Business markets consist of organizations that acquire goods and services used to produce other products or services for sale or supply to others. Business markets have fewer but larger buyers than consumer markets. Relationships between suppliers and customers in business markets are typically close as suppliers must customize their offerings to each buyer's needs. Purchasing processes in business markets are professional with standardized policies and requirements that must be followed. Demand in business markets is often inelastic and fluctuating, depending on demand in related consumer markets.

1. BUSINESS MARKETS
What are BUSINESS MARKETS?

2. 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.

3. CONSUMER MARKET BUSINESS MARKET
Automobile industry,
watch manufacturers,
fast moving consumer
goods
Transportation,
communication,
public utilities,
banking, finance
etc.
VS
10DIFFERENCES
http://nekrize.lv/wp-content/uploads/2013/03/small-business-competition1.jpg

4. 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

5. 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.

6. PROFESSIONAL PURCHASING:
In the business market, the purchases are often made by trained
purchasing officials. Purchasing policies, constraints,
requirements etc are to be followed.

7. 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.

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

9. 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.

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

11. 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)

12. 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.

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

14. 1. FEWER, LARGER BUYERS
2. CLOSE SUPPLIER-CUSTOMER RELATIONSHIP
3. PROFESSIONAL PURCHASING
4. MULTIPLE BUYING INFLUENCES
5. MULTIPLE SALES CALLS
6. DERIVED DEMAND
7. INELASTIC DEMAND
8. FLUCTUATING DEMAND
9. GEOGRAPHICALLY CONCENTRATED BUYERS
10. DIRECT PURCHASING
RECAP

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