Please explain how mass marketing vs. individual marketing correlates to brick-and-mortar marketing vs. online marketing? How do the steps in the purchasing and the decision-making models differ for B2B vs. B2C customers?
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1. How does mass marketing vs. individual marketing correlates to brick-and-mortar marketing vs. online marketing?
For marketers, the evolution from mass to micro marketing (i.e., individual?) is a fundamental change driven as much by necessity as opportunity. America today is a far more diverse and commercially self-indulgent society than it was in the heyday of the mass market. The country has atomized into countless market segments defined not only by demography, but also by increasingly nuanced and insistent product preferences. In other words, it has become a very individualized society and thus micro-marketing (also referred t individual) is over-riding mass marketing. "All the research we're doing tells us that the driver of demand going forward is all about products that are 'right for me,"' says David Martin, president of Interbrand Corp. "And that's ultimately about offering a degree of customization for all." (See http://www.businessweek.com/magazine/content/04_28/b3891001_mz001.htm for an excellent write-up).
Example: McDonald's now devotes a third of its U.S. marketing budget to television, compared with two-thirds five years ago. Money that used to go for 30-second network spots now pays for closed-circuit sports programming piped into Hispanic bars and for ads in Upscale, a custom-published magazine distributed to black barber shops. To sharpen its appeal to young men, another of its prime target audiences, McDonald's advertises on Foot Locker Inc.'s, in-store video network. The company zeroes in on mothers through ads in women's magazines such as O: The Oprah Magazine and Marie Claire and on Web sites like Yahoo! and iVillage Inc.). "We are a big marketer," says M. Lawrence Light, McDonald's chief marketing officer, echoing Stengel's disavowals. "We are not a mass marketer." (http://www.businessweek.com/magazine/content/04_28/b3891001_mz001.htm).
Online and Brick-and-Mortar as part of the overall (i.e., individual or segmented) marketing scheme
Clearly, there is a move away from mass marketing to more individual or segmented marketing scheme. Thus, online marketing and Brick-and-Mortar Marketing are often used together, and in conjunction with other marketing schemes as well. Whereas on-line marketing can reach a wider audience, it can miss a large portion of the potential off-line buyers. Brick-and-Mortar retailers can pick up some of these potential off-line buyers, as well as give more attention to promotion.
Example: For example, online marketing only captures a small portion of buyers. For example, ComScore's study followed searchers 12 weeks from a "start query" for computer or consumer electronic products to their eventual purchase for. Of all conversions, 92 percent took place offline. Would you structure an offline marketing campaign based on the buying behavior of only 8 percent of your audience? If your search ad campaign's success in this vertical is measured only by conversions on your Web site, you're missing 92 percent of search-generated buyers. You're literally optimizing a search spend to maximize conversions on only the tiniest sliver of the potential buying audience. Chances are, these aren't the only online vertical markets with offline conversion dramatically exceeding the online opportunity. This means retailers who focus only on online return on investment (ROI) could choose to spend 10 times more on search marketing than they currently are and still net positive ROI. By underspending, they fail to reach the majority of their potential customers (http://www.dhaus.com/blog/2005/03/web-vs-brick-and-mortar-strategies.html).
Therefore, never count out brick-and-mortar retailers (both retail stores and on-line). They have money, domain experience, and deep supplier relations. When a B&M decides to make a move into a space, it can cause real pain to other e-tailers, so always assume that tomorrow you will be competing against them. And know how you will prevail! (http://www.entrepreneur.com/Your_Business/YB_SegArticle/0,4621,289940,00.html). In fact, many marketing strategies work for both on-line and Brick-and-Mortar Marketing. Four of these factors are: emotions, credibility, music and direct-to-brain transfer. Ignoring these factors could cause you to lose image, will do nothing for sales, and most assuredly will eat up profits at an enormous rate. These factors work in print, radio, TV, in-person, or the Internet. They are universal (see attachment).
Example: Supply Chain Management from Brick and Mortar to Web Based Environment for Expedia was advantageous for the company. During the 1990s, inventory management proved to be one of the most important business applications of supply chain management. Over time, with a shift in the state-of-the-art supply chain management, the inventory has moved into just-in-time inventory systems, which has wrought new efficiencies throughout the supply chain (Cooper and Madigan, 2004). Since moving of Expedia on the Web-based environment, it prospered (http://www.essaysportal.com/papers/supply-chain-management-for-expedia.html).
Example: Hewlett Packard brick- and-mortar marketing strategies: Philip Kotler defines the marketing mix as the set of marketing tools that a firm uses to pursue its marketing objectives in the target market. Most marketers classify these tools into broad groups that are known as the four P's of marketing: product, price, promotion, and place. To maximize profits for its target markets, Team U needs to give equal attention to all four marketing tools, and Personal Touch will use these strategies as a basis for their plan. The product has already been determined. Personal Touch will produce handmade soaps that ...search engine found hundreds of companies selling handmade soaps online. Personal Touch expects that its customer base will be well educated and make a sizable income, and that is the portion of the population that makes the most online purchases. The company will also use standard brick-and-mortar stores, and will place their products in retail shops such as Bed Bath & Beyond and Target, in addition to smaller and individually owned boutiques that may be able to give Personal Touch more attention in their promotions. (http://www.researchpapersassistant.com/term-papers/2462/hewlett-packard-brick-mortar-marketing-strategies.html).
2. How do the steps in the purchasing and the decision-making models differ for B2B vs. B2C customers?
The major difference between B2B (Business to Business) and B2C (Business to Customer) in Internet terms is the role of the B2B website. B2B concerns itself primarily with supply chain management. These are portals that allow businesses to deal directly with their suppliers and distributors online. Purchasing Steps: Allowing electronic transfer of orders, invoicing and even payments. Wholesalers, distributors and manufacturers fall in this category.
B2C websites are intermediary portals to link customers to suppliers. Some of the major ones are ebay, an auction site. Yell, an Internet version of yellow pages and ZDNet a technology market place. All of these businesses exist primarily on the Internet. They are what are known as e-businesses (electronic businesses). All of them can be classified under one general heading, market places.
Purchasing Steps: B2C concerns itself with selling to the end user. Typically these are sites like Amazon, online book retailers, lastminute.com, a "good times" portal. These sites are more interested in passing the goods to the end user. There is likely a slight difference between them and your business. They are actually Internet based. That is to say they exist primarily on the Internet. Offices and warehousing are borne from necessity of their Internet success.
Purchasing: A B2B site deals primarily with other businesses, not the general public, a B2C site sells directly to the end user. B2B sites normally handle a lot more than just sales of products; they are a portal to conduct business transactions. Let's look a little closer at each.
EXTRA INFORMATION (excerpt)
Business-to-consumer electronic commerce provides the direct commercial transaction flow between individual consumers (buyers) and business organizations (sellers). The traditional selling point between a business and a
consumer started out with a buying decision made by a consumer. This decision to buy a product is based on the economic theory of the needs, budget, and satisfaction analysis on all other competing needs (Tomlinson, 1990; Dickson and Wilkie, 1978). Once a decision (to buy) is made, the purchase is carried out based on the available market driven by the basic demand-supply concept (Gardiner and Dixit, 1987; Gellings and Chamberlin, 1993). In this B2C market, the sellers set the price. This price consists of the cost and profit (or loss). The profit (or loss) is determined as a compromise between how much a buyer wants to buy and how much a seller wants to sell.
Electronic commerce evolves the traditional buying-selling process to another setting where buyers and sellers are connected on a computer network. Since the only differences between the traditional selling environment and the virtual selling environment are the readiness and availability of product information at all the time, B2C electronic commerce is normally designed to capitalize on this fast information flow while retaining traditional buying-selling triggering mechanism.
This section lists four popular B2C electronic commerce models: psychological model, economics model, decision science model, and convenience model.
a. Psychological Model.
A B2C electronic commerce environment can be set up utilizing the understanding of human psychology. In this set up, the main objective is to lure the consumer into making a purchase decision when he (or she) doesn't have to. There are two basic techniques of selling in this psychological model: attractive advertisement, and vested commitment. An attractive advertisement technique is the set up of the buying environment as a pleasant experience where examining a product listed on a computer network is as realistic and attractive as possible. In his setting, there are two approaches: direct appeal, and indirect appeal. Direct appeal is the process of making a product as attractive as possible when visually examined. Indirect appeal is the process of using some association to a product to make the prospect of using that product as attractive as the promoted association. In the case of direct appeal, it is popular to take advantage of a virtual visualization system to allow a prospective buyer to see a product through a camera view while letting him (or her) move the camera around the product to obtain a 3-dimensional perspective of that product. At the same time color scheme (background and contrast) are utilized to make the product as appealing as possible. In the case of indirect appeal, the same visualization system can also be used to focus on an association of the product, normally a public figure using a product or a setting where a product is used, to appeal to the prospective customers. A public figure must be attractive and well known to make the buyer deluding into a fantasy that buying and using the product will transform him (or her) into similar prestigious status and attractive appearance. Current fast pace of data transmission provides a steady streamline of video data from sellers to buyers serving this indirect appeal approach. A vested commitment technique is the set up of the selling environment as a competitive game where the buyers spend time playing ...
This solution explains how mass marketing vs. individual marketing correlates to brick-and-mortar marketing vs. online marketing, as well as how the steps in the purchasing and the decision-making models differ for B2B vs. B2C customers. Supplemented with one artilce on marketing ideas that work both for brick and martar and online marketing.