Bienvenue - Welcome!

Bienvenue sur le blog de la Relation BtoB ! Welcome to the B2B Relationship Blog!
Ce blog se veut un lieu de partage pour tous ceux qui s'intéressent aux relations inter-organisationnelles. Son auteur aime l'idée d'un "slow blog" où l'on s'arrêterait pour penser un peu... This blog aims at becoming a sharing platform for all those interested in inter-organizational relationships. Its author likes the idea of a "slow blog" where you take time to think for a while...
Sur la page de bienvenue, vous trouverez des points de vue, des discussions sur les sujets indiqués, des billets d'humeur, des commentaires de lectures, des infos et agendas, et ce que nous en ferons collectivement ! On the welcome page, you will find points of view, discussions on labelled topics, reactions, comments on readings, information and agenda posts, and what we shall collectively make out of it!
Sur la page "Formation", vous trouverez des solutions de formation, soit en tant que participant, soit en tant que formateur... A ce propos, est-ce toujours celui que l'on croit qui apprend le plus ? On the Training page, you will find training solutions, either as a trainee or as a trainer, especially teh author's published cases... By the way, are those who learn most always the ones we think...?

mercredi 7 mai 2014

B2B vs. B2C - Why Deny the Constrast?

“The traditional categories of b-to-b and b-to-c marketing are converging, and frankly, it's about time… I've always believed that making a distinction between the two is irrelevant.” Such was Barbara Apple Sullivan’s introductory statement in her article entitled “I Call B.S. on B-to-B and B-to-C” published on the Ad-Age platform on April 8, 2014. Interesting observation in the field considered by the author, founder and Managing Director of the Sullivan Agency… 

But isn’t it an unfair generalization? Let’s enter the debate.

Pertinent questions, yet contestable conclusion

According to Barbara Apple Sullivan, « all companies face the same challenge: standing for one cohesive idea and tailoring its messaging to a network of audiences, including professionals and consumers ». Based on this statement, the author considers three key questions for succeeding in brand strategy:
  • “Does my brand strategy examine my business' entire ecosystem?”
  • “Does my brand strategy take into account the emotion felt by every person who interacts with my brand?”
  • “Does my strategy effectively use a diversity of channels to reach multiple constituencies at once in creative and unusual ways?”

 These questions are very pertinent, indeed.
  • Question 1 reaffirms the notion of ecosystem, which too many companies tend to ignore in their communication, for being too focused on their first order customers.
  • Question 2 recalls that every company relies on people, that decisions stem from these people, and that no human decision, all contexts considered, is free from emotions and subjectivity. It rips up this hard-lived idea that decisions taken by organizations are systematically more objective and rational than decisions taken by individual consumers.
  • Question 3 recalls that the advent of the digital economy has multiplied the occasions of contacts with individuals, thus favoring more encompassing communication trends, paradoxically perceived as less intrusive ("Inbound Marketing"). Although expressed first in consumption markets, this phenomenon has now largely reached the inter-organizational context.

Yet, in reality there are wide differences in situations, methods and practices between the BtoB and BtoC contexts; this is scheduled to be evidenced on our “Blog dela Relation BtoB” by end of June, 2014. For the moment, after clarifying the respective fields of the B2B and B2C contexts, let us consider these differences along three key dimensions of the Customer-Supplier relationship: the “horizontal” and “vertical” dimensions of market structures, and the “contact points” between a supplier and its first-order customers (Fig. 1).

Figure 1 - Production beams and market systems 

Towards a dividing line between B2B and B2C

The « B2B and « B2C » phrases define modes of economic exchanges (i.e. involving payments against offers), encompassing industrial and service activities, public and private sectors, for-profit and not-for-profit activities. In fact, “B-to-B” means something like “relationship between organizations”. In this sense, one can say that the Salvation Army’s accountant operates in a BtoB context. Within the scope defined above, let’s now assume (for the sake of simplicity, true enough), that B2B and B2C are mutually exclusive. Then defining one of them will lead us to our dividing line. We precisely suggest to define B2C relationships as economic exchanges verifying four necessary and sufficient conditions:
  • Suppliers are formal organizations (associations, societies, companies);
  • Their product and service offers are intended for individuals (the latter potentially being organized into informal groups - but only informal ones);
  • The products and/or services are offered as they stand: they do not bear any further transformation before purchase;
  • The seller communicates directly and freely with its targeted consumer segments.

Following these rules, selling a ready-made dish under a National Brand (for example, “Barilla”) through a retail store well belongs to the B2C domain: well-known and established supplier organization (the Barilla Food company), offer intended for individuals (even if the dish may exceptionally be purchased for a professional use, through an expense report), product offered as it stands (for example, no pre-purchase repackaging), direct communication of the manufacturer with its consumers through selected communication channels. A contrario, selling the same product under a private label (for example, Tesco) belongs to the B2B domain (albeit in a variation of it characterized by “trade marketing”) because the product‘s manufacturer does not directly communicate with its consumers and its principal clearly is the distributor (which takes consumer communication under his responsibility).

Contrasts along the horizontal dimension of market structures

This dimension is about the variability and nature of the customer segments which a supplier may encounter. The B2B environment mainly distinguishes itself from the B2C one through:
  • A wider diversity of the demand facing a specific competency of the supplier;
  • Very different and much more diverse segmentation criteria and differenciation modes;
  • Consequently, a greater criticity of market segment targeting.

Several managerial implications stem from these observations, substantiating the specificity of the B2B horizontal dimension relative to that of the consumption markets:
  • A much reduced use of statistics, as customers are much fewer: more qualitative approach;
  • Criticity of targeting for adapting the supplier organisation’s resources to the market potential (especially, potentially surging marketing costs due to a large spread of market studies on very constrasted segments);
  • Necessary, albeit sometimes difficult, arbitration between direct relationships with customers and solicitation of distributors’ networks (for “small” customers, more numerous);
  • Development of “key account programs” for customers whose individual behaviors may affect the supplier in its strategy, profitability or image.

 Contrasts along the vertical dimension of market structures

What is at stakes here is the structuration of customer systems into vertical chains, called “customer branches”, characterizing the B2B environment. Here, we do not consider distribution intermediaries, met as much in the B2B as in the B2C context but, rather, systems which may be very complex where an offer (most often a tangible product completed by a bunch of services) may be transformed along customer branches, remaining or not perceivable on all or part of their extent. Here, the B2B context mainly distinguishes itself from the B2C one through:
  • Sets of much longer customer branches, with very variable, complex structures, reticulated down to final consumption;
  • A large variability in the portions of these chains on which an offer is perceivable;
  • Actors (organizations and individuals) of very constrasted sensitiveness to an offer, spread all along the customer branches,
  • A very wide variety of influence powers.

Based on these observations, several managerial implications substantiate the specificity of the B2B vertical dimension relative to that of the consumption markets:
  • Impact of the nature of the added value for the first order customer: process advantage (often invisible for its own customers) vs. economic advantage (potential effect as a price decrease for its own customers) vs. “specialty” advantage (better perceived quality for its own customers, potentially resulting into a sales price increase);
  • Necessary evaluation of the offer’s competitive situation at each stage of the customer branches where competition may be expressed;
  • Identification of strategic actors in and around customer branches and necessary anticipation of their motivations;
  • Choice of an adapted communication strategy: “push” towards the first order customer or “pull” towards the most pertinent dowsnstream targets.

Contrasts on “contact points” with first-order customers

In the B2B context, the “first order” customer (the only customer type met in B2C, with the exception of retail distributors) bears a particular importance. What we here abusively call the “contact point” is the interfacing mode between the supplier and this first order customer. Numerous critical differences here characterize the B2B relative to the B2C one, especially the following:
  • A constituted group of people meets another constituted group of people, with collective and individual strategies which may be synergistic or conflictual;
  • Customers’ and suppliers’ investment levels into the relationship are usually much more balanced;
  • Negotiations generally last much longer.

These observations lead to managerial implications which underline the specificity of the B2B “Contact Point” dimension relative to that of the B2C one:
  • A long-lasting relational management with individual customer representatives whom you personally meet and whose faces and names you know;
  • The criticity of a deep knowledge of the customer organizations, with their strengths and weaknesses, strategic objectives, targeted markets, and of the power games that take place within these organizations;
  • The need for a sales force fitted with good technical knowledge (“Technical Sales Reps” typical profiles);
  • The collective and individual abilities to manage complex situations and to work under a project mode.

Mingling the B2B and B2C contexts is abusive, contestable and detrimental

At the end of this appraisal, one cannot deny a real convergence in communication methods between the B2B and the B2C contexts. It is essentially due to the development of digital marketing techniques and to what is now referred to as the “Big Data”, the phenomenal, exponential increase of quantitative behavioral market data. However, the “syncretic” argument mingling the B2B and B2C contexts is abusive, contestable and detrimental. Indeed, essential differences exist, beyond mere communication tools, as much in situations and challenges as in working techniques and methods. These differences even decisively affect the needs in profiles and competencies for each of these contexts. An implicit confusion exists in the teaching of marketing where, too often, consumer marketing, with its contextual cases and examples, is introduced as the fundamental marketing model, while the large majority of marketing professionals work in the B2B context. This is why the pertinence of specific trainings in B2B Marketing has not waned, even if the latter don’t always exhibit as much glamour as brands like L’Oreal or LVMH.

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