Marketing Management

Professor Ashis Mishra

Types of Market

The first type of market that we will discuss here is called the consumer market. It is also called B2C
market that is business to consumer market. As the name suggests, it is the end consumers of various
merchandise like products that are purchased by the consumer for their own or household usage that
constitutes the consumer market.

Every week you or your family might be buying vegetables from the market. In addition to vegetables,
you might be buying household items, or groceries, baby care items, blankets, towels, dresses,
furniture, soap, detergent. All these things are part of consumer market. What’s common across all
these items? These are the products that is used within the households and that is used by the final
consumer.

So the market involved here is called consumer market. Please keep it in mind that the products
brought and sold in the market doesn't decide the type of market here. It is the buyers and sellers that
decide the type of market. Majority of the things that we will be discussing at part of this course will
be talking about consumer market.

However, that's not the only market here. The other type of market is called business market. Let’s
say you want to buy coconut oil. Now when a coconut oil is bought for your own consumption that
becomes consumer market. If the same coconut oil is purchased by HUL to make glycerine soap then
that becomes part of a business market. Please remember the products are the same here.

A business market is defined as a market where output of one form goes either as raw material, or as
processed goods, or as consumable goods into another industry. This is called B2B market that is
business to business. Thus in business market, buyers buy goods to resell at some point of time for
profit to some other business buyer.

So the major difference between the consumer and business market is the end user. For a consumer
market, the product is used by the end consumer whereas a business market, the product is used by
a business entity for making something else, which eventually will be sold to the end consumer.

In this market, the buyers are professionals who buy on the basis of rational evaluation of the offer,
unlike in consumer market, where people make buying decisions on the basis of experience, emotions,
sentiments, or even impulse. Also, in this business market, the purchasing is done generally in bulk,
unlike in consumer market where people purchase in small quantities because it is for their own
household consumptions.

The third type of market is called institutional market and this is called institutional market because
the purchase is done by institutions, organizations. The purchase is bulk just like business market.
However, it is not for profit making. It is not for reselling to any third party. For example, the provisions
or stationeries purchased by hotels, hospitals, schools, universities and even institutions like IIMB.

Let’s say IIMB buys chairs, tables, benches, laptops, desks for its students, faculties, staff. These are
all part of institutional purchasing. It is bulk purchasing, but not for reselling it to somebody else for
profit making. So this market is called institutional market.

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