Channel Structures
B2C Channels
Brick-and-mortar and e-commerce are two main channels of business-to-consumer marketing.
LEARNING OBJECTIVES
Define a business-to-consumer market, and the strategies marketers use to target consumers
KEY TAKEAWAYS
Key Points
- A business-to- consumer market is the sale of goods and services from individuals or businesses to the end user.
- A brick-and-mortar store allows a consumer to visit the establishment and view the products, while receiving face-to-face customer service.
- E-commerce, or click-and-mortar, is conducting commercial activity via the Internet (online).
Key Terms
- brick-and-mortar: Buildings and property for the conduct of business, particularly in the sale of retail goods to the general public. Used to contrast an internet-based sales operation that lacks customer-oriented store fronts and a “traditional” one for which most capital investment might be in the building infrastructure.
- wholesale: The sale of products, often in large quantities, to retailers or other merchants.
- e-commerce: Commercial activity conducted via the Internet.
A business-to-consumer market, or B2C, is the sale of goods and services from individuals or businesses to the end user. The seller makes its products or purchases them at a wholesale price, then sells them at a higher (or retail) price to the consumer, thus earning a profit. The consumer uses the products for his or her own personal use and is not interested in reselling the product. The types of product features consumers desire include value, convenience, efficiency in operation, dependability in use, and/or improvement in earnings. In B2C marketing situations, the marketer must always:
- successfully match the product or service strengths with the needs of a definable target market
- position and price to align the product or service with its market
- communicate and sell it in the fashion that demonstrates its value effectively to the target market
Business to Consumer Channels
There are two main channels for business-to-consumer selling. The first is the traditional “brick-and-mortar” store – a physical location for consumers to visit. Shopping malls, grocery stores, and restaurants are all examples of brick-and-mortar stores. Usually, a brick-and-mortar establishment offers consumers the chance to see, touch, and/or try the products. It also allows companies to provide face-to-face customer service.
Apple Retail Store: Apple’s retail store in Chicago, Illinois, is an example of a “brick-and-mortar” store.
The other main channel for business-to-consumer selling is e-commerce, or commercial activity conducted via the Internet. Sometimes known as “click-and-mortar,” this channel is rapidly expanding, as more people use the Internet for purchases of both goods and information. Business-to-consumer e-commerce reduces transaction costs by increasing consumer access to information and allowing them to find the most competitive price for a product or service. For companies, developing and maintaining a website is easier and less expensive than building and occupying a brick-and-mortar store. Examples of e-commerce stores are amazon.com, walmart.com, and barnesandnoble.com.
B2B Channels
B2B channels are often the same as B2C channels, but typically there is a greater emphasis on personal touch.
LEARNING OBJECTIVES
Distinguish between business-to-business (B2B) and business-to-consumer (B2C) transactions
KEY TAKEAWAYS
Key Points
- Business-to-Business ( B2B ) marketing describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer.
- B2B transactions often involve a large sum of money, and so are often a longer process than a simple business-to- consumer transaction.
- Trade shows are popular ways for companies to engage each other in doing business and are an important part of B2B selling.
Key Terms
- e-commerce: Commercial activity conducted via the Internet.
- logistics: The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from their point of origin to the point of consumption for the purpose of satisfying customer requirements.
- trade show: An exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products and services, study activities of rivals and examine recent market trends and opportunities.
Business to Business (B2B) marketing refers to a market where other businesses, not end consumers, are the purchasers of the goods and services.
B2B describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Usually B2B transactions involve purchasing items that will make up the final product. For example, a chair manufacturer may buy steel for the frame from one company, wood from another, and the fabric from another. All these are considered business to business transactions. B2B marketing is usually quite different from other forms of marketing, particularly business to consumer ( B2C )
Business-to-Business Channels
Like Business-to-consumer marketing, business to business also employs different channels, such as e-commerce or physical stores. However, due to the substantial differences in how B2B marketing works compared to B2C, there are additional channels. Many business-to-business transactions involve large sums of money, because generally the business will buy in large quantities. Therefore, it often makes sense to involve a representative from the selling company in developing, cultivating, and maintaining relationships that lead to sales. This person can help the purchaser plan for, set up, and use the B2B product.
Another channel, not as commonly used in business-to-consumer transactions, is that of trade shows. A trade show provides a platform for many different companies in the same general industry to display their products for other businesses to buy. A business will often purchase products at a trade show for use in their own products, making trade shows an important component of Business-to-Business transactions.
B2B Transactions: Trade shows are a common way to conduct B2B transactions.
Business-to-Business E-Commerce
One of the major differences between business-to-business (B2B) transactions and business-to-consumer (B2C) transactions is the type of online (e-commerce) interaction. Typically, a B2C customer will purchase a product or service and, once the transaction has been complete, will have limited continued interaction with the company with regards to that product.
However, in a B2B transaction, the purchaser often expects an ongoing relationship with the seller. This is also reflective of the types of products and services offered in a B2B e-commerce setting, which includes logistics, outsourcing, solutions software, and content management software.