Market Hint

Q-6 Explain how the market structure and demand differ for business markets compared
withconsumer markets.
Like many well-known business organizations, they sell their product to other businessorganization.
Even in consumer products companies also sell most of their product in other businesses. This way
refers to business buyer behavior of any organization. This organization buys goods & services for
further process, sold, rented or supplied to others. This also includesin retailing & wholesaling business
behavior.
In the business buying process, buyers decide which types of product they need when they try tofind out
that product, evaluate, and choose the best alternatives. B-2-B marketers mustunderstand the business
markets & business buyer’s behavior very efficiently. Then they sell thefinal output to the final
customer. They always try to build profitable customer relations withtheir customers by delivering
superior customer value.
Business markets
The business market is higher than the consumer market because business market involvesmillion
dollars & items than in consumer markets. For example: Think about the Unilever. It hasall types of
consumer’s goods item & every year Unilever earn million dollars. But think aboutGoodyear. A large
number of the business transaction occurs only for Goodyear tires, steel,rubber. Goodyear has a high
demand in the business markets. Thus many business buyers buyonly for resale the products.
In another way, business markets are the same as consumer markets. Because both are involvedin
buying & selling decisions to satisfy the needs. The main differences between business market&
consumer’s markets are;
1. Market structure & demand
2. Nature of the buying unit
3. Types of decisions & the decision process Market structure & demand
Business marketers generally work more than consumer marketers. The business marketer dealswith a
large number of buyers but they stay far fewer. Besides, the demand for the business market is different
from the consumer markets. The business market always faces a derived demand. Derived demand
means that demand usually comes from the demand for consumergoods.
Another business market may face inelastic demand & more fluctuating demand. These types ofdemand
effect on price changes only for the short run. A reduction in price may not increase the purchase of that
product unless the demand for this product existing in the markets.
Nature of the buying unit
Here, every time compared with the consumer market, the business market involves in two wayslike –
 More decision participants
 More professional purchasing effort
There are some trained agents who purchase a product that can perform better. If there are toomany
agents, the buying decision may be more complex. That’s why the buying committeesselect expert
people for their work.
Types of decisions & the decision process
Than consumer buyers, business buyers face more complexity in buying decision. A business buyer
usually buys a large number of inventories, invest large sums of money, adopt technical &economic
considerations, and interact with many people in the different channel of theorganization. This process
is so longer & more formalities need to do. Even, a large businessorganization maintains a formal
written approval with other partners.Finally, buyer & seller depends on each other in the business
markets.
The four major sets of variables that might be used in segmenting consumer markets are:
1. Demographic Variables: These are the most commonly used segmentation variables and include
characteristics such as age, gender, income, education, occupation, family size, and ethnicity. Companies
use demographic variables to identify groups with similar needs and preferences.
2. Geographic Variables: Geographic segmentation is based on where consumers live, work, or play. The
variables used in geographic segmentation include country, region, city or town size, climate, and
population density. Companies use geographic variables to identify consumers in specific locations and
to tailor their marketing strategies to meet the needs of those consumers.
3. Psychographic Variables: Psychographic segmentation is based on consumers' lifestyle, personality,

values, attitudes, and interests. Companies use psychographic variables to identify consumers with
similar lifestyles, preferences, and values and to create marketing campaigns that appeal to those
consumers.
4. Behavioral Variables: Behavioral segmentation is based on how consumers behave towards a product
or service. The variables used in behavioral segmentation include usage rate, loyalty, benefits sought,
occasion, and readiness to buy. Companies use behavioral variables to identify consumers who are most
likely to respond to their marketing efforts and to develop marketing campaigns that meet those
consumers' needs.
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Q-6 Explain how the market structure and demand differ for business markets compared

1. Market structure & demand

2. Nature of the buying unit

Nature of the buying unit

 More professional purchasing effort

Types of decisions & the decision process

3. Psychographic Variables: Psychographic segmentation is based on consumers' lifestyle, personality,

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