Business to consumer (B2C), business to business (B2B), and business to government (B2G) are three common types of marketing strategies. As a marketing agency CATMEDIA helps clients with all three types of marketing strategies. Although general marketing concepts apply to all marketing strategies, there are important differences. In the next few paragraphs I will answer a frequently asked question regarding key similarities and differences between B2C, B2B, and B2G marketing.
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B2C, or business-to-consumer marketing, takes place when a business—such as a grocery, storefront retail store, an online consumer legal services, or an online medical information organization—markets their products or services to the public. A similarity between B2C, B2B, and B2G is that as marketers we are always developing communications directed to people. A key difference is the focus on the particular role of the person. B2C marketers are marketing to the consumer, as contrasted with B2B marketers marketing to the business decision maker or influencer, and B2G marketers marketing to the government contracting officer or representative, or government program manager.
Consumers typically make smaller purchases compared to those made by businesses or government entities, and these purchases typically take less time for a final purchase decision than business or government purchases. The purchase decision is also typically less complex than the process of selling and marketing to businesses or government. The lower complexity is due to fewer people being involved in the purchase decision--perhaps only one or two consumers deciding whether or not to purchase one or more items. Through advertising, direct and Internet selling and marketing, and things like discounts, coupons and loyalty programs, B2C marketers work to convince customers and prospective customers to purchase their products and services.
B2C marketers sell to individuals within huge populations. Of course, not every product is going to appeal to every consumer in one population. Therefore, B2C marketers use tools to segment their market into multiple target markets. B2C marketers conduct marketing research to better understand consumers of certain age groups, gender, income, place of residence, and other demographic and psychographic categories regarding their needs and buying behaviors. By understanding key target populations, B2C marketers learn how to sell products and services more effectively to consumers.
A key component of B2C marketing, which is equally important in B2B and B2G marketing, is that of building and nurturing a brand. If a brand has a good reputation, consumers, businesses, and government agencies are more likely to purchase that brand. Logos, packaging, and other brand components help create an affinity between the brand and a target segment of consumers, businesses, or government entities, which encourages the selection of the product over a competitor’s option.
B2B marketing takes place when a business sells its products and services to other businesses. B2B marketing includes marketing to businesses that conduct business for a profit and to those organizations that have a non-profit charter. Business purchase decisions, unlike consumer decisions, tend to require more planning and a more complex, formal purchase decision process.
Businesses purchase many products and services including desks, chairs, computers, and office equipment for their employees, raw materials for manufacturing, software systems for operations, and various services to assist with marketing, IT, accounting, and other business functions. Similar to B2C marketing, some B2B purchases are critical needs, while others are discretionary purchases. Most businesses have a formal purchasing process which includes procedures for requests, approvals, procurement, and payment. Often there is a cost/benefit analysis to ensure the purchase is not only needed, but is the best alternative between several options. In the business world, there are many stakeholders in the purchasing process, including those that influence, recommend, and have authority to order a purchase. Therefore, a B2B marketer must fully understand the needs of the organization to which they are selling, as well as the organization’s buying process and the stakeholders in that buying process.
Similar to B2C, B2B marketers conduct marketing research to segment their market and develop marketing communications focused on the needs and wants of the target audience. Possible B2B segments include industry sectors, business size (small, medium, large), and common needs (such as agency knowledge of compliance regulations). Because of the longer and more complex buying process, B2B marketers focus on building a relationship with its business prospects and clients, and addressing the buyer's specific information needs at each step in the buying process.
B2G marketing refers to businesses that sell their goods and services to government agencies. A major difference as compared to B2B and B2C is that in the B2G model, companies generally respond to requirements published by a certain government entity through a structured bidding process. This bidding process can take place online in real time and can be highly competitive. For example, as part of a bid a company may publish its "Statement of Capabilities," which describes the company’s products and services pertinent to the government project. A company may also include a “Proposal of Service” which refers to specific information in the request for proposal (RFP) or request for information (RFI). B2G sales and marketing is sometime referred to as public sector marketing.
The buying cycle for B2G can be quite long—measured in years, as compared to several months for B2B, or a day to several weeks for B2C. The B2G marketer must understand and comply with bid specifications, compliance regulations, and applicable laws. This sometimes means the B2G marketer may not have personal interactions with agency contacts needing the products or services detailed in the bid, until the bid is awarded by the contracting officer. The bidding process can vary significantly between local, state, and federal government entities.
To summarize, similarities across all marketing strategies—B2C, B2B, and B2G—include:
- Marketing consists of messaging to people.
- Marketers must know their customers or clients, how to segment the market into meaningful audience groups, and how to reach the target audience with informational and promotional messages.
- Marketers must know the difference between absolute needs and discretionary purchases, and understand their clients’ options to fulfill those needs and wants.
- Marketers must build and nurture their brand.
Differences between the marketing strategies of B2C, B2B, and B2G include:
- The focus on a particular role of the person:
- B2C marketers market to the person as consumer;
- B2B marketers market to the person as a business decision maker or influencer;
- B2G marketers market to the person as a government contracting officer or representative, or government program manager.
- The purchase decision for B2C is less complex than the process that goes into selling and marketing B2B or B2G because of the number of people involved in the purchase process, and the need to understand and comply with organizational processes for requesting, approving, procuring, and paying for purchases.
- Typically, the buying process is shortest for B2C, longer for B2B, and longest for B2G.
- Unlike B2C and B2B marketing, in the B2G marketing model businesses generally respond to requirements published by a certain government entity through a public, structured bidding process.
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CATMEDIA is an award-winning Inc. 500 company based in Atlanta, Georgia. Founded in 1997, the company specializes in advertising, creative services, media production, program management, training, and human resource management. As a Women Owned Small Business (WOSB), CATMEDIA provides world-class customer service and innovative solutions to government and commercial clients. Current CATMEDIA clients include Centers for Disease Control and Prevention (CDC), Federal Aviation Administration (FAA), Office of Personnel Management (OPM), and the Department of Veterans Affairs (VA).