Fireside Chat By Professor Prakash Bagri, Associate Dean – Corporate Engagement, Indian School of Business, Professor Ashish Sinha, Professor of Marketing at UTS Business School and Senior Research Fellow at Indian School of Business, Mr. Rahul Kohli, Advisor Higher Education, and Mr. Santosh Nema, Founder and Chief Executive Officer of bmatpro.com, a B2B e-commerce site for Building Materials

Date: July 3, 2020
Compiled by Minal Agarwal, Manager, ISB-Centre for Business Markets

Is there a Collison of B2B and B2C in the organisations and what is B2B2C?

Traditionally B2B (Business markets) and B2C (Consumer markets) have had a distinct treatment and approach in Industries as well as in academia, and this demarcation has been well established over the years. However, increasingly, when it comes to the actual buying process of the customers or selling process of organizations, it is becoming increasingly difficult to demarcate a product as catering to B2B or B2C markets. The same product becomes B2B, or B2C depending on the customer who purchases it.

Organisations have maintained the distinction between the Business markets and Consumer markets for quite some time now, where they are either catering primarily to Business markets or Consumer markets. At the same time, there exist organisations that cater to both B2B and B2C markets simultaneously. However, they continue to treat their marketing approaches differently for both. Industries such as Pharmaceuticals, Financial Institutions, and Information Technology have significant sales coming from business markets, but the end-users of their products are consumers. On the other hand, there are companies such as Cash n Carry retail whose primary channels are B2C, but it is ultimately intended for B2B customers.

This leaves us with a key point that Business markets do not exist in silos: It is fine to have a separate division of B2B and B2C, but it is equally important to understand the linkages between them.
With technological innovations and increasing digitization, changing markets, and user behavior, we are witnessing an emergence of disruptive business models, such as e-Commerce and home deliveries, which are platform-based businesses. They cater to both Consumer markets as well as Business markets. Due to this new development, there are two distinct phenomena taking shape in organisations:

1. The advent of a greater commonality & fluidity in the customer journey, the buyers’ mindset, and customer engagement strategies across both the classical business & consumer segments.
2. The emergence of a third breed, commonly called Business to Business to Consumer (B2B2C), which combines B2B and B2C for a complete product and service transaction.
This changing scenario of business leaves the marketers who find themselves at the intersection of both, with a huge challenge of how to manage these shifts and the new sets of skills and capabilities required by marketers to thrive in this new business scenario.

To address this, organisations need to understand where precisely the Collison between B2B and B2C happens:
1. Customer Level: It is evident that there is no collision at the customer level as the customer gets the best deal due to the competition between B2B and B2C
2. Trade Channel Level: This is where the huge conflict happens as conventionally there are separate channels for B2B and B2C, and if organisations directly start approaching the end customers, the business channels will perceive this as a direct encroachment to their territory and erosion of their profits
3. Internal B2B and B2C Teams: Most of the companies are not able to differentiate between B2B and B2C sales. Moreover, there is a skinny line between the two, which is further getting diffused in this new digital era
4. Top Management Priority: The senior management is the final decision-maker, and most of the time, their decisions are biased based on the parameters such as meeting their quarterly targets and getting big customers

For successful commingling of B2B and B2C markets, it becomes essential for organisations to have clarity on managing this shift and ensuring the balance across functions, especially sales and marketing. The three key points which every marketer should follow are:
1. Communicating clearly to all the stakeholders
2. Maintaining the margins at different levels involved and keeping their profits protected
3. Selecting the right people with the right mindset and skills for the Sales and Marketing teams

As per a study done by Smart Insights, a digital marketing firm, the key marketing trend for B2B for the year 2020, despite COVID-19, will be Personalization. Organisations must remember that even in the case of business markets, they are ultimately dealing with people. Therefore, organisations must understand their customers and address their needs.
Organisations which have mastered the following six parameters will win in their chosen markets, going forward:
1. Customer-Centric engagement: In this digital era, B2B organisations need to be more customer-centric then they were ever before.
2. Ambidextrous approach: The Sales and Marketing process should be done seamlessly between both B2B and B2C segments as well as between online and offline channels.
3. Brand awareness: The primary focus of an organisation should be on building their brand. Due to the lesser face to face interactions happening with the customers, a known brand will have a higher chance of a recall, and customers tend to recommend a brand more.
4. Use of emergent technologies: Artificial Intelligence, Chatbots, Augmented Reality and Virtual Reality are among some emergent technology tools that organizations can deploy to manage their long tail of customers better.
5. Analyzing data for decision making: There is an abundance of data available, and those companies that can capture data points and make informed decisions based on relevant data analytics will have the edge over others.
6. Using omnichannel marketing to influence customers: There is a disconnect between buying and selling processes in organisations. To address this, organisations should have touchpoints available through multiple channels that would enable customers easy access in case of any requirements.