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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.

Table of Contents

  • Here are some differences that will help you distinguish between these two markets;
  • Difference between business markets and consumer markets due To The Nature Of Purchases
  • Difference between business markets and consumer markets on the basis of demand
  • Differences of business markets and consumer markets based On A Global Perspective
    • Related posts:

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.

Business vs consumer market

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.

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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.

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

  1. 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.
  2. Organizational consumers are likely to require exact product specifications. Final consumers more often buy on the basis of description, style, and color.
  3. 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

  1. 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.
  2. Demand is volatile due to the accelerator principle, whereby final consumer demand affects many levels of organizational consumers.
  3. There are fewer organizational consumers than final consumers.
  4. Business market consumers tend to be geographically concentrated.
  5. Buying specialists are often used.
  6. Distribution channels are shorter.

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

  1. As with final consumers, there are many distinctions among organizational consumers around the world and sellers must understand and respond to them.
  2. Companies doing business in foreign markets must know how to deal with organizational consumers in those markets.
  3. Nations’ cultures have a large impact on the way their organizational consumers negotiate and reach decisions.

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About Hitesh Bhasin

I love writing about the latest in marketing & advertising. I am a serial entrepreneur & I created Marketing91 because i wanted my readers to stay ahead in this hectic business world. You can follow me on Facebook. Let's stay in touch :)

Comments

  1. Ira Sharma says

    great!!!!!!!!!
    you r becoming like my online teacher..
    thanks

    Reply
    • menzi says

      hi i have an issignment here i need to knw the determinant of a market value secondly is the different between business and market

      Reply
  2. Aki D Amorous says

    how are B2C and C2B related?
    please reply to my mail.
    Thanx.

    Reply
  3. thanuja says

    hye can u tell me what are the 5 elements of consumers market ?

    please reply to my email .

    thanks (:

    Reply
  4. Johana Sandoval says

    Hello can you help me to recognize the chief differences between consumer goods marketing and business marketing when it comes to Buyer-seller, relationship, Product, price, promotion , and channel? thank you :)

    Reply
  5. andrew says

    excelent

    Reply
  6. MARY says

    HELLO .
    CAN YOU EXPLAIN THE MARKET STRATEGIES THAT CAN BE USED BY A MARKET LEADER. PLEASE REPLY TO MY EMAIL ADRESS.
    THANK YOU..

    Reply
  7. Md Hasim Mia says

    Dear respect

    thanks for your showing but still I am not clear distinguish between Business market & consumer market, can you help?

    Best regards,
    Md Hasim Mia

    Reply
  8. LOTI says

    Hello can you help me to recognize the chief differences between consumer goods marketing and business marketing and which one is best ?

    Reply
  9. Zahir Abdullah Ali says

    Very effective and easily understandable to anyone .Very well work done by author.
    This help me in my notes making and lecture that I attend in my university.
    A lot of Thanks!

    Reply
  10. Emilia says

    Hey, please can you give difference between consumer markets and business markets, comment on their buyer behaviors. Send the answers to my email.

    Reply
  11. Fransina says

    Hey, can you give the difference between consumer markets and business markets, comment on their buyer behaviours. Send the answers to my email

    Thanks in advance

    Reply
  12. Mariah says

    Hi??Can you please help me give the difference between consumer markerts and business markets , comment on the buyer behavior

    Reply
  13. Esther says

    Help me with the difference between consumer markets and business markets base, comment on the buyers behavior.

    Sent the answers to my email

    Reply
  14. Keren says

    Help me with the differences between consumer market and organizational market

    Reply

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