What Do B2B & B2C mean?

by Anam Ahmed - Updated October 10, 2018
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One of the most important aspects of starting a business is figuring out who your target audience is. When you identify who you’re selling to, it’s much easier to market to them effectively. B2B and B2C are common acronyms used in business today that refer to who the business sells their products or services to. B2B refers to business-to-business, which means that the organization sells their goods to another business for resale or their own use. On the other hand, B2C refers to business-to-consumer, which refers to a business selling their products or services directly to an end customer. When starting your business, it’s important to distinguish whether you are B2B or B2C because that will affect how you market yourself to your target audience.

B2B: Business-to-Business

The B2B market often involves transactions between a manufacturer and a wholesaler or a wholesaler and a retailer. Within the B2B format, there is generally a supply chain, and the products or services have multiple touchpoints at each business along the way to the consumer. As a result, the buying cycle of the business-to-business model is often longer than the business-to-consumer one, taking anywhere from days to years.

Business-to-business organizations can specialize in a specific industry, such as manufacturers of building materials that sell to construction companies or food wholesalers that sell to restaurants. On the other hand, B2B companies can also specialize in a specific area and sell to a wide range of organizations. For example, a B2B company can develop accounting software and sell to restaurants, wholesalers and retailers.

B2C: Business-to-Consumer

The B2C model involves a company selling directly to the end consumer through both brick-and-mortar retailers and online stores. Direct selling is also an example of B2C sales, which includes sales representatives marketing their products to their personal and professional networks. B2C transactions are shorter than B2B ones and can take anywhere from a few minutes to a few hours to conduct.

The B2C concept is one of the most popular and widely known sales models. Examples of the B2C market include restaurants, mall and market stores, online retailers and infomercials.

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B2B vs. B2C

The primary difference between B2B and B2C that small businesses need to keep in mind is how to market to each audience. By understanding your audience, you can better create messaging that resonates with them.

For B2B, it’s vital to remember that the purchasing decision is a complex one that may have multiple people involved. The purchasing manager of a car manufacturer may need to consult with the finance, engineering and sales teams before deciding to buy products from a new supplier. As a result, the marketing message needs to consider the various benefits the product can offer that company in those three areas. The message is more logical than emotional and needs to include both benefits for the company as well as benefits for the end consumer.

For B2C, the buying decision is a more emotional one, so the retailer needs to outline the benefits and the results of the product or service and help the customer see themselves after the transformation. If a salon is selling massages, for example, they will want to show the customer how relaxed and happy they will be after they have the massage to entice them to buy one.

B2B and B2C Marketing

The channels companies use to market their products and services will vary depending on whether they are B2B or B2C. Small business should outline the 4 Ps of marketing – product, price, place and promotion – based on who they are selling to

The elements of the promotional mix will also depend on who the audience is. Small business can choose from many promotional vehicles including advertising, public relations, direct marketing, sales promotions and personal selling.

A B2B organization may choose to use public relations and personal selling to win business, which allows them to develop close relationships with other businesses to build their trust and gain credibility. They could also try offering sales promotions with discounts.

On the other hand, a B2C company could advertise on the radio and online to create brand awareness for their consumer. They could also use sales promotions and offer discounts, similar to a B2B company. A B2C company could also use direct marketing to reach their customer base through email or post mail to tell them about their offerings.

About the Author

Anam Ahmed is a Toronto-based writer and editor with over a decade of experience helping small businesses and entrepreneurs reach new heights. She has experience ghostwriting and editing business books, especially those in the "For Dummies" series, in addition to writing and editing web content for the brand. Anam works as a marketing strategist and copywriter, collaborating with everyone from Fortune 500 companies to start-ups, lifestyle bloggers to professional athletes. As a small business owner herself, she is well-versed in what it takes to run and market a small business. Anam earned an M.A. from the University of Toronto and a B.A.H. from Queen's University. Learn more at www.anamahmed.ca.

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