BUSINESS MARKETSWhat are BUSINESS MARKETS?

http://blog.speedysigns.co.nz/wp-content/uploads/2011/11/Business-Market.jpg

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 others.

CONSUMER MARKET BUSINESS MARKETAutomobile industry, watch manufacturers, fast moving consumer goods

Transportation, communication, public utilities, banking, finance etc.

VS

10 DIFFERENCES

http://nekrize.lv/wp-content/uploads/2013/03/small-business-competition1.jpg

FEWER, LARGER BUYERS:

Business markets have far fewer, but much larger buyers than consumer markets.

http://freelancefolder.com/wp-content/uploads/2404544591_ebb0f0aa2b_z.jpg

CLOSE SUPPLIER-CUSTOMER RELATIONSHIP:

Smaller Customer base, hence suppliers are expected to customize the offerings according to the buyers. A give and take relationship is preferred.

PROFESSIONAL PURCHASING:

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 trained buyers.

MULTIPLE SALES CALLS:

Large sale cycles (often measured in years) for large projects. Average industrial sale takes four sales calls to close.

DERIVED DEMAND: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 investment etc.

INELASTIC DEMAND:The total demand for many business goods and services is inelastic, ie. not much affected by price changes.

FLUCTUATING DEMAND: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 effect)

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.

DIRECT PURCHASING:

Business buyers often buy directly from the manufacturers rather than through intermediaries. eg: mainframes, aircrafts etc.

1. FEWER, LARGER BUYERS2. CLOSE SUPPLIER-CUSTOMER RELATIONSHIP3. PROFESSIONAL PURCHASING4. MULTIPLE BUYING INFLUENCES5. MULTIPLE SALES CALLS6. DERIVED DEMAND7. INELASTIC DEMAND8. FLUCTUATING DEMAND9. GEOGRAPHICALLY CONCENTRATED BUYERS

10. DIRECT PURCHASING

RECAP

DISCLAIMER:“These slides were created by Shine Ali, MEC Cochin, during a marketing internship by Prof. Sameer Mathur, IIM Lucknow (See www.IIMinternship.com)”