The business market consists of all the companies that purchase goods and services to reproduce them or generate other products or services that are sold, rented, or distributed to others. On the other hand, consumer markets are directed towards individuals and households. In light of this, business markets require separate study due to their distinct features which span through various industries including agriculture, forestry, and fisheries, construction, mining, transportation, communication and public utilities, manufacturing, banking, and finance. More money and items are involved in business buyers as compared to consumer buyers (Bennett & Blythe 2002). Thus, the following paragraphs analyze the characteristics of business marketing that contrast with consumer marketing; in which the basis of the separate study is required in business markets.
Fewer Buyers: business markets have more buyers than consumer markets. This calls for proper analysis and planning on the markets to enter by the top management of the organization.
Larger buyers: volume of purchase is higher in organizational buying. This implies that companies will often perform thorough problem recognition before making buying decisions.
Derived demand: the demand for institutional products is usually derived from buyers’ demands for goods. Thus, there is a need to monitor the buying pattern of larger consumers.
Fluctuating demands: the demands for items used in businesses are more volatile than the demands of items used by consumers. A small addition in consumer demand can result in a larger percentage in the demand of technologies needed to produce the additional output.
Professional purchasing: business buying is characterized by professional purchasing since organizational goods are purchased by trained agents, who must follow the organization’s purchasing policies, constraints, and requirements.
Buying influences: there are several buying influences in business markets as more individuals are typically involved in the buying decision process. Buying committees may involve technical experts or even a board of senior managers.
Therefore, a separate study on business markets is required because of the greater impact on the market in which institutional buyers operate. As compared to consumer markets, business markets are characterized by fewer and larger buyers, derived demand, fluctuating demand, professional purchasing, and several busying influences. This calls for an organized buying decision process.
Bennett, R, & Blythe, J, 2002, International Marketing. Kogan Page Publishers, London.
Kotler, P, 2003, Marketing Management, Eleventh Edition, Prentice Hall, New York.