B2B vs. B2C E-commerce Distinctions
Nowadays, companies use websites for various kinds of electronic commerce. Among the most popular and the most widely used kinds of this commerce are business to business (B2B) and business to consumer (B2C).
Business to business sites are used by one company for interaction and communication, promotion of goods and services and making business directly with other companies (Intel). Business to consumer is used for company’s promotion interaction with the end consumers of its products and services (Amazon, IKEA, Hoskin interiors). These types of electronic commerce and electronic business use almost the same marketing programs. These programs include Internet marketing initiatives and direct marketing, public relations and various advertising, word of mouth and alliances. However, the purchasing motivation of these types of commerce differs greatly. This difference is connected with the fact that business to business companies and business to commerce companies have various needs and necessities when it comes to the information that companies need for making purchasing decision (B2B vs. B2C marketing – the difference and why it matters).
Production and services presented by business to business e-commerce are usually focused on a particular target market and target customers. This kind of commerce offers large amount of similar production for satisfaction large needs of companies-partners. Examples of this production are: a software company, a medical billing service, a direct mail marketing service, a virtual assistant business, microprocessors (Intel sells microprocessors to Dell), etc. This production is some kind of raw materials, which most probably would be used in a manufacturing process for creation of a final product or providing a final service. So, business to business represents some kind of commerce transactions between manufacturers and wholesalers.
Production and services provided by business to consumer electronic commerce are more differentiated. They are directed to satisfy unique needs and wishes of different customers as well as provide unusual and personalized services. This kind of electronic commerce offers small amount of differentiated production.
The overall volume of business to business production is much higher than the overall volume of business to consumer production, as the first type of electronic commerce is directed on large-scale and multilevel manufacturing. In a common supply chain, there are a lot of business to business transactions involving sub components (such as raw materials, products and services) and, at the same time, only one business to consumer transaction – specifically sale of finished products to the end consumer. For example, manufacturing of furniture is the process with a very complicated supply chain. Different companies cooperate with each other for making wood (or substitution material), fixing materials (bolts, screws, etc.), and transportation of these materials to the factory, creation an attractable design and many other supporting functions. Majority of these companies have their own web sites describing their services and providing necessary information for current and possible partners (characteristics of used equipment and etc.). At the same time, business to consumer company just represents the final furniture to the end customer, describes its main characteristics, cost, terms of delivery and payment for this furniture.
It is notable, that almost any business to consumer product can be used as business to business product. For example, electric equipment sold on the business to consumer web sites can be bought by big companies in a large amount for their manufacturing process. In the same time not all of the business to business products can be useful for consumers. Infrequent consumer will buy microprocessor for his or her laptop. So, production and services offered on business to business sites are more specifically oriented.
Cost of sale of production and offering of services has a great range on business to business sites and business to consumer sites. Usually business to business companies offer high cost production and services (from a few hundred dollars to millions of dollars per unit). Their price makes them available to companies and corporations. When the cost of production and services on business to consumer sites range from a dollar to a few thousand dollars, then these products are affordable to an average person.
Purchasing decisions of users of business to business web sites differs greatly from a purchasing decision of users of business to consumer sites. The first type of users are oriented on and directed by generally driven necessities and budgets. Therefore, their decisions are mostly rationale and suspended. The second type of users is tend to make their purchasing decisions on their personal wishes and wants in more extent than on their actual needs and available budgets. These purchasing decisions are mostly emotional. The main objective of business to consumer companies is to aggressively convince prospective customers and possible buyers to make purchasing decision towards offered production and services.
Both business to business companies and business to consumer companies use social media. However, the purposes of these kinds of commerce are different. Business to business companies use social media for connection with business partners, when business to commerce companies use it for connection with final consumers. Different purposes lead to use of various means of social media in different manners. Business to consumer companies have the aim to use various marketing campaign for maximum possible publicizing of offered goods and services. These marketing campaigns include offering vouchers, coupons, e-mail blasts, limited edition offers, banner advertising, etc. As it was mentioned above, these means of advertising are directed on induction of purchasing decision of customers. Marketing campaigns used by business to consumer companies are short lasting. They are directed on quick securing of people’s interest (Barish, 2013).
Business to consumer web sites are simple for use of common customer. Companies make these sites not very complicated in use for shortening and simplification of the path to purchase. Usually it consists of several clicks from receipt of information about proposed production or service to confirmation of the order and purchasing of this production or service. When the purchasing path between receiving the information about the product or service to ordering it is very long and complicated, consumers abandon purchasing process and the web site becomes unsuccessful and unprofitable. So, purchasing process of business to consumer production and services is rather short and usually takes from several minutes (in the case of impulse buy) to several days.
Business to consumer companies also direct their actions on increasing consumer’s loyalty. For example, some companies provide email campaigns, which describe special deals and discount programs for consumers.
On the sites of business to consumer companies people can find explanation of offered production and services, use on-line help (if they need) and find telephone numbers of these companies. Also, these sites provide very thorough information concerning the way of delivery of offered production and the way and time of its transportation.
Efforts of business to business companies are directed on building strong reliable and long-lasting relationships with other companies. This kind of electronic commerce is focusing on maintaining communication and interaction.
In business to business electronic commerce purchasing represents a long lasting and complicated process, because of high cost and value of production and services. Usually purchasing decision takes place after some communication and clarification, evaluation and analysis by a group of people. So, purchasing process of business to business production can often be defined in months. The sale itself can be also a complex process and can take additional time.
Newsletters of business to business companies are usually direct and professional. They create a vision of reliability and professionalism of the company. Such letters have the aim to encourage the audience to work with a business to business company. The content of these letters is usually strait to the point. It includes landing pages for convenient navigation, information concerning benefits and features, offered prices on products and services and contact details. On the web sites of these companies, one can easily find the address of official subsidiaries or offices, list of their long-term and the most valuable events of the company. These types of companies involved in the electronic commerce pay much attention to protection and securing of private information of business partners.
Business to business companies usually use such means of social media as direct mail, telemarketing and personal communication via business representatives. Selling process is usually supported by various consultations (Barish, 2013). Selling itself is grounded on investigation and understanding needs and wishes of other companies, building relationships and trust.
The value of brand of business to business electronic commerce companies and business to consumer electronic commerce companies is created by different ways as a result of various target audiences and production represented by them. The value of brand of business to business companies is based on personal relationships and consultations during the selling process. The value of brand of business to consumer companies is created by means of social media and advertising campaigns.
Delivery of goods and rendering services ordered by business to consumer web sites usually do not take much time, when delivering of goods and services ordered by business to business sites can be a long lasting process, because of a big amount of ordered production, its unique features and complexity of offered services.
Business to business and business to consumer types of electronic commerce have numerous differences. Majority of them are connected with different target audience and offered production.
Business to consumer sites are popular among common people. So, the amount of users is much bigger than the amount of users of business to business sites. However, the cost of sold production and offered services is higher on business to business web sites, because of higher value of them.