Difference between business markets and consumer markets

May 4, 2018 By Hitesh Bhasin

https://www.marketing91.com/difference-between-business-markets-and-consumer-markets/

One of the most common mistakes people make, when it comes to commercial transactions is thinking
that business markets (B2B) are the same as consumer markets (B2C). This is quite an unfortunate
mistake as the two, though similar in concept, are very different. One fact you should always remember
about business markets is that it is a business to a business transaction where one company buys
products from another business for resell or to facilitate the production of other goods.

Here are some differences that will help you distinguish between these two markets;

The most important thing that you ought to remember about business markets as mentioned earlier is
that it is a business to business type of transaction. It involves companies transacting with each other
not for their consumption but in some cases to facilitate production, in other cases to supply the
products to other firms or directly to resell the purchases to the consumers.

The procurement of the two markets also presents a significant distinction. For B2B markets, the
purchasing process is quite complicated as the process is mostly influenced by a business’ executive and
management depending on the type of purchase. Persons making purchasing often require
authorization from these groups before making any purchasing decisions.

B2C markets, on the other hand, presents a very simplified procurement process because influences are
not as complex as it is with B2Bs. The most common factors that affect consumers purchasing decisions
include; reference groups, tastes and preferences, marketing campaigns and economic conditions.

The payment structure for these two markets differs significantly. Large sums of money are involved in
B2B markets as compared to B2C markets. This is because the former often involves large volumes of
purchases unlike in B2C where purchases are only made as per the consumer’s needs.

In this regard, B2B markets employ a more complex payment structure where a business makes an
order and arranges for delivery through logistic procedures. After delivery, the seller then sends an
invoice to the buyer business within which the buyer company can then make an official payment for
goods delivered (based on the agreed terms of payment). In the consumer market, customers choose
their product of interest and then pay for the product using cash, credit or checks.

Also, unlike in the consumer market where consumers buy products at the same price, in the business
market buyers can negotiate for special terms depending on their volume of purchase, business
relationship enjoyed with the selling business, etc.

Another distinction between these two market lies in how each market promotes their products and
services. In the business market, products are sold to other companies, and thus the method of
advertisement will slightly vary from that of the consumer market. Here, companies do not involve
media advertisement to market their products and services. Instead, they use more formal channels like
magazines, newspapers, and direct emails to concerned businesses.

Consumer markets as we now know targets the customers as the end user. Here, media advertisements
are usually a large part of the promotions strategy that businesses use to market their products.

Throughout the years, B2B markets have dependably been behind the operation of B2C markets. Be that
as it may, as the years wore on and improvements on technological have been seen, it has been
harvesting popularity in light of the increased development.

Companies in the B2B market today aimed at boosting their shareholder value in these markets. So,
while their promotion techniques are not as aggressive as with B2C markets, branding of products and
services in this particular market is always top-notch. Moreover, businesses operating in a B2B market
often work purposely Towards building up the business and giving it a strong position in the industry.

Difference between business markets and consumer markets due To The Nature Of Purchases

Organizational consumers purchase capital equipment, raw materials, semifinished goods, and other
products for use in further production or operations or for resale to others, whereas final consumers
usually acquire the finished items for personal, family, or household use.

Organizational consumers are likely to require exact product specifications. Final consumers more often
buy on the basis of description, style, and color.
Organizational consumers often use multiple-buying responsibility, in which two or more employees
formally participate in complex or expensive purchase decisions. Final consumers employ it less
frequently and less formally.

Home » MARKETING BASICS » Difference between business markets and consumer markets

Difference between business markets and consumer markets

May 4, 2018 By Hitesh Bhasin Tagged With: MARKETING BASICS

One of the most common mistakes people make, when it comes to commercial transactions is thinking
that business markets (B2B) are the same as consumer markets (B2C). This is quite an unfortunate
mistake as the two, though similar in concept, are very different. One fact you should always remember
about business markets is that it is a business to a business transaction where one company buys
products from another business for resell or to facilitate the production of other goods.

Here are some differences that will help you distinguish between these two markets;

The most important thing that you ought to remember about business markets as mentioned earlier is
that it is a business to business type of transaction. It involves companies transacting with each other
not for their consumption but in some cases to facilitate production, in other cases to supply the
products to other firms or directly to resell the purchases to the consumers.

Page Contents [show]

The procurement of the two markets also presents a significant distinction. For B2B markets, the
purchasing process is quite complicated as the process is mostly influenced by a business’ executive and
management depending on the type of purchase. Persons making purchasing often require
authorization from these groups before making any purchasing decisions.
B2C markets, on the other hand, presents a very simplified procurement process because influences are
not as complex as it is with B2Bs. The most common factors that affect consumers purchasing decisions
include; reference groups, tastes and preferences, marketing campaigns and economic conditions.

The payment structure for these two markets differs significantly. Large sums of money are involved in
B2B markets as compared to B2C markets. This is because the former often involves large volumes of
purchases unlike in B2C where purchases are only made as per the consumer’s needs.

In this regard, B2B markets employ a more complex payment structure where a business makes an
order and arranges for delivery through logistic procedures. After delivery, the seller then sends an
invoice to the buyer business within which the buyer company can then make an official payment for
goods delivered (based on the agreed terms of payment). In the consumer market, customers choose
their product of interest and then pay for the product using cash, credit or checks.

Also, unlike in the consumer market where consumers buy products at the same price, in the business
market buyers can negotiate for special terms depending on their volume of purchase, business
relationship enjoyed with the selling business, etc.

Another distinction between these two market lies in how each market promotes their products and
services. In the business market, products are sold to other companies, and thus the method of
advertisement will slightly vary from that of the consumer market. Here, companies do not involve
media advertisement to market their products and services. Instead, they use more formal channels like
magazines, newspapers, and direct emails to concerned businesses.

Consumer markets as we now know targets the customers as the end user. Here, media advertisements
are usually a large part of the promotions strategy that businesses use to market their products.

Throughout the years, B2B markets have dependably been behind the operation of B2C markets. Be that
as it may, as the years wore on and improvements on technological have been seen, it has been
harvesting popularity in light of the increased development.
Companies in the B2B market today aimed at boosting their shareholder value in these markets. So,
while their promotion techniques are not as aggressive as with B2C markets, branding of products and
services in this particular market is always top-notch. Moreover, businesses operating in a B2B market
often work purposely Towards building up the business and giving it a strong position in the industry.

Difference between business markets and consumer markets due To The Nature Of Purchases

Organizational consumers purchase capital equipment, raw materials, semifinished goods, and other
products for use in further production or operations or for resale to others, whereas final consumers
usually acquire the finished items for personal, family, or household use.

Organizational consumers are likely to require exact product specifications. Final consumers more often
buy on the basis of description, style, and color.

Organizational consumers often use multiple-buying responsibility, in which two or more employees
formally participate in complex or expensive purchase decisions. Final consumers employ it less
frequently and less formally.

business markets and consumer markets

Difference between business markets and consumer markets on the basis of demand

Derived demand occurs for organizational consumers because the quantity of items they purchase is
often based on the anticipated demand of their final consumers for specific finished goods and services;
therefore, organizational consumers are less sensitive to price changes. As long as final consumers are
willing to pay higher prices, organizational consumers will not object to price increases.

Demand is volatile due to the accelerator principle, whereby final consumer demand affects many levels
of organizational consumers.

There are fewer organizational consumers than final consumers.

Business market consumers tend to be geographically concentrated.

Buying specialists are often used.

Distribution channels are shorter.

Differences of business markets and consumer markets based On A Global Perspective

As with final consumers, there are many distinctions among organizational consumers around the world
and sellers must understand and respond to them.

Companies doing business in foreign markets must know how to deal with organizational consumers in
those markets.

Nations’ cultures have a large impact on the way their organizational consumers negotiate and reach
decisions.