Differences between B2B and B2C to Optimize Strategy Management

In business, the terms B2B and B2C are often used and associated with each other, although they have quite significant differences.

B2B, which means business-to-business, and B2C, which means business-to-consumer, have basic differences in terms of transactions carried out in running a business.

Understanding the differences between these two types of business will help understand and improve your business strategy. The following is a complete article about the differences between B2B and B2C.

Understanding B2B (Business-to-business)

Quoting HubSpot, B2B or business-to-business is a business where the consumers/users are other businesses. That is why, marketing carried out by B2B is aimed at consumers who buy on behalf of a particular organization or business according to the needs, interests and constraints of that organization.

In simpler terms, B2B is a business whose consumers are organizations and other business companies. B2B relationships are commercial relationships that are mutually beneficial and mutually contribute to the success of each party involved.

Some examples from B2B, namely:

• Company A needs software to help with the hiring process for the HR department.
• Interior design agency that specializes in designing office spaces.
• Use of marketing software for content strategy, SEO, and social media for the marketing department.
• A company that offers banking software and cloud services for banks and financial institutions.

Understanding B2C (Business-to-consumer)

B2C or business-to-consumer is a business where the consumers are individual consumers and not professional buyers.

Marketing carried out in B2C businesses is tailored to the needs, interests and challenges that many people face in their daily lives.

So, in B2C business, the end user or final user of a company's product/service is the individual consumer. B2C sales can also be done both online and offline.

One of the challenges in B2C businesses is that they require a special budget for marketing because they have to create good brand recognition to be able to grow and form a customer base. Some B2C examples, namely:

• A real estate agency that rents and sells homes to individuals and families.
• A music platform that sells premium features to its users individually.

6 Basic Differences between B2B and B2C

To form optimal strategic management, know the 7 basic differences between B2B and B2C below:

1. Offer

Quoting from Wall Street Mojo, the offers provided by B2B and B2C have significant differences. Of course, because they have different target audiences, what these two types of businesses offer will be different.

B2B offerings pay more attention to other business needs such as production materials, manufacturing materials, production components and others. Meanwhile, B2C offers ready-made products that are ready to use for consumers who buy them individually.

2. Goals

As understood, the aim of a B2B type of business is to provide for the needs of other organizations or companies that are still connected to the products and services they offer.

Meanwhile, for the B2C type of business, the business goal is to provide products and services that will meet the needs and desires of many individuals.

3. Focus

When carrying out transactions in B2B types of business, the focus is to form a long-term cooperative relationship between the service/product provider and the organization/company that uses it. In B2B, this approach focuses more on business relationships.

For B2C business focus, because the end user is an individual consumer, the main focus is brand recognition to form a strong customer base.

4. Business Size

Because it provides production materials and services for certain companies, it is certain that the size of the B2B business will be larger, as will the 'orders' or purchases made by consumers. For B2C itself, orders and purchases tend to be in small quantities.

5. Marketing Strategy

Forbes states that there are definitely differences in marketing strategies for B2B and B2C business types because of differences in focus and target audience.

B2B marketing will usually focus on marketing that is more long-term in nature, conveying the specialization of the products/services they offer, and the problems they solve so that they can be trusted by experts in their field.

Meanwhile, marketing strategies for B2C tend to be simpler and change more quickly. This is because their target audience is no more complex than B2B.

Unlike 'purchase' decisions in B2B which require the approval of many parties, B2C only requires the approval of the individual who needs the product/service. That way, the decision-making process will also be faster.

Marketing in B2C will prioritize content that is persuasive and shows direct benefits and ensures a satisfying consumer experience.

6. Sales Cycles

Both B2B and B2C sales have different stages, including timing and interactions that have a direct impact on the sales process.

B2B sales cycles are usually more extensive and involve a lot of effort such as networking, building good relationships with potential buyers before sales and purchases are made.

B2B buyers who are organizations/companies are also more careful so they need more information and time before making a purchase.

In contrast to B2B, B2C sales cycles tend to be simpler and do not involve many parties so purchases can be made directly. It doesn't take longer to process information.

B2C places more emphasis on brand awareness, advertising and digital marketing carried out by a business to ensure sales.

If you are managing one type of business, whether B2B or B2C, it is important to understand the differences between the two to form a more optimal strategic management.

To get a better start, you must first understand the basics of B2B and B2C before implementing appropriate strategic and marketing management.

Interested in exploring both? You can start by taking part in the Managing Strategic B2B Account program from the Prasetiya Mulya Executive Learning Institute.

From basic understanding, the differences between B2B and B2C, market mapping, targeting, to the role of branding in both businesses, you will get a comprehensive understanding.

Register for the program now!