Differences between B2B and B2C Markets
B2B markets entail transactions that involve businesses whereby both the seller and buyer are business owners. In this market environment products being derived are not sold to end users. Buyers tend to buy the products in large quantities and later on sell to their desired consumers. B2C markets on the other hand, involve transactions between a business and the end consumers. Local stores that operate on a retail basis are good examples. Although both businesses target people, there are some fundamental differences that emanate from them. To some point, the marketing strategies involved are similar but some aspects of the stakeholders involved tend to differ.
Among the major differences between the two types of business is the size of the market involved. B2B markets are generally small and vertical in nature. There are specifications on the niche to get involved with. An organization does not only operate with any other business without having to fulfill the niche specification requirement. The market is characterized by few sales prospects entailing some thousands. Going to a higher scale the market will entail 100,000. B2C markets on the other hand are large with a million of sales prospects. The market can either be vertical or horizontal (Lilien & Grewal, 2012).
Another difference between the two markets emanates from the driving forces. The main forces involved here are professionalism and emotions. On most occasions, B2C purchases are triggered by emotion and other basic human needs like shelter, sustenance and comfort. It goes to the extent where even the basic needs are influenced by general belief systems and emotions (Fletcher & Bell, 2004). This means that the purchasing habits are influenced by brand identity and essence of satisfaction and security derived. An organization’s reputation might affect the consumption prospect. Such aspects have prompted many B2C organizations to practice social responsibility as a way of enticing consumers. On the other hand, purchases in B2B are triggered by aspects such as budgets, goals and vendor relationships. There is less emotion involved with the vendor relationships, but they are not driven by personal satisfaction and security. Most of the relationships are based on trust bearing in mind that the vendors will help the organization in attaining its objectives and goals.
Sales cycles bring along another difference between the two markets. Cycles involved in B2B markets are more complex compared to those involved with B2C markets. In B2B markets, making a purchasing decision involves several steps including, demonstrations, test drives, competitor analysis, legal review and ROI calculations. These cycles tend to be extensive hence creating a necessity for sales representatives and marketers to keep nurturing the leads (Lilien & Grewal, 2012). On the other hand, B2C marketers do not have a reason to worry regarding the follow up of individual prospects. This is because most of the purchasing decisions are made instantaneously. If they are not, there are promotional tools used to remind individuals and they appear to be persuasive.
Decision makers involved in both markets also bring about a differing aspect. On most occasions, a number of decision makers depend on the nature of product involved. In B2B markets, there is knowledge that building relationships with multiple stakeholders are of great importance. This means that different marketing collaterals need to be developed for each group. In B2C markets, the consumer is the only decision maker.
Product positioning is a technique used in marketing whose intention is presenting products in the best way possible in order to differentiate target audiences. In a way, this method is related to segmentation based on the fact that the early steps are aimed at discovering the core markets likely to buy products being manufactured. Positioning a product entails the process of creating a message that is likely to reach this desired group. It is an initiative that involves message and symbol manipulation including packaging and displays. Positioning is not entirely what the marketer does to a product, but what he or she does to the mind of the targeted audience (Ferrell & Hartline, 2011). An effective product positioning must follow several steps. They include knowing the target audience. Knowing the target helps in understanding their preference and needs. People will never think on the same line. This is then followed by identifying various product features. A marketer cannot sell something until he or she is convinced of its aspects. Having unique selling propositions is also relevant and understanding the competitors. Underestimating the competitors might ruin product positioning based on their offerings. A company must also come up with way of promoting the products derived.
Creating Brand Personality
By creating a brand personality, marketers refer to a set of consumer characteristics that are attributed to a given brand name. These are the things that consumers have the ability of relating with. When it is effective it tends to increase brand equity when the traits are consistent. It is an added value gained by a brand, in addition to its functional benefits. There are five types of brand personalities that are widely used by marketers. Among them is excitement. Most exciting brands tend to be spirited, daring, cutting edge and imaginative. Consumers are willing to try such brands based on the expectations for their satisfaction. Sincerity is also highly valued for brand personality prospects. To many consumers, sincere brands tend to appear as down to earth, wholesome, honest and cheerful. This is usually a great step towards building trust with consumers. Competence then comes in through intelligence, reliability and success. No consumer wants to associate themselves with brands that are doomed to fail. People want to enjoy them for as long as possible (Vaid, 2008). Sophistication is another brand personality that is regarded as charming and suitable for upper classes. It comes in with longevity and self-esteem.
Measuring Brand Positioning
There are a variety of ways in which a marketer can measure brand positioning. Among them is using survey technique. Under this approach, the company can target both the consumers and other key stakeholders in the organization. Random consumer surveys help in measuring the visibility of the brand. Consumers visibly recognize a brand when they have the ability of identifying the product by its color, logo or other visible attributes (Ries, & Trout, 2010). Company’s internal survey includes asking questions that that help ascertain the effectives of the brand. Questions relevant to market place positioning are highly recommended.
Another way of measuring brand positioning is measuring the success brought in by advertising campaigns. Here, the company needs to chart sales before and after the campaigns have been initiated. The company should take the initiative of noting any differences. This helps in highlighting the differences in sales levels hence concluding on the effectiveness.
Reasons for Expanding a Product Line
Expanding a product line is a significant factor of growth in any business entity. This comes in when an organization is in need of increasing its market share or revenue. Among the reasons that might prompt a company to expand its product line is the life cycle. The expansion prospect becomes more important for products that are in the final stages of the life cycle. There are four stages involved namely: introduction, growth, maturity and decline. When a product is in the decline stage, a company must expand its product line in order to curb competition from other organization. Failure to expand the product line in light of the looming decline might give competitors an opportunity to tap into the market share (Clements & Northrop, 2007). Another reason why companies expand their product line is taking advantage of the market opportunities. These opportunities come along as an organization is offering its current products to consumers. Customer needs have also been prevalent as a reason for expanding the product line. These needs are derived by collecting feedbacks from consumers through surveys and other mechanisms. It becomes of significant importance to expand the product line so as to satisfy consumer needs. To some extent, expanding a product line can be viewed as a strategy of creating consumer loyalty.
Reasons for Contracting a Product Line
Contracting a product line is triggered by the benefits that arise on the side of the organization. Among the reasons of contracting a product line is savings in terms of cost. Through contracting, a company may outsource the production or the marketing processes encompassed in the product line. For production purposes, an organization will reduce its costs in purchasing of equipments and other subsidiary activities required for the process. Savings derived from this activity can be used in other profitable activities in the organization. This helps in delivering efficiency and sufficiency in all departments. Another reason that prompts an organization to contract a product line is the skills required to complete the task. Addition of some products in the product line might require some skills that are not found within the organization. Contracting for such services would be the best thing to do if the organization wants the product line to be a success. Lack of desirable expertise might hinder a product from realizing it full potential. Through contracts, the company is also able to concentrate on its core competencies. A company might be good in marketing; hence contracting the production process might bring about smooth and favorable operations.
Product Mix Strategy
A product mix strategy is paramount for organizations that desire to remain in operation for a long time. Firms establish a product mix strategy in order to enhance sufficiency. When one product fails, the others will come along to compensate the organization hence stabilizing the viability prospect. Developing a single product might turn disastrous if market failure comes to be a reality. Firms also use product mix strategy as a way of promoting new products. Most organizations build their brand with the help of several products that they have already introduced into the market. The products are already known by consumers and they have developed loyalty towards them. Introducing new products alongside the existing ones makes it easy to make acceptance. Here, the organization is taking advantage of its brand recognition to help the new products in making the desired sales.
Targeting Hispanic Market
Hispanic is a demographic that is growing at a relatively high rate. In 2000, this ethnic group made around 13% of the total population. This number has changed significantly since in 2010, this demographic constituted of roughly 16% of the total population (Moses, 2013). Many firms are trying to find ways of reaching this population without avail. Most of the individuals in this ethnic group are complaining that they do not feel any attachment to advertisements being released by most firms all over the country. They do not have any appeal since they do not seem to target them. In light of these occurrences, many firms are trying to incorporate their language in the advertisements in order to get their attention. Messages entailed in the labels are also changing so as to enhance viability in light of the target population. However, this alone has not been effective due to other issues entailed in the process.
Some firms have established the need of understanding this ethnic group. They have taken the initiative of learning their culture in one way or another. Through this, it would be easy to understand what they want and desire as consumers. Through various researches, it has become prevalent that this ethnic group values its culture in a broader way than it was thought before. In this realization, organizations are now trying to vary their previous advertisements in order to reach this market. They are integrating Hispanic’s cultural activities while passing their desired messages to them. Before the initiation of the advertisements, organizations are trying to highlight some facts regarding this ethnic group. To this community, the approach provides them an opportunity to learn some things about themselves that they might not be aware. As a result, they become more interested in the advertisements that follow. There is a connection created between their culture and the products being promoted (Soto, 2012). In the long-run, there is a possibility of developing consumer loyalty for the products being promoted.
Another approach being used to target this demographic is using individuals from the ethnic group for promotional purposes. These individuals are featured in various advertisements being featured in a variety of media outlets. Inclusion of these personalities creates the desire of wanting to know what the products being promoted entail. One of their own is being used to propel the promotional prospects hence creating an essence of attraction.
Other firms are using personnel from this ethnic group to enhance tier personal selling attributes. Through this approach, companies are recruiting individuals that reside in areas where these people are concentrated. They encourage the people to use their products through some agreements. In the process of using the products, these people try to convince their colleagues to embrace the same direction. Individuals that are given this task should try their level best in showing the benefits that have gained in light of using these products. This becomes easy for others to trust the products since they trust the individual that is bringing the message to them (Soto, 2012). There are some cultural ties that bind them hence creating the urge of embracing these products. As new consumers join in, they tend to spread a similar message to other people within the same ethnic group. This is because most people that are true to their cultures like uniformity and hence are ready to influence their colleagues into adopting these products.
Being “Green” is a Management Fad
Being “green” has developed to being the recent slogan in most organizations all over the world. According to me, this is the latest management fad being used by organizations to help capture the desired market share. Many consumers are becoming conscience regarding the environment that they are living in. This has been attributed by emergence of various health conditions emanating from environmental pollution. It has resulted in changing their preferences and tastes. In light of this realization, organizations have to change their production activities. They feel the urge of giving consumers what they want in order to retain them. This has resulted to many organizations embracing the concept of being “green” as their marketing tool. However, this concept is deceptive from a variety of companies. A good example is Apple Inc. The company has taken various measures in trying to embrace the concept of being “green”. Among the steps taken has been reducing the size of their products so as to minimize the amounts f emissions released to the atmosphere. Nevertheless, this has been the case. Apple Inc has contracted the production process to Foxconn which is based in China. In 2011, Apple-Foxconn was reported to have released more than 23 million metric tons of green house gases into the atmosphere (Walley, 2012). This is a significantly huge amount from a company that is trying to classify itself as being “green”. It is an indication of using green wash as a way of gaining acceptance on the side of consumers. Not long ago, BP was also terming itself as being green. The gulf oil spill came along to eradicate this presumption that the organization was holding on.
Just like other management fads, being “green” will not survive if it comes to being a stumbling block towards making maximum profits in future operations. Every business is coined with an aim of making profits. Other activities that take place in the process are just initiated as a way of helping to attain this ultimate objective. Among the subsidiary activities is enhancement of corporate social responsibility. Most companies adopt the aspect of being green as way of enhancing social responsibility to their consumers. This helps in creating consumer loyalty hence increasing sales prospects. If the aspect contributes the decline of sales in the future, organizations will abandon it altogether. They will create the initiative of finding other ways of enhancing corporate social responsibility and replace the being “green” notion. Moreover, many organizations have adopted this concept not because they want, but the trends in the industry have forced them to do so. A good example is the adoption of the hybrid cars by Toyota. Initially, Toyota had refused to adopt this strategy in their production mix. They had their own reasons based on their business model and strategic objectives and goals. However, increased pressure from other players in the industry prompted them to accept the ideology. The competitors were embracing this model and Toyota was worried of losing its market share (Juettner, 2009). As a result, the company produced its first hybrid car dubbed the Toyota Pius. This is a clear indication that being “green” is a management fad whose future is not certain. Companies are adopting it just because their competitors are doing the same way.
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