Commercial markets are defined as all organizations that procure products or services that are subsequently used to manufacture other goods and facilitate the service for other consumers. Wholesalers and retailers are also considered business markets since they are also involved in the acquisition and sale of goods and services for later sale and rental.
Business markets and consumer markets tend to be similar to some degree. For example, in both cases, people are involved in the process of assessing the need for goods and products and, at the same time, they perform different roles to ensure that they achieve the satisfaction of these needs. However, it should be noted that certain factors define the characteristics of the business markets, which also distinguishes it from the consumer market and they include the following:
Market structure and demand
Typically, there are few, but relatively large types of business buyers that organizations often engage in and are tied to the business market. It should also be noted that these customers are highly concentrated geographically. There are various instances where business markets have faced inelastic demand that is not necessarily influenced by changes in the price of the product or service, especially in the short term.
It should also be noted that the demand for business markets and business products also tends to fluctuate, which only implies that the demand for the products of the business markets can change relatively quickly than the demand for the consumer goods or services.
Nature of the purchase unit
This is the other characteristic that distinguishes the difference between consumer markets and business markets. Trade buying participants tend to buy more and there are more participants and the process also tends to be relatively professional. On the other hand, the participants in the purchase of consumer goods are often less numerous and the efforts made for this purpose are also weak. People involved in consumer buying lack knowledge and experience when compared to those involved in business buying.
The business market also incorporates a committee of experts who participate in ensuring that all purchasing decisions are made collectively. Organizations involved in the business marketplace also make sure to train their staff occasionally on matters relating to business procurement, which helps them ensure that the process is effective and efficient.
Decision and decision-making process
Ordinarily, decisions that revolve around the business market are more complex than decisions made by consumer markets. This is mainly because the business market requires an intensive process that involves technical and economic considerations, a considerable amount of money, and interactions between different professionals holding different ranks in their respective professions.
The business purchase process also tends to take longer than the consumer purchase process since fine details must be considered to ensure that every part is accounted for. This explains why the business market tends to appear more formalized than consumer buying.
For example, the organizations dealing with the business market get to exercise the detailed product specification, enter the purchase order, carefully identify the suppliers and also formalize the supplier approval and payment.
However, it should also be noted with significant concern that sellers and buyers depend on each other for their success in the business buying process. Customers in the consumer market are often present at a distance compared to organizations in the business market, which often tend to be carefully present with each other and ensure that customers provide all necessary assistance at every stage. purchase process data.