What Is B2C? (With Types Of Business-To-Consumer Marketing)

By Indeed Editorial Team

Published 20 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

The business-to-consumer (B2C) sector involves companies that offer products and services directly to consumers. Different types of businesses can have varying types of customers depending on their particular industry and the demand for their products and services. By understanding what is involved in business-to-consumer transactions, you can become better informed about managing your business and providing excellent service to your customers. In this article, we answer the question, 'What is B2C?', explain how it works, discuss its history, show you how it differs from business-to-business (B2B) commerce and list the types of B2C marketing.

What is B2C?

To answer 'What is B2C?', it is essential to study different business-to-consumer transactions. This type of commerce involves using sales and marketing techniques that directly focus on and target the intended customers. The businesses sell their products and services straight to the consumer without requiring the support of wholesalers or other middlemen. This can enable businesses to save on overhead costs and increase their overall profit margins. Small and middle-sized companies generally follow the B2C model, and it is also one that online companies follow.

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How does B2C business work?

B2C business works by providing services and products directly to the consumers. Traditional B2C companies keep the products for sale on their premises or the premises of partner businesses and consumers can walk in to purchase them. They may also deliver products and services to the consumer's location on demand.

Online B2C companies display products and services on their business websites or other commercial websites and shoppers can purchase them online. Depending on what they buy, they can download the products and services or have them delivered to their address. Along with building customer-friendly websites, online B2C businesses create product or service demonstration videos and invest in emotionally charged advertising to attract customers.

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What is the history of B2C commerce?

B2C commerce has been around since business transactions became a part of human society and it remains one of the most popular and well-known sales models. There are various ways in which businesses reach out directly to their target customers, including giveaways, regular mail, live events, radio, television, films, music and online content. Michael Aldrich was the first to use teleshopping, involving television, computer and phone to sell products directly to consumers in 1979. Online e-commerce evolved with the advent of the Internet.

In India, Internet access became available to the wider population in the late 1990s. Fabmart became the first e-commerce website in 1999. E-commerce developments have been fast since then and continue to expand across different industries. Consumers are now more likely to shop online for products and services and choose those that are more affordable as a result of that. Many traditional brick-and-mortar retailers now also maintain online shops and mobile applications to remain competitive.

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How does business-to-customer differ from business-to-business?

A business-to-customer model differs from a business-to-business model in the following ways:

Targeted customers

Companies with a B2C approach cater directly to their customers, while B2B companies provide products and services to other businesses. Offline and online retailers that sell straight to customers are B2C businesses, while offline and online businesses that sell to wholesalers and other companies are B2B businesses. Aside from this primary difference, B2C and B2B companies differ in the sales and marketing techniques that they use to attract their target customers.

B2C companies usually attempt to connect with customers on an emotional level and convince them that their services and products can make a positive difference in their lives. They monitor market trends to give the customers what they want. B2B companies also monitor trends, but their focus is more on fulfilling the practical requirements of their business clients.

Buying decisions

In terms of who makes buying decisions for products and services, B2C and B2B vary. For B2C firms, the consumer makes the buying decisions, either because they require a product or because they are following a trend. The purchases made from B2C companies are generally individual purchases and limited in volume. For instance, a customer may usually buy one or two pairs of shoes rather than a dozen pairs.

In B2B companies, the managers or other upper-level executives may make the buying decisions after getting them approved by the company head or owner. The purchases may be for manufacturing or retail purposes and in bulk volume. For instance, a paper company may buy raw materials in bulk to manufacture paper products.

Pricing structure

B2C companies generally have a similar pricing structure for the same products and services. Despite the difference in prices, it is unlikely to have wide fluctuations in costs as the companies understand that they might lose customers if the prices vary a lot from their competitors.

The pricing structure may differ more significantly for the products and services offered by B2B companies. For instance, a cotton company may price its raw cotton higher than another company since it is of better quality. Yet in both cases, the companies may be open to price negotiations with consumers getting better prices and payment terms.

Advertising techniques

The advertising focus for B2C companies is on creating an emotional appeal that is likely to influence their target customers to buy their products and services. Their sales cycles may depend on current market demands and trends. B2B companies mostly concern themselves with building strong and long-lasting business relationships with their business clients. For that reason, they generally have longer sales cycles than B2C companies.

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What are the types of B2C models?

Most B2C models fall into the following types:

Direct sellers

The most common and well-known type of B2C model is direct selling. In this model, direct sellers or retailers sell their products and services directly to their customers. They may do this through physical stores, online websites and mobile e-commerce applications. Some direct sellers manufacture or create their products and services and sell them on their own to eliminate the need for wholesalers, retailers and other intermediaries and earn more profits. Other direct sellers are retailers who stock their products or the products of other companies in their business warehouses and sell them through their regular and online retail shops.

Online intermediaries

An online intermediary is a type of B2C model that involves using a broker to connect consumers with sellers. Online intermediaries promote products and services for sale but do not own or make them. They gather information about available products and sales and where people can buy them and present the buying options to consumers in one location. An online intermediary is, for instance, a website providing information about products and services with links to buy them. Generally, online intermediaries focus on businesses and consumers within a specific industry.

Advertising-based models

B2C advertising focuses on attracting visitors to offline and online stores. They may use a range of free content and advertising techniques to make people aware of their business brands and their products and services. The businesses rely on high-quality content to drive traffic to their shops and websites and convert visitors into customers. Once they start drawing large volumes of customers, they may earn more revenue by publicising their marketing clout and selling advertising spaces in their physical and online stores to other businesses.

A large media outlet that provides free access to its content to consumers and sells advertisement spaces to various businesses is an example of the advertising-based B2C model.

Community-based models

Community-based B2C models rely on offline and online community groups to market their products and services. Generally, community groups form around the common interests of their members, which makes it advantageous for businesses to market particular items related to these interests to them. For example, a company selling garden plants and equipment may see good sales results from marketing their products and services to gardening groups. Businesses following the community-based model research demographics and target the specific communities that are likely to buy from them. They may also create products and services for their target customers.

Fee-based models

Fee-based B2C commerce models charge visitors a fee to access their premises, websites, products and services. The fee may be a one-time charge or a short-term or long-term subscription and there may be different fees to get access to various products or service levels. An Internet service provider that offers monthly or yearly subscriptions to end-users is an example of a fee-based B2C model. Other examples include entertainment outlets and online streaming services that charge a subscription fee for access to films, TV shows and music and media companies that allow only subscribers to access their content.

Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.

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