B2B stands for business-to-business type of transactions wherein the transactions of goods or services between businesses is done.
Such B2B relationships can exist when there is exchange of one category of products or services. For example, an enterprise dealing with a particular product range will transact with a bulk buyer limited to the same category.
Formerly, this term was used to explain explain electronic communication between business and enterprises to separate it from B2C type transactions, but now its is also used for marketing purposes.
Formerly the term tended to describe industrial marketing or capital goods marketing only. However, today it is widely used to describe all products and services used by enterprises.
B2B application is essentially used when large processes are required between trading partners and in much higher volumes than business-to-consumer (B2C) applications.
For B2B, standards like UN/EDIFACT, ANSI ASC X12 are used most popularly.
B2C is a Business-to-consumer transaction. It is a form of electronic commerce in which products or services are sold from a firm/business or company to a consumer directly.
B2C e-commerce has the following advantages:
- Purchasing is faster and more convenient.
- Prices change instantaneously as per the market requirements.
Challenges faced by B2C application
The difficulties faced by B2C e-commerce are building traffic and maintaining customers. It is more difficult for the smaller firms to enter the market, sustain itself and also to remain competitive. Also it is very difficult for them to acquire new customers online as they are required to be attracted every time by offering price discounts.
Difference between B2B and B2C
Customer requirement: B2C emphasizes on individual customer transactions, while B2B focuses on other businesses as the consumer. This variance generates different needs for B2B applications.
Type of order: Repeat and standing orders are a common requirement of B2B type of transactions. Whereas the exact opposite is there in case of B2C transactions.
Type of payment: Type of payment is also a different in B2B. When any purchase is made, varied forms of payment such as lines of credit and open orders are used. B2B are required to be specially designed with such applications and requirements.
Type of search function: Next difference is the type of search function in B2B applications where a catalog to is not necessarily required.
Type of connection: In B2B application dealings, in order to purchase, there is a connection to one partner or several trusted. Since the dealings are generally with static list of trading partners, virtual private network (VPN) technology can be used to provide secure access to selected applications inside the firewall. This avoids a need to duplicate the data and applications outside the firewall.
Complexity: B2B marketing is generally considered more complex and difficult than B2C marketing the reason being that there are often more than one decision-makers involved in a B2B sale looking from a buyer's perspective.