The Major Differences Along The Supply Chain Between The Business To Business And The Business To Consumer Marketing

3523 words - 15 pages

1. IntroductionIn order to identify, analyse and evaluate the major differences along the supply chain between the business-to-business (B2B) and the business-to-consumer (B2C) marketing in the manufacture and retailing of fast-moving-consumer-goods, it is important to define the different terms.According to Wright, the supply chain can be defined as 'the entire network of suppliers, factories, warehouses, distribution centres and retailers that participate in the process from raw materials to finished products.'(www.soltempo.com)The fast-moving-consumer-goods (FMCG) can be defined as 'the retail goods with a short shelf life either as a result of high consumer demand or because the prod ...view middle of the document...

2.2. The competitionIn B2B, the different participants are the raw material suppliers, service suppliers, the producers or manufacturers, intermediaries or resellers, retailers, government and not-for-profit. The competition comes mainly from few players as 'the products must match a particular solution sought' (Wright 2004). With technology and the internet, the competition is more and more international. It focuses on functional benefits offered and after sales services as functionality and reliability are crucial for an organisation.In B2C, the main participants are the retailers, the wholesalers and the end consumers. In the FMCG, there has been increasing market concentration in recent decades. There is a reference to the 'big four', Tesco, Asda, Sainsbury's and Safeway. The competition is global and focuses on brand and prices as these factors have more impact on consumers. (www.blackwell-synergy.com)2.3. The nature of the demandThe demand of B2B products in the FMCG market is influenced by the demand from the end consumers. Morris (2001) says that 'the demand for industrial goods is ultimately derived from the demand for consumer goods.'In B2B, the demand is fluctuating. An increase or decrease in the consumer demand will have impact on the demand for manufacturing operations. There are also fewer customers. 'Not buying for a reason or other can have an immediate and disastrous effect' (Wright 2004). In B2C, a fall in sales can take time and can be compensated by finding new customers as they are millions.The B2B demand is relatively inelastic. An increase or decrease in the price of the product or service will not significantly alter the demand for the product in the short run. In B2C, however, the demand is relatively elastic. If the price decreases, consumers are motivated to buy. (Wright 2004)2.4. The research marketIn B2B, Wright states that 'the pressure to get industrial products with the right benefits to market ahead of the competition is the main concern' (Wright 2004). Secondary researches such as the market, the trends are more used than primary researches as organisations' activity is based on economic and industrial trend.In B2B, there is a focus on making the products matching the consumer demand. Secondary researches are needed but primary researches about consumers' psychology are more important as their wants and needs are changing over the years. (Minett 2002)2.5. The segmentationIn B2B, customers are segmented by industry and individual company needs as they are not numerous. There are two types of segmentation, the macro segmentation and the micro segmentation. Both must provide the supplier with added value to offer.The macro segmentation uses different factors: it distinguishes 'one sector from another, one industry from another and one type of organisation from another' (Wright 2004). Segmentation is by:type of market: industrial and/or consumer marketsgeographical areatype of industries: manufacturing, service...

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