Consumer-to-business

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Consumer-to-business (C2B) is a business model in which consumers (individuals) create value and businesses consume that value. [1] For example, when a consumer writes reviews or when a consumer gives a useful idea for new product development then that consumer is creating value for the business if the business adopts the input. In the C2B model, a reverse auction or demand collection model, enables buyers to name or demand their own price, which is often binding, for a specific good or service. Inside of a consumer to business market the roles involved in the transaction must be established and the consumer must offer something of value to the business. [2]

Contents

Another form of C2B is the electronic commerce business model in which consumers can offer products and services to companies, and the companies pay the consumers. This business model is a complete reversal of the traditional business model in which companies offer goods and services to consumers (business-to-consumer = B2C). We can see the C2B model at work in blogs or internet forums in which the author offers a link back to an online business thereby facilitating the purchase of a product (like a book on Amazon.com), for which the author might receive affiliate revenues from a successful sale. Elance was the first C2B model e-commerce site.

Overview

C2B is a kind of economic relationship that is qualified as an inverted business type. The advent of the C2B scheme is due to:

Positives and negatives

Nowadays people have smartphones or connect to the internet through personal tablets/computers daily allowing consumers to engage with brands online. According to Katherine Arline, in traditional consumer-to-business models companies would promote goods and services to consumers, but a shift has occurred to allow consumers to be the driving force behind a transaction. [2] To the consumers benefit, reverse auctions occur in consumer to business markets allowing the consumer to name their price for a product or service. A consumer can also provide value to a business by offering to promote a business products on a consumers blog or social media platforms. [2] Businesses are provided value through their consumers and vice versa. Businesses gain in C2B from the consumers willingness to negotiate price, contribute data, or market to the company. Consumers profit from direct payment of the reduced-price goods and services and the flexibility of the transaction the C2B market created. [2] Consumer to business markets have their downfall as well. C2B is still a relatively new business practice and has not been fully studied. [3]

One weakness of the consumer-business model is that consumer information and privacy could be compromised. For example, businesses might choose to secretly analyze consumer spending by using sensitive information such as purchase history, age, race, location, etc.

Distinguishing between traditional business models

Consumer to business is an up and coming business market that can be utilized as a company's entire business model or added to an already existing model. [2] Consumer to business (C2B) is the opposite of business to consumer (B2C) [4] practices and is facilitated by the internet or online forms of technology. [5] Another important distinction between the traditional business to consumer market is that the consumer chooses to be a part of the business relationship inside a consumer to business market. For a relationship to exist though both parties must acknowledge that it exists, implying that the relationship is important to both participants. [6]

Data and analytics are going to drive the C2B world and enable companies to gain a better understanding of customers. Businesses need to go back to what drives the sales, people. Move away from innovation and the newest technology and go back to who, what, and why of the people interacting with businesses. [7]

Usage in technology

The technology industry has largely adopted the use of consumer-to-business strategies, with social media corporations taking a large part in that growth. [8] For example, companies such as Yelp or TripAdvisor provide a C2B service due to the amount of personal data harvested for use in targeting possible advertising clients. [9] C2B can also be theorized, in the case of review aggregators, to increase the revenue of businesses through more overall knowledge about the company at hand. For example, if a corporation receives many positive reviews on a website such as Yelp, it may help to drive traffic to the company.

Data aggregation

Aggregation of data is a common C2B practice done with many internet corporations. In this instance, the consumer is creating the value of personal information and data to better target them to the correct advertisers. Businesses such as Facebook, Twitter, and others utilize this information in an effort to facilitate their B2B transactions with advertisers. Most of these systems cannot be fully utilized without B2C or B2B transactions, as C2B is usually the facilitator of these.

See also

Related Research Articles

Customer relationship management (CRM) is a process in which a business or another organization administers its interactions with customers, typically using data analysis to study large amounts of information.

E-commerce is the activity of electronically buying or selling products and services on online platforms or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is the largest sector of the electronics industry and is in turn driven by the technological advances of the semiconductor industry.

<span class="mw-page-title-main">Marketing</span> Study and process of exploring, creating, and delivering value to customers

Marketing is the act of satisfying and retaining customers. It is one of the primary components of business management and commerce.

<span class="mw-page-title-main">Sales</span> Activities related to the exchange of goods

Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. A period during which goods are sold for a reduced price may also be referred to as a "sale".

Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior.

<span class="mw-page-title-main">Distribution (marketing)</span> Making products available to customers

Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries. Distribution is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.

Electronic business is any kind of business or commercial transaction that includes sharing information across the internet. Commerce constitutes the exchange of products and services between businesses, groups, and individuals and can be seen as one of the essential activities of any business.

Business-to-government (B2G), also known as business-to-public-administration (B2PA) or business-to-public-sector (B2PS) refers to trade between the business sector as a supplier and a government body as a customer playing a major impact in public procurement. Business-to-government also includes the segment of business-to-business (B2B) marketing known as public sector marketing — a form of business-to-business-to-government (B2B2G) phenomenon, which encompasses marketing products and services to various government levels—local, state/provincial, and national—through integrated marketing communications techniques such as strategic public relations, branding, marketing communications, advertising, and web-based communications.

Database marketing is a form of direct marketing that uses databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. The method of communication can be any addressable medium, as in direct marketing.

<span class="mw-page-title-main">Business-to-business</span> Commercial transaction between businesses

Business-to-business is a situation where one business makes a commercial transaction with another. This typically occurs when:

The eCRM or electronic customer relationship management encompasses all standard CRM functions with the use of the net environment i.e., intranet, extranet and internet. Electronic CRM concerns all forms of managing relationships with customers through the use of information technology (IT).

B2B e-commerce, short for business-to-business electronic commerce, is the sale of goods or services between businesses via an online sales portal. In general, it is used to improve the efficiency and effectiveness of a company's sales efforts. Instead of receiving orders using human assets manually – by telephone or e-mail – orders are received digitally, reducing overhead costs.

Business marketing is a marketing practice of individuals or organizations. It allows them to sell products or services to other companies or organizations, who either resell them, use them in their products or services, or use them to support their work.

An online marketplace is a type of e-commerce website where product or service information is provided by multiple third parties. Online marketplaces are the primary type of multichannel ecommerce and can be a way to streamline the production process.

<span class="mw-page-title-main">Outline of marketing</span> Overview of and topical guide to marketing

The following outline is provided as an overview of and topical guide to marketing:

Business-to-employee (B2E) electronic commerce uses an intrabusiness network which allows companies to provide products and/or services to their employees. Typically, companies use B2E networks to automate employee-related corporate processes. B2E portals have to be compelling to the people who use them. Companies are competing for eyeballs of their employees with eBay, Yahoo and thousands of other web sites. A huge percentage of traffic to consumer web sites comes from people who are connecting to the net at the office.

Customer to customer markets provide a way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Other types of markets include business to business (B2B) and business to customer (B2C).

<span class="mw-page-title-main">E-commerce credit card payment system</span>

Electronic commerce, commonly known as e-commerce or eCommerce, or e-business consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

Business-to-many or B2M is a marketing term for a business that sells their goods or services to other businesses as well as to consumers. Unlike B2B firms that only engage themselves with other businesses or retail firms (B2C) that only contact consumers or the end users of the product, B2M firms do both. It is important to understand that just because an organization does B2M marketing, this does not mean that they target their products and services to everyone. B2M companies, like any other type of company, have a more specific target audience.

There are many types of e-commerce models, based on market segmentation, that can be used to conducted business online. The 6 types of business models that can be used in e-commerce include: Business-to-Consumer (B2C), Consumer-to-Business (C2B), Business-to-Business (B2B), Consumer-to-Consumer (C2C), Business-to-Administration (B2A), and Consumer-to-Administration

References

  1. ↑ "How Big Data Analytics Drive Consumer-to-Business Marketing". January 26, 2016. Archived from the original on January 27, 2021. Retrieved July 24, 2020.
  2. 1 2 3 4 5 "What is C2B?". Business News Daily. Retrieved October 22, 2018.
  3. ↑ Chen, Deng-Neng (October 11, 2006). "An agent-based model for consumer-to-business electronic commerce". Expert Systems with Applications.
  4. ↑ "What is B2C Marketing?" . Retrieved August 23, 2024.
  5. ↑ Doyle, Charles (2016). Oxford Dictionary of Marketing. Online: Oxford University Press. ISBN   9780198736424.
  6. ↑ Raciti, Maria M.; Ward, Tony; Dagger, Tracey S. (March 29, 2013). "The effect of relationship desire on consumer‐to‐business relationships". European Journal of Marketing. 47 (3/4): 615–634. doi:10.1108/03090561311297490. ISSN   0309-0566.[ permanent dead link ]
  7. ↑ "Forget B2B or B2C—It's About C2B". DMNews.com. Retrieved October 22, 2018.
  8. ↑ Leo, Malcolm De (October 28, 2011). "C2B: How Social Media Is Flipping Who Has Control". GreenBook. Retrieved June 22, 2020.
  9. ↑ "Yelp Privacy Policy". terms.yelp.com. Retrieved June 22, 2020.
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