B2B vs. Consumer Marketing

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

Abstract

This report discusses how to meet the needs of your customers when the customer is another

business. Business to Business (B2B) marketing is unique in its strategic application than

Business to Consumer (B2C) marketing. The goal of the B2B marketing strategy is to form

lasting relationships. The differences between B2B and B2C marketing strategies will be

demonstrated and the importance of capitalizing on these differences. Of course the ethical

challenges faced by your company will be addressed and how to remain ethical while trying to

make the transition from B2C to B2B. This report will also depict how a penetration strategy will

help your organization form long-lasting business relationships.

Keywords: B2B, B2C, penetration strategy, ethical challenges, marketing strategy


B2B VERSUS CONSUMER MARKETING

When it comes to the selling and marketing of a company’s product/service, the bottom

line is meeting the needs of the customer. Whether the sell is to another business or individual

consumers, the seller must keep in mind that when the needs are met the company remains in

business. The marketing tactics used when the sell is B2B (business to business) are slightly

different from those used when selling to individual consumers. The seller must appreciate and

recognize the technical, commercial, and behavioral complexities involved when marketing to

organizations (Honeycutt et al., 2001). The relationship developed during the marketing tactics

of B2Bs is one that is lasting in nature. This being the case it would profit a company well into

the future to form lasting relationship with potential customers.

A way to accomplish this would be in using the penetration strategy. “A penetration

strategy would mean that the respective company attempts to conquer large markets with low

prices (Barschel, 2004). The consumer strategy would differ because the company would use a

skimming strategy. The skimming strategy allows for the pricing of goods/services to be priced

in such a way that the consumer’s surplus would be eliminated (Barschel, 2004). Although both

strategies are used to attract and keep customers, one is designed to keep the customer by selling

in bulk reducing the saving the customer enough money to remain loyal customers. Consumers

in the skimming strategy do not necessarily buy in bulk. They are attracted to lower prices

temporarily due to surplus in a product.

Another strategic difference is in advertising or promotional tactics. For B2C the usual

medium is television. Television advertisements usually will capture the consumer’s attention

using a higher perceived value of the product (Barschel, 2004). On the other hand, direct

marketing has been found to be quite effective for B2B sells. The media used to attract a


consumer in this instance would be telephone, e-mails, and catalogs. The B2B contact is more

formal and uses figures along with facts to grab the consumer’s attention.

The distribution strategy is quite different between the two. The distribution process is

crucial to the relationship in a B2B. It could make or break the deal between the two. The

amount of product needed in the B2B relationship is substantially larger than a B2C and the

stakes are much higher if delivery is interrupted. “Distribution channels of B2B are often based

on long-term contractual relationships (Barschel, 2004).” There has to be constant

communication and coordination to ensure satisfaction among both parties (Barschel).”

The final strategic difference is in the packaging of a product. Packing consists of 5 major

functions 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’s

is used as a tool for sales promotion and information relaying nutritional facts for instance. In

today’s trend of nutritional value for food products, the packaging becomes crucial in promoting

the sell. In B2B this type of strategy is not needed because the decision to purchase is made in

the contractual agreement and the needs of the consumer have been predetermined.

Therefore, because of the nature of the relationships between B2C and B2B, the strategies

would indeed be distinct. The B2C relationship is oftentimes not long term and is based upon


immediate gratification whereas; the B2B relationship is long-term based upon the consumer’s

satisfaction. 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 of

contracts to vendors. Businesses must make sure that when making contractual decisions a third

party can look at the decision and no impartiality or favoritism. This can become challenging

when contracts to vendors are given to most of them. The ramifications can be detrimental both

internally and externally. Therefore, when contracts and vendors are involved companies should

already have a policy in place for awarding contracts regardless of the bidder’s relationship with

the company. For instance, it may be company policy to award contracts based solely on the

certain predetermined criteria. The criteria can be whether the bidder has the lowest bid

accompanied by the reputation for quality work. Therefore, if a vendor falls into the criteria

needed to be awarded a contract the company will not appear biased. This will also keep the

company in an ethical light to third parties.

Finally, according to author Alan R. Malachowski, “Ethical issues can arise in respect of any

and all activities, including contracts (Malachowski, 2001).” With this in mind, companies must

take extra care in their business practices and policies. Any signs of unethical behavior should

be reviewed and procedures revised to eliminate suspicion of unethical behavior. I believe

vendors should be given the same opportunities to be awarded contract based upon

predetermined criteria of the company.


REFERENCES

Barschel, 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.