Understanding the Terrain: Markets and Purchasing Behaviour
Markets and Purchasing Behaviour
As introduced in Chapter 1, in the context of marketing, markets are sets of actual or potential customers who might transact with a seller. Markets consist of all potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.
Markets can be categorized into two main types: organizational markets and consumer markets.
Organizational Markets
Organizational markets consist of businesses, governments, and institutions that purchase goods and services for use in their operations or to resell to others.
We typically refer to organizational markets as business-to-business (B2B), where both the seller and the buyer are organizations.
Consumer Markets
Consumer markets, on the other hand, consist of individuals and households that purchase goods and services for personal use.
We typically refer to consumer markets as business-to-consumer (B2C), where the seller is an organization and the buyer is an individual consumer.
That table below is a snapshot of some of the key differences between organizational and consumer markets.
| Characteristic | B2B: Organizational Markets | B2C: Consumer Markets |
|---|---|---|
| Buying Behaviour | More rational, based on organizational needs and objectives | More emotional, based on personal needs and preferences |
| Purchase Volume | Larger volume | Smaller volume |
| Number of Buyers | Smaller number | Larger number |
| Sales Cycle | Longer sales cycle, involving multiple decision-makers, and more complex buying process | Shorter sales cycle, typically involving a single decision-maker and a simpler buying process |
As organizational and consumer markets differ in their characteristics, needs, and purchasing behaviours, we will examine them separately the sections that follow.
Markets consisting of businesses, governments, and institutions that purchase goods and services for use in their operations or to resell to others.
A type of transaction or business model where businesses sell products or services to other businesses.
A type of transaction where businesses sell products or services directly to consumers.
