Consumer and B2B firm---How different are they?

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Contemporary Directions in Marketing

Consumer and B2B firm---How different are they?

BS28426-M

Module Tutor: Ian Wilson

Word Count:2,166

Award Title: MGM (2003-2004)

Student: Hao Chen (Colin)

Registration Number: 03904301

28/05/2004

Contemporary marketing theory and practice

Consumer and B2B firm---How different are they?

Introduction

The marketing concept holds that the key to achieving organizational goals consists of determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors (Kotler,2003). Under the traditional consumer markets environment, company sells mass goods and services to reach and meet different needs of its target customers by means of various marketing channels and try to establish a superior brand image in the market through applying appropriate marketing mix. However, Business-to-business (B2B) market is relatively complicated and involves not just sell, it requires a special, unique set of marketing concepts and principles. Basically, it varies to its counterpart-B2C marketing in terms of organization’s structure, participants’ behaviors, and other influential factors in the buying decision process.

Admittedly, there are many differences between B2B and B2C market. However, does it necessarily to make a justification that they are mutual exclusive or should be managed totally different as what many literatures mentioned? Current market is a buyers’ market and emphasizes much on CRM building. The relationship marketing was first defined in the mid-1980s, proponents of relationship marketing base their views in B2B market. Building good customers relationship is key successful factor in current new economic environment and future business market. Just as Gronroos states that marketing has been described simply as the process of managing relationship. (Gronroos, 1999).

As the marketing literature has evolved over recent decades, a number of classic dichotomies emerged as a tool used to define research and educational practices, journals and textbooks. Such dichotomies suggest that marketing practice is different for firms with different types of customers (e.g. consumer vs business), different market offerings (e.g. goods vs services), different geographic scope (e.g. domestic vs international), or different size and age characteristics (e.g. small vs large, or newer vs more established firms). In this paper, I will focus on a classic dichotomy: consumer versus B2B marketing. By examining the practices of consumer and B2B firms in the context of a conceptual framework that integrates both transactional and relational marketing, I will seek to identify and understand both differences and similarities across these types of organizations, in order to improve my academic research, educational processes, and future managerial practice.

Literature Review

There are various views towards this highly debatable dichotomy. Lilien (2000) argues that B2B markets are unique due to their derived demand, long purchase cycles, and a varying and fragmented market structure. Industrial buyers are described by Lilien as heterogeneous in terms of their number and size, and often multiple individuals are involved in the purchase decision process. He argues that systems-selling typifies B2B marketing, with products sold in a decentralized manner.

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Kotler (2003) differentiates B2B marketing by focusing on the characteristics of product complexity and buying process complexity. From a managerial perspective, Arnes (1998) also argues that marketing in the industrial world is more of a general management responsibility than in consumer firms, and both he and Kotler note that B2B markets are characterized by functional interdependence and buyer-seller interdependence. The latter point is reinforced by Gruen (2000) who share the same view as Gronroos argue that business marketing is driven by relationships.

Overall, the prevailing view of the literature supporting the dichotomy rests on the conceptual argument that ...

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