Question

In: Operations Management

2.How does the process of organizational purchasing (b2b) between entrepreneurs differ from the purchase process of...

2.How does the process of organizational purchasing (b2b) between entrepreneurs differ from the purchase process of the client or end user?

Solutions

Expert Solution

B2B (Business to business) and B2C (Business to consumer) have similar marketing efforts by organizations. However, the purchase process is completely different for the different segments B2B and B2C.

  • Decision-making process- For B2C, the decisions are made by the consumer or end-user or sometimes they consult their family members, friends, social network etc. However, for B2B the purchase is based on the approval of the stakeholders.
  • Speed of a sale- The sale is either instantaneous or faster in a B2C purchase process. However, the sale for a B2B would take months. Though it is time-consuming the value of the sale is huge.
  • Relationships with clients- The customer groups are small in B2B segment. The B2C customer group is huge and the prospective customers are millions. Hence, it is pertinent that businesses maintain a long-standing deep business relationship in a B2B segment whereas B2C segment customers are often times allowed to switch to competitive brands due to the existence of millions of customers.
  • Product price- B2C products offer lower prices in the competitive market however they dominate the market. B2B products are very high in price. The long-term contracts might lead to millions of dollars for B2B products.
  • Purchase of technology- Organizations buy technology as it advances to increase revenue, decrease the cost price and deliver products of good quality to the customers. However, for B2B products new technology is not bought. The transaction is a long-term profit oriented process. The purchase is considered as an investment for B2B purchase.

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