Question

There are three different business (organizational) markets. List and describe the main characteristics of each.

Answer 1

Organization markets refers to markets which individuals or markets buy goods for other purposes rather than for personal consumption. The characteristics of these markets comprises of large volume purchases and fewer buyers who purchase these products. Organization markets thus often comprises of few buyers who buy large quantities of products for other purpose but not for personal consumption.

The main focus of organizational marketing is on corporate goals, technical suitability, return on investment instead of focusing on perceived value, and styles that are found in consumer market. There are three different types of organizational markets. These includes:

1. Producers - these are the ones buying material and machinery.
2. Resellers - they are the wholesalers and retailers and even niche suppliers.
3. Institutions - these are the non-profit organization and the government.

Explanation:

The three different organizational markets comproses of:

1.Producers

The producers purchase machinery and raw materials from other producers or sometimes they can purchase it from the resellers.

Doing marketing to producers demands technical expertise in addition to possessing knowledge on the operations of the producers.

Marketing strategies targeting the producers involves first identifying the problem that the producers industry faces and proposing possible cost-effective solution to the problem.

2.Resellers

These comprises of the retailers and the wholesalers companies including even suppliers specializing in particular areas of expertise.

The main reason for marketing to resellers is to know their added value proposition.

If the resellers sell huge volume of products at low prices, marketers will need to develop proposals which addresses these features.

3.Institutions

These comprises of the non-profits or the government.

To do marketing to these organizations requires high specialization as marketers have to rely on long-term relationships and opportunities that arise.

Purchasing by the government is often bureaucratic due to long procedures though the benefits accrued are high.