Define business markets and explain how the business markets differ from consumer markets. Give relevant examples to support your answer.
A business market is one consisting of individuals and organisations purchasing products and services for use in production of further goods and service for sale, lease or rental at a profit. In general a market is:
"The set of all actual and potential buyers of a product or service. Buyers often share a particular demand or need which can be satisfied through exchanges or relationships." - Kotler.
Consumer markets, on the other hand, consist of individuals and households that purchase services and goods for their own personal use or satisfaction, Consumers vary in age, gender, income, education and taste. For example: I may prefer to buy local milk for myself and my family, but my neighbour may buy Italian milk just for herself.
One way of differentiating between these two markets is to ask whether or not the purchase represents the final purchase? Will the product be consumed? Is the product being purchased for personal satisfaction?
Business markets tend to have a relatively small number of purchasers.
There may be hundreds or thousands of manufacturers, which is a small amount in relation to the number of consumers. The relatively small number of purchasers to be reached, may therefore enable direct personal sales visits by sales representatives and be a major way of promoting sales.
Consumer markets tend to have a relatively large number of purchasers. Millions of consumers may be interested in a particular product or service and consequently marketers will rely heavily on the media (e.g.: television, newspapers, radio) to promote services or products to a large number of people at once.
High value purchases are widely evident in business markets. For example, Pizza Hut will order enough cheese...