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Differentia Risks Between Business Marketing And Consumer Marketing

Differentia Risks Between Business Marketing And Consumer Marketing

It is understood that business marketing involves the buying and selling of goods or services between businesses usually in the form of wholesale to retailer. It is also understood that consumer marketing largely involves the buying and selling of goods or services between a business and a consumer in the form of a retailer to the final customer.

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However each of these methods involves different levels of risks. Because the wholesaler in a business marketing situation can opt to use branding in order to influence the consumer marketing situation, it is worthwhile to examine these relative risks. Understanding those risks might prove crucial in making a decision about the marketing strategy.

The first crucial difference is related to numbers of people involved. The consumer marketing situation would normally involve less people and can involve as few as only two people. It can take such simplistic forms as batter trade. The business marketing people will involve a larger number of people often including competitors within a niche market. With a greater number of people comes the greater propensity to for mistakes to occur.

The resolution of conflicts then becomes a collegiate activity that can take up an inordinate amount of business time. The involvement of actual or even potential business rivals can further complicate the process as they seek to obtain a competitive advantage.  Even where the organization has competitive advantage, the communal nature of trading means that other organizations will soon work out the competitive advantage. They may soon import it within their own companies thus reducing the individual benefit.

The nature of business marketing means that a single mistake at the beginning of the process is amplified. The decision makers are not entirely independently powerful because they do not work outside their own business community. The large-scale nature of the purchases means that any one mistake in a single purchase is multiplied by a very large number of transactions leading to massive losses.

In fact employees who normally transact on behalf of business marketing parties are usually more stringently vetted than those who transact via the commercial route. The messing up during a contraction transaction will almost certainly lead to termination of employment.

Consumer marketing has its own risks such as the lack of guarantees and the relative ease with which each party can withdraw from transactions. However both the parties who are involved in a consumer and retailer relationship have the power and discretion to make a decision. This avoids the bureaucratic nature of the business marketing model. The purchases are also relatively small in number and therefore any generic mistakes can easily be written off when compared to a similar situation in the business marketing model.

What then should the marketing manager do with this information about the relative risks between business marketing and consumer marketing? They will need to make an assessment of where the majority of their business transactions lie. After assessing the relative merits and demerits of each model, they can then choose whether to take a dual approach or use just one of the methods.