A Deeper Insight Into B2C (Business to Consumer)

What is B2C?

B2C is the acronym for business to consumer. The B2C meaning is simple enough to understand once you get to know the basics. Any company that sells its products to the people is involved in a B2C transaction. Does this confuse you? Wondering why it needs to be differentiated as B2C? Isn’t it always that purchase is done by a person?

To be clear, it is important to note that in the B2C model, a company sells its product to the people for their individual use. When a company sells its products to the people who are buying on behalf of another company for official work-related consumption, then it will not be a B2C transaction anymore; it will be called a B2B transaction.

Let us take a simple example to explain this. Let’s assume you own a bakery. A person walks into your shop and buys a cake and eats it. This will be a B2C transaction for you since you are selling your product to a person who’s consuming it for their personal use.

Now, consider there is a big car dealership in the vicinity of your shop. Its owner comes into your shop and places an order with you for the delivery of 500 cakes to his office within the next 7 days. You will have to raise a formal invoice in favor of the car dealership, and they will pay you upon receipt of the cakes. This will be termed as a B2B transaction since you are selling to a business in this scenario.

In the following sections, we will take you through what is B2C business, how it operates, and how to plan successful marketing strategies to attract customers.

A Business to Consumer Company

A B2C company produces its products and supplies them to consumers. It does not necessarily mean that the company must be exclusively a B2C player, it could also have a dedicated strategic business unit with the sole focus of acquiring corporate business for their product range.

Digitalization has brought a lot of changes in how businesses are conducted. A B2C company follows multiple ways to ensure that its products are sold to its intended customers. B2C companies can sell their products via:

  • Digital channel
  • Brick and mortar establishment
  • Omnichannel approach with a strategic mix of the above two modes

How do B2C companies operate?

For B2C companies, having a robust supply chain in place is essential for running a successful business. Most B2C companies do not sell their products directly to the consumer market; they have intermediaries in place that help in maintaining an efficient supply chain. In simple terms, the following are the major stakeholders in a B2C supply chain:

  • Producer or manufacturer – This is the company that produces or manufactures the goods to be sold.
  • Wholesaler – This is the company that buys in bulk from the manufacturer and maintains inventory in its warehouses.
  • Retailer – This is the company that buys from the wholesaler and sells it to the end consumer.

Impact of Digitalization on B2C

Digitalization has disrupted the supply chains of all businesses in ways nobody could have ever imagined. Businesses had followed the conventional process of selling through wholesalers and retailers for decades before digitization caused a complete paradigm shift. A lot of new avenues opened for the manufacturers to sell their products to the consumers:

  • Digital channel – Manufacturers develop their online portal, through which they sell their products directly to the customers and deliver the materials using their delivery network.
  • E-tailers or Online Marketplaces – A popular example of this model is Amazon. Manufacturers list their products on Amazon. The consumer places the order through Amazon’s marketplace. The materials are delivered directly to the consumer by the manufacturer or using the e-tailer’s delivery network.
Types of Customers in B2C

B2C Marketing and Sales

In the B2C scenario, marketing and sales perform distinct functions. The sales teams are more oriented towards activities that are aimed to run the supply chain smoothly and make sure that the products are always available for the customer at the designated stock points.

The challenge in the B2C segment is that the customer’s decision is not planned, and their purchase process is not defined. Consumers will buy whatever they want and feel is the best for them.

Therefore, the marketing function plays a very pivotal role in ensuring that customers choose your product. The marketing campaigns must be designed in such a way that your brand is retained in the customer’s memory. The next time the customer wants to buy a product that you have, the first thing that the customer should be able to recollect is that you are the best option for them to buy this product.

Your marketing strategies should be diverse to consider how each type of customers behaves:

  • A loyal customer is one that always comes back to you to buy what they need. They are also the ones that promote your services and products by word-of-mouth. In today’s market, it is very difficult to come across loyal customers. Hence you should make all efforts like meaningful engagements, special offers, customized services, etc. to retain them.
  • An impulsive buyer is one that buys your products on impulse. To attract this set of customers, your product presentation should be attractive. Your marketing campaigns should be targeted to gain the attention of this category of buyers and stimulate a desire to buy your product.
  • A bargain-hunter is one that will always be on the lookout to find who will offer them the most economical alternative. These customers are driven by prices. Sales offers should be developed to attract this set of customers.
  • A need-based customer is one that will buy your product only if they need it. Flashy advertisements and sales offers do not attract these customers. They are driven more by the utility-aspect of your products. One way to attract these customers is by creating and distributing engaging content covering the technical aspects and utility benefits of your products.

With every company vying for the attention of customers, it has always been big players with large financial support who have been able to claim the majority share of revenue in the consumer segment. However, with the adoption of digitalization, small businesses have been provided with the opportunity to showcase their products and services on e-commerce platforms. This helps them to sell their products to consumers, taking the support of the e-tailer's established network.

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