whereas B2C stands for business to consumer. If a business sells its products or services to another business, it is a form of B2B transaction. And if a business sells its products or services directly to the consumer, then it is called a B2C transaction.

What is B2B (Business to Business)?

B2B, short for Business to Business, is a business model or a business transactional model that operates by selling its products to other businesses. This is a situation where one business performs a commercial transaction with another business. B2B market is vast and includes everything from industrial suppliers to payroll processes to software developers. B2B companies exist in every industry and B2B transactions occur under three circumstances: when a business source materials, when a business source services, and when a business is sourcing and products to resell. There are significantly more B2B transactions than B2C, because for every B2C transaction, there are like dozens, hundreds or even thousands of B2B transactions involved.

What is B2C (Business to Consumer)?

B2C, short for Business to Consumer, is a business model that operates by selling its products or services directly to consumers, rather than selling to businesses. B2C is something most people think about when they see an advertisement on television or hear something on the radio or come across something online. When you purchase something online, it is a business to consumer exchange. It is a transaction between a business and consumers or end-users. B2C marketing focuses on the value of the product as well as invokes some sort of emotional response from the consumer. B2C focuses on more but smaller consumers and most of the B2C transactions still occur through common channels.

Difference between B2B and B2C

Definition

 – B2B simply means business to business and it refers to a business model that operates by selling its products or services to other businesses. B2B is an exchange of goods and services between two businesses. This is a basically a situation where one business performs a commercial transaction with another business. B2C means business to consumer and it is a business model that operates by selling its products or services directly to consumers, rather than selling to businesses. It is a transaction between a business and consumers or end-users.

Client Relationships

 – B2B markets are typically smaller than B2C markets. B2B marketing is more about the consumer than the product itself, so the focus tends to be on the logic of the product and its features. Entrepreneurs need to build strong relationships with relatively small number of companies, so trust and stability become strong suites in B2B marketing. B2C is selling directly to consumers, so the focus is more on the product and its benefits than the consumers. B2C marketing focuses on the value of the product as well as invokes some sort of emotional response from the consumer.

Return on Investment

 – Businesses operate on three core goals: to increase revenue, to minimize operational costs, and to encourage customer satisfaction. Unlike consumers, businesses tend to have a different mindset when buying a new technology. Businesses are built on the expectation of ROI. ROI estimation is a crucial factor in the B2B ecosystem and it is one of the key points in any kind of sale that is based on the B2B model. Consumers are more interested in the product and how it looks or feels. Consumers love novelty whereas businesses see it as an investment opportunity.

Marketing Strategy

 – B2B marketers emphasize on the quality, pricing and other economic aspects that might be of interest to the consumer. B2B markets tend to be more planned, organized and controlled. Every sales-driven B2B marketing strategy is based on three key elements: lead generation, demand generation, and retention strategy. The idea is to create interest in your product, convert that interest into action, and then making one-time consumers into permanent consumers. B2C marketing campaigns are directed at consumers and they work by helping businesses identify their target audience. The idea is to identify potential leads, not necessarily buyers, and turning those leads into customers.

Decision-Making 

– In B2B markets, the decision making is a complex process that involves multiple employees, each specializing in a field of their own and the so-called decision makers are responsible for their decisions and they should be held accountable for their actions. Sometimes for a big purchase, the approval of stakeholders is required, some if not all, and the consumer may not even have the decision making authority. In B2C markets, the consumer is the decision maker and he/she may consult family, friends, so it hardly gets complicated than that.

B2B vs. B2C: Comparison Chart

Summary of B2B and B2C

Although, B2B marketing comprised roughly half the economy, top-tier marketing focuses on B2C businesses. B2C has far more benefits than B2B, including greater product variety and greater convenience for both consumers and opportunity-seeking businesses. Both are great marketing strategies but they differ significantly in terms of how they advertise their products and the decision making process. B2C campaigns are more consumer-oriented so the target is always the consumer which is the decision maker. B2B marketing, on the other hand, involves a handful of individuals within the organization, who are the decision makers.

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