1) INTRODUCTION
2) LITERATURE REVIEW
· COMPARISON OF B2B & B2C MARKETING STRTEGIES
· CHALLENGES FACED IN 21st CENTURY
3) CONCLUSION
4) REFERENCES
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1) INTRODUCTION
Business to Business marketing consist of all organisations that purchase goods and services to use in the creation of their own goods and services. Generally business markets consist of fewer but larger customers than consumer markets and are involved in purchase of significantly large value having complex economic, technical and financial consideration. According to Vitale and Giglierano (2002) B2B can be defined as the process of matching and combing the capabilities of the supplier with the desired outcomes of the customer to create value for the “customer’s customer”. According to TANNER and Dwyer (2002) Business marketing can be defined as marketing products or services to other companies, government bodies, institutions, and other organisations. Business marketing is unique because of distribution channels are shorter and more direct, it is more emphasis on personal selling and negotiation, the web is fully integrated, and complex buying processes results in unique promotional strategies. Relationships are also different between buyer and seller when both are organisations than when one is an individual consumer. Business to consumer marketing consists of all organisations that sell goods to final consumers without any changes in products. Consumer market is a mass market consists of larger customers. Consumer market deals with the consumers who purchase the goods and services.
IBM is one of the leaders in Indian information technology industry. IBM has been present in
Big Bazaar is a chain of department stores in
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have a grocery department and vegetable section called the Food Bazaar. Big Bazaar
stores in Metros have a gaming area and kids' play area for entertainment. These have proven to be very popular as a hang-out area for people of all age groups.
The company operates their chain of super markets under the brand names of
- Big Bazaar - Discount stores
- E-Care - Customer Service Support
- E-ZONE - Consumer Durables
- Food Bazaar - Exclusive food market
- Central - Hypermarket
- Pantaloons - Fashion apparels (www.5)
2) LITERATURE REVIEW
· COMPARISON OF B2B MARKETING & B2C MARKETING:
B2B marketing and B2C marketing are different but a common body of knowledge, principles, and theory applies at the same time different in buyer and market functions. B2B relationship represents the information of the contracts between seller and buyers or customers. Contracts have product, price, quality of service, and payment terms. B2C relationship represents the information about warranties or service contracts that include product, price, and quality-of-service terms, as well as contact identification information. According to Hutt and Speh (2004) Mostly consumer and business marketing can be differ in
· Nature of markets
· Market demand
· Buyer behaviour
· Buyer-seller relationship
· Market strategy
a) Nature of Markets:
Nature of market is depends on the type of business organisation it is. Nature of market means how the market is, whether large market or small market. For B2B organisations the market is small, geographically concentrated, relatively fewer buyers, and oligopolistic competition (More than one competitor). But in B2C
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organisations the market is mass market, geographically dispersed, relatively many buyers, and Monopolistic competition.
b) Market Demand:
Market demand of B2B organisations depend on the B2C organisations
because final consumer demand has the impact on demand for products in the business market. For example coca cola supplying soft drinks to the Big bazaar. Supplying of soft drinks to Big bazaar is done by business marketers not directly by Coca cola company or may be they have contract with the Big bazaar for supplying soft drinks to them directly. Then the derived demand of the coca cola company will depend on big bazaar organisation how they are selling the soft drinks. If the Big bazaar selling more soft drinks the demand is high, if they are not doing well then the demand for soft drinks are less. So that there is some interlink with B2B organisation demand with B2C organisation. Generally the market demand is high or low is depend on how frequency the purchase was made by the other business organisation. But the B2B organisations will make purchases huge at a time like huge bulks.
c) Buyer Behaviour:
In B2B organisations buying of any products is made by the professionally trained purchasing personnel. But the consumer marketing purchasing decisions made by individuals. For making purchase decisions B2B organisations will give the priority to functional involvement at many levels and task motives are predominate. But the consumer market influenced by family and social/psychological motives are dominated for making purchase decision.
d) Buyer-Seller Relationship:
In B2B organisation technical expertise an asset but consumer market less technical expertise. The relationship between buyer and seller is interpersonal but the B2C organisations relationship is nonpersonal. In B2B organisations there is significant information exchanged between participants on a personal level and the relationship between two parties are stable, long-term and encourage some loyalty but little information exchanged in B2C organisations and the relationship maintained between them is short term which encourage to switching of that company and going to some other company.
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e) Market strategy
1) Marketing Mix:
Marketing mix is a common strategy which is used in both B2B organisations and B2C organisations consist of 4P’s.
- Product
- Place
- Promotion
- Price
PRODUCT: The industrial product purchase exceeds the typical consumer purchase. So the size of purchase in B2B organisation is high where as B2C organisation size of purchase is less compared to B2B organisations. The amount of time and effort put into making the decision to make a purchase, even before a supplier is contacted, is much longer in an industrial market than with consumer purchases. The time spent between initial contact and a final purchase decision is also much longer in a business purchase than in a consumer purchase. Price, delivery time, quantity discounts, quality, and so on are much more important in a business purchase and must often be negotiated with several suppliers before the best combination is found. Once a purchase is made, delivery time or lead time is longer period in business purchases if compared with consumer purchase. Consumer products are purchased more often (partly because they are purchased in smaller quantities) and used up faster than industrial products.
PLACE: In consumer markets, place is about getting the products to the customer in the right form (size package, quantity, etc.). Place or distribution decisions concerned with physical movement of goods and how this is organised (making decision for which channel should be used for the products to reach the customer.) availability that is required by the customer will have to be assessed. The proportion of effort and resources that will be allocated to each element of marketing mix has to be decided. Generally the distribution channels are shorter in B2B organisation because direct channel (no one between manufacturer and the customer who used the product) is
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used for distribution of products. But in consumer market distribution channels are
indirect and multiple relationships. Shorter channels contribute to the closer relationship between manufacturer and buyer.
PROMOTION: According to Hart (1994) Promotion is concerned with how to communicate with the customer to know about their products and make them to purchase their products. B2B marketing places a different emphasis on the parts of the promotion mix (advertising, sales promotion, personal selling, and public relations) than is commonly found in consumer marketing. But in consumer marketing advertising play an important role but in B2B marketing personal selling play an important role because in B2B marketing distribution channels are shorter and stronger relationship between the seller and buyer. IBM used a personal selling a promotional strategy for doing marketing. IBM has the very good brand image so it will create positive effect to other organisations for purchasing any hardware or software package. And also IBM using the strategy of multiple personal relationships, by that the company can strengthen the organisational relationships.
PRICE: Generally speaking, industrial products are more expensive than are consumer products. The highest priced industrial products are much more expensive than are the highest priced consumer products. About the highest priced consumer product is a house, whereas many industrial products exceed the price of an average home by a wide margin. Pricing strategy should cover aspects of pricing policy such as the price level and discount policies. Short term price promotions should be dealt with in the operational or tactical plan. While fixing the price of the product the following aspects should be keep it mind, nature of demand, production costs, competitors products. Price is an important factor for any organisation to purchase the goods or to sell the goods. Big bazaar pricing strategy is depend on, for how much they are purchasing and also they will see who is selling the goods for how much. There is no permanent supplier who will supply the goods for them because if some other supplier will supply the same goods for cheaper price, then they will switch this supplier and they will go for cheaper one. So that they can make some profits but IBM organisation there is a fixed price for one buyer for specific period of time,
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sometimes the price may differ for other buyer compared to this buyer based on the contract or relationship etc. Recently Big bazaar using one of the new pricing strategy of "Bring anything old and take something new". A press release issued by the company says the customer can bring anything old, such as newspaper, and get coupons issued in exchange of the junk. The customer can redeem the coupons before the due date on the condition that he/she shops four times the value of the coupon.
- CHALLENGES FACED BY PURSING THESE STRATEGIES IN 21st CENTURY:
The marketing strategies which are used by IBM and Big bazaar are going be almost same but there may be changes in the purchasing pattern of buyer. The world is changing now in terms of business, the changes are e-Business going to be play an important role. The changes are
a) If the IBM is doing the business, the company should update their information in the internet about the company product and services, so that it is easy to understand about the company products and services to buyer. In the business activities of IBM service information is important, so they should take regular feedback from the customers, so they can use modern Electronic information systems by using it they can overcome the problem.
b) Consumer’s way of thinking is changing, now a day consumers preferring quality goods rather than cheaper goods, so in future time Big bazaar should concentrate on quality of products.
c) IBM have very good brand image to maintain the same image, the IBM should get goodwill by helping the society. If IBM is doing this it is one of the advantages for competition.
d) IBM should concentrate on changes happening in the world in terms of technology changes.
e) Any organisation should maintain proper distribution channel for supplying the products and maintaining good relationship with the buyers. Knowing regularly who the competitor is and knowing what the strategies they are adapting are.
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3) CONCLUSION
A marketing oriented company either business oriented or consumer oriented company must embrace marketing as an overall business philosophy. The firm must adopt the marketing concept, where success depends on the identification and satisfying of customer requirements. However, marketing is also a functional area of management. As such, though, it should not simply be confined to the marketing department. Any company are marketing oriented, so they must organise the areas of marketing analysis, marketing planning, and implementation of strategy and control of the marketing function for the organisation as a whole. At the same time Business marketing is not the same as consumer marketing. Different strategies must be developed for different types of products (or for the same products at different levels on the consumer-industrial continuum). There are six areas where there are significant differences between Business marketing and consumer marketing: derived demand, reciprocity, multiple buying influencers, stable buying relationships (long-term relationships), rational buying motives, and concentrated markets (both number of customers and location). There is a significant difference in promotion and distribution strategies between consumer and Business marketing. Business marketing is dominated by personal selling and supported by mass selling and sales promotion. Most sales in Business marketing involve personal selling as the dominant form of promotion. Channels are shorter and distribution is selective. In consumer marketing, however, it is common for an individual to shop self-service, basing purchase decisions strictly on mass selling messages and personal experience. Consumer marketing usually features mass selling, supported by personal selling and sales promotion. Channels are long and distribution tends to be almost intensive. With these distinctions in mind, it is not feasible to say that Business marketing and Consumer marketing are the same. A company needs to develop different strategies for dealing with Business and consumer segments. The key to these differences is the buyer. In industrial and business marketing it is the organizational buyer, in consumer marketing it is the ultimate consumer.
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REFERENCES
Dwyer, F.R. and Tanner, J.F (2002), Business Marketing; connecting strategy, Relationships, and Learning; 2nd edition,
Hart N (1994), Effective Industrial Marketing; Business-to-Business Marketing of Goods and Services, Kogan Page Limited,
Hutt M.D. and Speh T.W (2004), Business Marketing Management; A Strategic View of Industrial and Organisational Markets, Library of Congress
Vitale R.P and Giglierano J.J (2002), Business-to-Business Marketing; Analysis & Practice In A Dynamic Environment, Library of congress
www.1http://www.emeraldinsight.com/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0800010101.pdf
www.2http://www.emeraldinsight.com/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0800200408.pdf
www.3http://www.emeraldinsight.com/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0800210703.pdf
www.4http://www.emeraldinsight.com/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0800160503.pd
www.5-http://en.wikipedia.org/wiki/Big_Bazaar
www.6-http://www.ibm.com/ibm/in/en/
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