Comparative Analysis of Business Models

Executive Summary

Business models are divided into two parts that are B2B and B2C. Both of them are having different impacts on different categories of people. B2B focuses on business while B2C is focused on consumers. The tendency to buy a product precisely an insurance product has different influencing factors such as personality, perception, and cultural activities. The study chooses an organization that designs products suitable for both B2B and B2C categories. There is also a discussion presented on how the customer’s decision-making is influenced and what steps are involved in the process.

Introduction

This study focuses on a specific organization named as the LoPriore Insurance Agency which is operating on a combined business model. It has its headquarters located at Stoneham, Massachusetts in the United States. This company is having a business type of sole proprietorship. The company is currently operating in both business-to-business (B2B) and Business-to-customer (B2C) contexts. Such companies are termed as business-to-many or B2M. LoPriore Insurance agency is rated 5 stars by most consumers (lopriore.com, 2021). They are designing policies that can be helpful for customers or businesses depending on their needs. The study will give an overview of the organization along with a mapping of path-to-purchase for the product. It will also provide information regarding consumer behavior. There are influences given on the decision-making process which is coming from the business model in concern. Personality, motivation, learning and perception, and subcultures are also being influenced by business marketers. Hence, the study is going to highlight all these segments and create an understanding of the process that improvises business.

Background of the organization

This organization was established by John LoPriore in the year 1995. This organization comes with the thought of putting their customer’s first place. It is one independent insurance agency that brainstorms and finds out policies that are going to fit perfectly to the customer needs and their demands. The organization also focuses on its marketing strategy along with creating updates on actions that need to be taken on an immediate basis (Lo et al. 2020). The customers are valued and the organization has taken a pledge to serve the customers by calling, texts, emailing, visiting physically, or even through using the internet as a convenient application. The organization is showing availability to consumers 24/7 and the claims are answered promptly. User experience is managed by staying on the ethical ground and treating customers with respect, kindness, and courtesy. The linking of professional relationships with personal is not done and the competitive pricing strategy is as followed. They have a motto of "We don't sell insurance. We help people buy the insurance that fits their lifestyle (lopriore.com, 2021)”. This organization is also working in collaboration with Arbella, Mapfre, safety insurance, Quincy group.

Section 1: Mapping the path to purchase of the product

1. Rationale for the different stages of the consumer decision-making process and its influencing factors

The chosen product for review in this stage is identified as the personal insurance product designed by the company that is going to help each starting from students, families, and seniors. This particular product specializes in car insurance components. It dedicates the time which is necessary to explain the customized insurance program. The expert team within this company puts all their effort into ensuring that customized insurance programs are delivered. This company has had its presence in the insurance market for over 25 years and designs the best-fit lifestyle components (Mayayise,. and Osunmakinde, 2019). The consumer decision-making process is divided into 5 distinct steps which are:

Problem recognition: This is done at the user's end to understand whether he needs the product at the moment or it is just the passion requirement modeling (Gouyon et al. 2004). Here the current need for securing the car owned by the user contributes to problem recognition.

Evaluation of alternatives: This weighs upon choices against comparable alternatives that are offered by other insurance companies. It focuses on other choices of products that a consumer can focus on.

Purchase decision: Consumer is made to purchase the car insurance product in concern by comparing other products available in the market at the same price point (Radenković et al. 2018).

Information search: This process focuses on the information gathering for consumers whether the purchase of personal car insurance is offered at a compatible price point or not.

Post-purchase evaluation: It reflects on the purchase the consumer has made and in this case, it is a personal insurance product. A customer needs to evaluate whether he is capable of paying the premium on time or whether it fits within the customer's budget.

2. Explanation of black-box model in consumer behavior and its influence on marketing

According to Kotler and Armstrong, the basic black-box model of the consumer decision-making process comprises three major components that work as market stimuli and the black box model relates to the consumer and buyer responses highly. The buying behavior of consumers is found to be influenced by several factors. The black box is identified typically as the consumer's head and a stimulus is passed through the black box where a significant decision is formed.

As shown in the image above, marketing stimuli such as product, price, place, and promotion along with environmental factors like socio-cultural, technical, political are associated with environmental components. In this case, classic car insurance products are leaving an impact on the stimuli and environment of customers' behaviors (Sorescu, 2017). Based on factors that influence buying options and focus on purchase behavior of what when, where and how much resources are used. A focus on brand and company relationship behavior supports the black-box model. To be specific, the car insurance product will focus on

3. Mapping consumer decision-making process for products in the B2C context

In the B2C process, the consumer finds out the best possible stage, where the product needs are marked and enterprise organizations make the right decisions that encourage information improvement. Consumer decision-making levels focus on business to consumer activity management with pushing toward each stage of the behavior influences. The consumer's consideration sets the right plan to prepare for its advancement of records (greece.envolveglobal.org, 2021). The customer's idea of envisioning the buying decisions helps in planning their profit margins.

Section 2: Researching data in consumer behavior

4. Similarities and differences of the decision-making process in B2C and B2B concept

As a business owner, ensuring the business and protecting the assets has been identified as one of the most crucial decisions that can be made. Hence, choosing the right insurance product becomes an important aspect of life (Sun et al. 2017). Similarities identified between the B2C and B2B models are:

Comprehensive knowledge and extensive experience in customer service are similar components of these two. In both models, the sales process revolves around customers. Both business sectors and individuals are going to purchase insurance only if consumers' needs are addressed at a good price range.

Differences of both models:

Clients are typically dealt with at a high level of executives in B2B sales while in B2C sales the consumer is dealt with directly. The audience communication is differing mostly in both models. B2C marketing mostly focuses on quick solutions and enjoyable content. B2B marketing is seen to be focusing on building relationships and providing business returns. Common B2C example is the insurance sector and eCommerce (Baev, and Bondarev, 2007). On the other hand, an example of B2B is identified to be automobile manufacturing which is focusing on turning around the sales to customers. Now in both cases, the car insurance product should be sold to the customer depending on their current needs.

5. Different market research methods applied in either B2C or B2B with examples

Evaluation of market research methods that are applied in B2C context to a chosen organization Lopriore can be as follows:

Widest range of products: This largest B2C seller offers the widest range of products with management of revenue to hundreds of millions of people. 58% of products shown in Lopriore are coming from third-party sellers (Ciulli, and Kolk, 2019).

Customer-friendly interface: A consumer-friendly interface is designed that encourages consumers from different age groups to personalize recommendations and browse n number of products. Depending upon the consumer's search history several business products are explored. Easy scaling from small to large scale: The e-commerce and cloud computing companies have experienced an up scaling from small to large expansions by analyzing business segments.

Affiliation of products and resources: Updated, tech giants and contributing to the resources which are on the top line of the business is identified by Lopriore. The impact is classified upon the management of global annual marketing experiences and gaining a large amount of profit to manage the promotional costs. Billion are invested in promotion while the net worth is identified to be at US$10 billion (lopriore.com, 2021).

Lopriore segmentation targeting and positioning: Practices are associated with targeting the widest customer segment (Ciulli, and Kolk, 2019). The insurance giant applies multi-segment, adaptive, and encouraging effective positioning techniques. Moreover, the company is capable of offering products at competitive price ranges due to massive cost savings done on business operations.

Unique selling proposition: It provides fast delivery, exceptional customer services along marketing communication messages are given for management of sales components. Lopriore's marketing strategy illustrates the focus on print and online media which will improve the sales channels and integrate customer engagement.

6. Justification of market research influencing customer decision making in both B2C and B2B contexts

Market research in B2B and B2C contexts helps in the development of robustness and telling why people need to purchase their products. It focuses on the cost per acquisition of clients and gives an understanding of what types of products and services being offered are influencing the marketing. In market research of B2B context, there is more of the personal selling components observed. The consumer buying patterns are seen to be affecting buying behavior. Derived demand, joint demand, and fluctuating demands can be influenced in such marketing. There is immense differentiation observed than the consumer marketing Quizlet (Bocken, Schuit, and Kraaijenhagen, 2018). The customers must evaluate the efficacy of the product purchased. A utility distribution and discussion related to the decision-making process. A consumer has enough rights to communicate whether the product in this case the car insurance is required currently at the moment or it is not that necessary. Figuring out metrics on cost per acquisition of clients and gaining a clear understanding of what marketers want in products or services.

In this case, influence is created on consumers' behavior to a particular product and welcoming that at a good price point. The exploratory factor analysis approach serves different customers based on their current needs and directly manages the consumer goals. Companies should have clear ideas on how they are going to show progressive ideas of marketing and applying direct sales. Businesses are identified to be leaving an impact on consumers and facilitating strategic planning. Market research also influences and helps in the identification of emerging trends (Bocken, Schuit, and Kraaijenhagen, 2018).

Section 3: Influence on the decision-making process

7. Evaluation of factors influencing the decision-making process

Two factors that leave an impact on the decision-making process are personality and motivation. In this case, while buying car insurance, the personality component heavily impacts customers' decisions.

Personality: The insurance company in concern would focus on the combination of B2B and B2C components that are known as B2M. In the case of decision-making effectively, the people's personality and living standards are impacted. The choice of the right set of products is done through observation. Past experiences, a variety of cognitive biases, and individual differences leave an impact on the decision-making process (Baev, and Bondarev, 2007). The decisions which are undertaken, impact the budget and lifestyle of the common man. There are simply different ranges of cognitive operations that talk about risk and uncertainty and this needs to be followed for better management of decisions. Personal habits are influencing the social and cultural aspects of people. A person should understand how important the product is right at the moment to be purchased. The decision-making process is associated with the customer's behavioral aspect and willpower of purchasing a certain product.

Motivation: In this case, the car insurance is purchased by the consumer due to influence from other car owners in society. In most cases, the car owners are motivated to purchase items like insurance by others so that a standard of living is matched and additional security is provided to the car.

Conclusion

This study has given a complete idea of the operations of B2M. The chosen insurance company focuses on both business people and individual consumers to make sure that they are gaining the right set of products that match their needs. No budget overflow should be seen within people's financial components as it will ruin the company's mission statement then. Serving customers with priority leaves an impact on individual decision-making. The perception is affected as different cultures have different traits to be matched with each other. Now the need of purchasing a product affects essentially people's buying power and contributes to B2M models. Hence, focusing on the marketing components becomes essential for the consumers and business together. The process models of B2M allows to manage benefits for both buyer and seller.

References

Journals

Baev, A. and Bondarev, B., 2007. On the ruin probability of an insurance company dealing in a 𝐵𝑆-market. Theory of Probability and Mathematical Statistics, 74, pp.11-23.

Bocken, N.M., Schuit, C.S. and Kraaijenhagen, C., 2018. Experimenting with a circular business model: Lessons from eight cases. Environmental innovation and societal transitions, 28, pp.79-95.

Ciulli, F. and Kolk, A., 2019. Incumbents and business model innovation for the sharing economy: Implications for sustainability. Journal of cleaner production, 214, pp.995-1010.

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Kim, N. and Kim, W., 2018. Do your social media lead you to make social deal purchases? Consumer-generated social referrals for sales via social commerce. International Journal of Information Management, 39, pp.38-48.

Lo, L.W., Chan, H., Tang, F. and Yeung, K.Y., 2020. Consumer ethics: insights from business professionals. Asia Pacific Journal of Marketing and Logistics.

Mayayise, T.O. and Osunmakinde, I.O., 2019. Connective intelligence to stay safe while shopping online for e-products and e-services on business-2-business and business-2-consumer websites. International Journal of Business Information Systems, 30(3), pp.348-372.

Radenković, M., Bogdanović, Z., Despotović-Zrakić, M., Labus, A. and Lazarević, S., 2020. Assessing consumer readiness for participation in IoT-based demand response business models. Technological Forecasting and Social Change, 150, p.119715.

Sorescu, A., 2017. Data‐driven business model innovation. Journal of Product Innovation Management, 34(5), pp.691-696.

Sun, C., Ji, Y., Kolfal, B. and Patterson, R., 2017. Business-to-consumer platform strategy: How vendor certification changes platform and seller incentives. ACM Transactions on Management Information Systems (TMIS), 8(2-3), pp.1-42.

Websites

• greece.envolveglobal.org, 2021. Available at: https://greece.envolveglobal.org/business-to-consumer-b2c/ [Accessed on 15/12/2021] lopriore.com, 2021. Available at: https://www.lopriore.com/ [Accessed on 15/12/2021]