Strategic Approach B2B vs B2C

 

Marketing is always been a collar in any development phase of a product. Making the feasibility of any dairy product always identifies the target audience prior to the sales but whether it's to customer or business to business this question lies in the quality, type, and cost of the product. 

Taking the example one step forward cheese is a key part of the dairy family and over the years its consumption from daily household products to big fancy pizza restaurants increased in the quantity of thousand of units. Cheese is a product that can not only be sold according to its size, quality, and freshness but also requires the huge cost of refrigeration which force producer and manufacturers or process plants to market it and sell it on B2B through milk shops and departmental stores which led to developing long sales cycle, high volume capability on low margins and retail relationships. But in the same dairy family when milk is on sale, it can be sold by building a good brand name and directly to consumers. Though selling directly may require some platform shop, online website, or grocery app, it ends in higher profits, a short sales cycle, and high profitability.

Understanding B2B Growth and Financial Approach:

Products that need warehousing, storage, or with greater shelf life may be sold with the B2B model. In B2B business owner needs to work on cost measures to increase profitability if the selling value of a product is $100 and been manufactured at $30 then all the operation costs, shipping costs, goods damage rate, retailer, and manufacturer margins will be kept under the difference of $ 70. This means that the higher price lowers the margins. 

A product that has a competitive cost of $100 can not be sold at $110, it can affect the sales volume which marks the growth of the product and business in the B2B model. In this model different types, of shipping modes can be worked out for revenue increase like flat shipping, expedited shipping, and overnight shipping, each mode can be separated by a factor of time and charges. In business, to business, long-term relationships are crucial for growth and market dominance, cost of the product is a factor that decides whether your product can be displayed at retailers' shops or not, and the inventory turnover ratio decides the positioning of the product on which B2B is more focused.

B2B marketing and product sales make it a niche-based model and more competitive as the threat always lies at the heart of results, as your product is sold with multiple competitors so the market share eventually gets divided which affects profit deeper. To cater to this volume and quality requires keeping the sale corner in big stores. Producing in volume also provides the opportunity for manufacturers to launch discount schemes, and prize schemes to increase sales.

The top priority in the B2B model is to generate leads while building a brand, consumer in the B2B model are always well aware and research-based, to improve the volume, profit, and day-to-day engagement with clients extended time manufacturer and wholesaler relationships are required which led to building the brand and suitable market share.

Understanding B2C Growth and Financial Approach:

Specialized, unique niche, high-cost, research-based, and make-to-order products require a B2C model for marketing and selling strategy. If we take the example of the same valued product whose sale price is $100 and the cost of manufacturing is now up to $40, now a difference of $60 covers all margins, operational delivery cost, marketing, and selling. B2C requires drawing customers to direct selling modeling by site, shop, or marketplace. Apart from B2B, B2C relies directly on customer feedback, quality of product, repeat order ratio, and customer-manufacturer relationship over the time period.

For example, if an automobile manufacturer sells the car directly to its customers through its local company-owned showrooms, its core provision will be aftermarket and sales of parts. A car manufacturer can earn more than its part than its new car because of only dealing directly with customers and their requirements. This financial and sales arm of Aftermarket covers all the B2C factors, quality, customer satisfaction index, and marketing approach. 

The B2C model implies high-valued and high-sales-cost products whose design and innovation budgets are always higher than the production cost of most B2B products. Its profitability can be acquired with precision, quality, and design despite volume which is the main in the B2B model.

B2B or B2C For Product?

It depends, on what you have planned for? your product launch success feasibility is based on which strategy, whether you are going with volume or you want to vary it from customer to customer based on your monthly reports. Either you have planned to start with sales of batches in volume or you want sales with customer feedback by building the brand. Generally, feedback from customers on large scale in B2B may post the effect on your product quickly but it could channel to the manufacturer late, in B2C this process is much faster and it could be done before the re-stocking of entire batches. Some of the direct comparison points are

B2B  Logic and information-driven. more specific for the niche target audiences. Center on logic and characteristics based on long-term relationships and long-term goals. involves short marketing and sales team requires to work on associated processes and other cost-cutting measures to increase margins. may require a variety of products in the same niche to compete with competitors based on a higher inventory turnout ratio decision making may go through different levels may depend on the retailer, marketplace, or end seller to approach the client and sales data. by avoiding a nonrelationship with the retailer could result in a loss of marketplace and potential clients.

B2C Emotional and joyful. targeted for large-scale individuals and profile customers. Center on desires and benefits. based on specific short-term goals and profits for short cycles required a proper marketing budget and a company-owned marketplace for selling requires mainly R&D budgets, quality, innovation, and prototypes to remain in growth-based profits. may require free giveaways, customer care, and continuous research of new potential clients based on a higher repeat order turnout ratio emotional and rapid decision-making could require additional investment, and budget to develop its own marketplace, less dependent on retailers. higher the growth, higher the requirement for the marketplace, higher the maintenance budget

The company following the B2C pattern can target the volume-based market with the low-cost product through a B2B model. For example, a company with high-value brand cosmetic manufacturing with high sales, a high margin B2B model can launch with a low-cost product by white labeling or a low-value brand for high volume sales for targeting low-end consumers.