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What is the business market, and how does it differ from the consumer market
What are BUSINESS MARKETS?
BUSINESS MARKET consists of all the organisations that
acquire goods and services used in the production of other
products or services that are sold, rented, or supplied to
CONSUMER MARKET BUSINESS MARKET
fast moving consumer
FEWER, LARGER BUYERS:
Business markets have far fewer, but much larger
buyers than consumer markets.
CLOSE SUPPLIER-CUSTOMER RELATIONSHIP:
Smaller Customer base, hence suppliers are expected to customize
the offerings according to the buyers. A give and take relationship
In the business market, the purchases are often made by trained
purchasing officials. Purchasing policies, constraints,
requirements etc are to be followed.
MULTIPLE BUYING INFLUENCES:
More people influence business buying decisions.
Business marketers need to send well trained sales
representatives and sales teams to deal with well
MULTIPLE SALES CALLS:
Large sale cycles (often measured in years) for large projects.
Average industrial sale takes four sales calls to close.
Demand for Business goods ulimately depends on the consumer
goods demand. Business marketer needs to closely monitor the
associated consumer market to determine the most appropriate
The total demand for many business goods and services is inelastic,
ie. not much affected by price changes.
The demand is extremely fluctuating. eg: A 10 percent rise in
demand of the consumer goods could lead to a 200 percent rise
in the demand for business goods, whereas a fall could lead to
overall collapse of the business market. (the acceleration
GEOGRAPHICALLY CONCENTRATED BUYERS:
Business marketers need to closely monitor regional shifts of
certain industries. Selling costs are reduced with the
geographical concentration of the producers.
Business buyers often buy directly from the manufacturers rather
than through intermediaries. eg: mainframes, aircrafts etc.