UNIT 2

B2C Business: B2c Basics, B2c-Business And Crm, B2c Software Systems, Customer Relationship
Management (Crm)
B2B Business: B2b Basics, Differences Between B2b And B2c, B2b Software Systems, Supply Chain
Management

B2C BASICS
 Business-to-consumer (B2C) is a type of business transaction where a company sells products or
services directly to consumers who are end-users of its products or services.
 B2C sales can be seen in everyday transactions. For instance, when you purchase a new phone or
clothes, eat out at a restaurant, or pay for gas.
 This model is commonly seen in online retail and is characterized by a focus on consumer needs,
preferences, and behavior. Here are the fundamental aspects of B2C eCommerce:

Types of B2C eCommerce Models

 Direct Sales: Businesses sell products or services directly to consumers through their own online
stores or websites.
 Online Marketplaces: Platforms like Amazon, eBay, and Etsy where multiple sellers offer
products to consumers.
 Subscription Services: Businesses offer products or services on a recurring basis, such as
subscription boxes or streaming services.
 Dropshipping: Retailers sell products they don’t keep in stock; instead, they purchase from a third
party and have it shipped directly to the consumer.

Features of B2C eCommerce Platforms

 User-Friendly Design: Intuitive interfaces and easy navigation to enhance the shopping
experience.
 Product Catalog: Detailed listings with descriptions, images, and pricing.
 Shopping Cart and Checkout: Functionality for adding items to a cart, managing orders, and
completing purchases.
 Payment Integration: Support for various payment methods, including credit/debit cards, digital
wallets, and alternative payment methods.
 Customer Accounts: Option for customers to create accounts to track orders, manage preferences,
and save payment information.

Benefits of B2C
The following are the benefits of the B2C model:
1. Vast & Varied Market
The B2C market is large and varied. It gives the companies the advantage of targeting a more
significant number of consumers.
Even small businesses operating at home can sell their products or services to customers on the
other side of the world. This enables the company to grow and increase business profit.
2. Reduced Cost
With the B2C model, companies can reduce additional costs related to infrastructure, staffing, and
electricity. They can also easily manage inventory and warehousing with fewer people and
resources.
 3. Direct Communication
Companies that adopt the B2C business model communicate with their buyers directly and in a
personalized way. This can be through emails, SMS, and push notifications. They can also get
feedback directly from the customer, which would help in product development or improving
services.

Limitations of B2C
There are also some limitations when it comes to B2B, and these are the following:
1. Highly Competitive Market
B2B presents a very competitive market. Many B2B companies are already operating in almost
every conceivable product category, so it can feel overwhelming when starting a new business.
The competition it brings involves price competition, too. A B2B company must be able to compete
against established businesses and find an effective way to attract customers despite this.
2. Finding and Retaining Customers
B2C companies need to design their whole operation to serve their customer niche effectively. They
need to prepare to pay a significant amount of money on marketing to find and attract customers.
Thus, it is critical that once the business has customers, it needs to come up with strategies to keep
them coming back, as the cost of selling to existing customers is much lower than the cost of
acquiring new ones.
3. Lower Margins
Products sold in a B2B business are cheaper. The business has to find alternative ways to gain back
the lost revenue by focusing on quantity over quality.
This increases the risk of not having repeat buyers because of quality issues which will also affect
business profit in the long run.

Examples of B2C Companies

The following are examples of B2C companies:
1. Amazon
Amazon specializes in e-commerce, digital streaming, cloud computing, and artificial intelligence.
When customers purchase Amazon products, they are performing a B2C transaction. Additionally,
customers pay for the online service of Amazon.
2. Netflix
Netflix is a popular online streaming platform that offers its service to mass-market consumers.
Consumers can access various movies, documentaries, and television services when they pay for
monthly subscriptions.
Netflix also produces original content. By offering self-produced content to viewers, Netflix is
performing a B2C transaction.
3. Spotify
Spotify offers a music streaming service to mass-market consumers with its monthly subscriptions.
Consumers can easily access millions of songs, podcasts, and the latest albums.
4. Walmart
Walmart is currently the largest revenue-grossing retailer with over 10,000 locations functioning as
a grocery store as its core business model.
Other examples of popular B2C companies are Starbucks, H&M, Facebook, YouTube, Alibaba, Airbnb,
Uber, and eBay
B2C-BUSINESS AND CRM
 CRM (Customer Relationship Management) aims at tracking and analysis of all interactions of the
firm with the customers to optimize sales volume, customer effectiveness, customer satisfaction and
customer loyalty.
 It integrates all customer-oriented processes and considers the customer as a strategic asset (A
regular customer is the most profitable customer).
 Process owner of the CRM processes is the supplier. In CRM there is no focus on single
transactions but on customer activities in general.

Typical CRM-Processes are:

• Process customer requests,
• Inform customer,
• Solve problems of customer,
• Conduct repair and service,
• Manage complaints:
o Pre-complaint consideration set (complaint cause, dissatisfaction),
o E-complaint decision (complainers versus non-complainers),
o Profiling e-complaint senders (personality, demographics, culture),
o E-complaint channels (channel choice, publicity),
o E-complaint message (attitude orientation, language intensity),
o E-complaint receivers (employees, observers),
o Internal e-complaint management systems (IT, human elements),
o E-complaint response message (speed, tone, content),
o E-complaint feedback utility evaluations (perceptions, outcomes),
• Run customer loyalty improvement programs

B2C SOFTWARE SYSTEMS

1.ONLINE SHOP
An online shop is characterized by one supplier and n customers. Process and software are
under the control of the supplier.
Subsystems or components of an online shop are:
• Shop system in a narrower sense:
o Sign-on function,
o Presentation of goods and services,
o Ordering function,
o Payment function,
o Delivery function,
o Search engine,
• Editing functionality (see CMS),
• Banner management (small advertisements),
• Recommendation engine,
• Call centre integration,
• Tax system,
• Development system,
• Data management (product catalogue, customers, transactions, documents, banner pool)
• Interfaces:
o Payment gateway,
o Data exchange with business partners (e.g. suppliers, forwarding agencies, payment
 o service providers),
o ERP-System (accounting, materials management),
o Data warehouse.

2.PROCUREMENT PLATFORM
A procurement platform is a computerized system designed to manage the procurement process.
Procurement platforms are often included in an enterprise resource planning (ERP) or accounting software
product.
A typical procurement platform includes purchase requisitions, purchase orders, goods receipts, and
invoice processing. In addition to these core requirements, most systems include an array of reporting tools.
Built-in approval processes, controls, and funds management tools are usually standard in the larger
products.
A procurement platform is characterized by n suppliers and one customer. Process and software are under
control of the customer.

Objectives of a procurement system are:

• Reduction of prices through centralization (quantity rebates),
• Minimization of procurement costs (mainly in the area of C-products/MRO =
Maintenance, Repair and Operations),
• Minimization of warehousing costs (just-in-time delivery).

Functions of a procurement platform are:

• Indent management,
• E-Tendering,
• E-Auctioning,
• Vendor management,
• Catalogue management,
• Purchase order integration,
• Order status,
• Ship notice,
• E-Invoicing,
• E-Payment,
• Contract management.

3.CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Customer relationship management (CRM) is an approach to manage a company’s interaction with current
and future customers (Menzel & Reiners 2014). The CRM approach tries to analyse data about customers’
history with a company, in order to improve business relationships with customers, specifically focusing on
retaining customers, in order to drive sales growth. One important aspect of the CRM approach is that a
CRM system compiles information from a range of different channels, including a company’s website,
telephone, E-Mail, live chat, marketing materials, social media, and more. Through the CRM approach
and the systems used to facilitate CRM, businesses learn more about their target audiences and how to best
cater to their needs.
A CRM system usually provides the following functionality:
• External interfaces:
o Web channel,
o Interaction channel,
o Partner channel management,
• Marketing:
 o Marketing resource management,
o Segmentation & list management,
o Campaign management,
o Real time offer management,
o Lead management,

• Sales:
o Sales planning & forecasting,
o Sales performance management,
o Territory management,
o Accounts & contacts,
o Opportunity management,
o Quotation & order management,
o Pricing & contracts,
o Incentive & commission management,
o Time & travel,
• Service:
o Service order management,
o Service contract management,
o Complaints & returns,
o In-house repair,
o Case management,
o Installed base management,
o Warranty management,
o Resource planning
• Internal interfaces:
o Trade promotion management,
o Business communication management.
B2B BASICS
Business-to-business (B2B) eCommerce is the online buying and selling of goods and services between
businesses.
The B2B category includes wholesalers, manufacturers, and many other kinds of businesses. It cuts across
multiple industries and different-sized companies.
B2B eCommerce can take place directly on a company’s own website or app, or on third-party B2B
marketplace platforms. And it can be either a primary or secondary online sales channel.
It can be quite different from business-to-consumer (B2C) eCommerce due to the scale, complexity, and
nature of transactions. Here are some basics to understand about B2B eCommerce:
1. Types of B2B eCommerce Models
 Wholesale Model: Businesses sell large quantities of goods to other businesses at discounted rates.
 Manufacturer-to-Distributor Model: Manufacturers sell products to distributors who then sell to
retailers or other businesses.
 Supplier-to-Manufacturer Model: Suppliers provide raw materials or components to
manufacturers who use them in production.
 B2B Marketplaces: Platforms like Alibaba or Amazon Business where multiple suppliers and
buyers transact.
2. Key Features of B2B eCommerce Platforms
 Bulk Ordering: Ability to handle large volume orders and often offer bulk pricing.
 Custom Pricing: Pricing structures that can be customized based on the customer’s order volume,
contract terms, or other factors.
 Account Management: Features to manage multiple user accounts, roles, and permissions within a
company.
 Integration: Seamless integration with ERP (Enterprise Resource Planning), CRM (Customer
Relationship Management), and inventory management systems.
 Quotation and Negotiation: Options for businesses to request quotes and negotiate terms rather
than using fixed prices.

DIFFERENCES BETWEEN B2B AND B2C

The primary aspects of B2C business are:
• The fundamental pattern is the one-time cooperation with a focus on the single transaction.
• Each transaction has to be executed as if business partners have never cooperated in the past and will
never come together again in the future.
• Both business partners have to find out whether they want to conduct this transaction (negotiation). Both
business partners have to see that they will benefit from this transaction (win-win situation).
• Prices have to be allocated for each transaction specifically
• The appropriate payment method has to be selected

The primary aspects of B2B business are:

• The fundamental pattern is the on-going cooperation. Business partners have agreed to cooperate for
some time. Business partners have concluded a (written) contract.
• Large data quantities are exchanged along the value creation chain; there is an information process
coming along with the business process.
• Different partners with specific objectives have to be coordinated.
• All members work together to reach common objectives.
• Negotiation is in most cases completely done in the initiation phase of the B2B cooperation; there is one
decision to cooperate for many transactions or a long
period of time.
• Price allocation is in most cases completely done in the initiation phase of the B2B cooperation; it is
normally not done in each single transaction.
• Payment is in most cases done beside the B2B cooperation via traditional payment channels; often
payments are not done for each single transaction but for a set of transactions, e.g. on a monthly basis.

B2B stands for a specific type of cooperation. In most cases cooperation is agreed between different
autonomous firms or other organizations. However, “B” may even be a single human being if the type of
relationship is “B2B”.

SUPPLY CHAIN MANAGEMENT

Supply Chain Management (SCM) is considered as the strong interlinking and coordination of all
activities, which are related to procurement, manufacturing and transportation of products. The supply
chain connects suppliers, manufacturing shops, distribution centres, shipping companies, merchants and
customers through processes like procurement, warehouse management, distribution and delivery, to
provide goods and services to the customer. It is characteristic for supply chains that they coordinate
several value chain stages.

SCM is considered a dynamic and ever-changing process that requires the coordination of all activities
among all partners of the supply chain in order to satisfy the final customer and maximize total supply
chain profitability. Process drivers are often manufacturers who want to improve and optimize the
cooperation with their pre-suppliers.

Due to the increasing relevance of supply chains a framework SCOR (Supply Chain Operations
Management) has been established by the Supply Chain Council (SCC), now part of APICS (American
Production and Inventory Control Society), as the cross-industry de facto standard strategy, performance
management, and process improvement diagnostic tool for supply chain management.
The SCOR framework covers several processes like
B2B SOFTWARE SYSTEMS
1.ENTERPRISE RESOURCE PLANNING (ERP)
ERP (Ganesh et al 2014) is a category of business-management software – typically a suite of integrated
applications – that an organization can use to collect, store, manage and interpret data from many business
activities, including:
• Product planning,
• Manufacturing or service delivery,
• Marketing and sales,
• Inventory management,
• Shipping and payment.

ERP provides an integrated view of core business processes, often in real-time, using common databases
maintained by a database management system. ERP systems track business resources – cash, raw materials,
production capacity – and the status of business commitments: orders, purchase orders, and payroll. The
applications that make up the system share data across various departments (manufacturing, purchasing,
sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business
functions, and manages connections to outside stakeholders.

ERP systems provide the following functionality:

• Financial accounting: general ledger, fixed asset, accounts payables (vouchering, matching, payment),
accounts receivables (cash application, collections), cash management, financial consolidation,
• Management accounting: budgeting, costing, cost management, activity based costing,
• Human resources: recruiting, training, rostering, payroll, benefits, diversity management, retirement,
separation,
• Manufacturing: engineering, bill of materials, work orders, scheduling, capacity, workflow
management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product
life cycle management,
• Order processing: order to cash, order entry, credit checking, pricing, available to promise, inventory,
shipping, sales analysis and reporting, sales commissioning,
• Supply chain management: supply chain planning, supplier scheduling, product configurator, order to
cash, purchasing, inventory, claim processing, warehousing (receiving, put-away, picking, packing),
• Project management: project planning, resource planning, project costing, work breakdown structure,
billing, time and expense, performance units, activity management,
• Customer relationship management: sales and marketing, commissions, service, customer contact, call
centre support,
• Data services: Various “self-service” interfaces for customers, suppliers and/or employees, product
lifecycle management (PLM),
• Systems engineering (SE): product and portfolio management (PPM), product design (CAx),
manufacturing process management (MPM), product data management (PDM).
2. SUPPLY CHAIN MANAGEMENT (SCM)
SCM is the management of the flow of goods and services. Supply chain management (SCM) is the broad
range of activities required to plan, control and execute a product's flow, from acquiring raw materials and
production through distribution to the final customer, in the most streamlined and cost-effective way
possible.

SCM encompasses the integrated planning and execution of processes required to optimize the flow of
materials, information and financial capital in the areas that broadly include demand planning, sourcing,
production, inventory management and storage, transportation -- or logistics -- and return for excess or
defective products. Both business strategy and specialized software are used in these endeavors to create a
competitive advantage.

Supply chain management is an expansive, complex undertaking that relies on each partner -- from
suppliers to manufacturers and beyond -- to run well. Because of this, effective supply chain management
also requires change management, collaboration and risk management to create alignment and
communication between all the entities.

In addition, supply chain sustainability -- which covers environmental, social and legal issues, in addition
to sustainable procurement -- and the closely related concept of corporate social responsibility -- which
evaluates a company's effect on the environment and social well-being -- are areas of major concern for
today's
companies.

SCM systems usually provide the following functionality:

•Demand & supply planning: demands planning & forecasting, safety stock planning, supply network
planning, distribution planning, service parts planning,
•Procurement: strategic sourcing, purchase order processing, invoicing,
•Manufacturing: production planning & detailed scheduling, manufacturing visibility & execution &
collaboration, MRP based detailed scheduling,
•Warehousing: inbound processing & receipt confirmation, outbound processing, cross Docking,
warehouse & storage, physical inventory,
•Order fulfilment: sales order processing, billing, service parts order fulfilment,
•Transportation: freight management, planning & dispatching, rating & billing & settlement, driver & asset
management, network collaboration,
• Real world awareness: supply chain event management, auto ID/RFID and sensor integration,
•Supply chain visibility: strategic supply chain design, supply chain analytics, supply chain risk
management, sales & operations planning,
•Supply network collaboration: supplier collaboration, customer collaboration, outsourced manufacturing