Business Marketing vs. Consumer Marketing
Content Page
1.2. Market opponents’ behaviour 1
2.2. Distribution channel alternative. 3
2.4. Information management tool 4
2.5. Supply chain integration. 4
3.2. Personal selling emphasize in business marketing. 5
3.3. Sales force organisation. 5
1. Analyse the differences between business marketing and consumer marketing.
1.1. Introduction
Whenever goods or services are sold for the use of producing other goods and services that will be sold or supplied to others we describe this as a business market. The total number of transactions that take place here is by far higher than being on the consumer market, where the ultimate consumer demands the product or service. An average shoe and its constituents, for example, will probably be sold five times to another business customer until the final consumer sees it on the shop shelf. Accordingly those transactions are called business to business marketing and exceed by far the sales to consumers. Although having a lot in common with the consumer market, there are also certain differences which mainly occur in terms of market opponents and their behaviour, who is buying and the type of purchase decision. (Kotler et al 2001, p.235) In the following I am going to explain this further.
1.2. Market opponents’ behaviour
Usually business marketers deal with “…fewer but …larger buyers” (Kotler et al 2001, p.235) than operating on a consumer market. Additionally, business customers tend to have a greater bargaining power and are often more geographically concentrated. In the car manufacturer industry, for example, the suppliers normally locate their site close to the actual manufacturing plant. It may even be on the same site and for outsiders difficult to differentiate. Traditionally, in certain areas several businesses producing comparable products can be found. In the German capital Berlin one can find “Siemensstadt” where SIEMENS has its traditional Berlin headquarters and it is surrounded by a lot of medium sized companies supplying a great variety of products which SIEMENS needs to manufacture their goods. Typically, the business market demand can be described as derived – “it ultimately derives from the demand of consumer goods” (Kotler et al 2001, p.236) At the same time the business demand is more fluctuating. Whereas a large number of consumer goods are steadily demanded, the demand for business goods changes more and more quickly. As adaptation to changes, i.e. adjusting the production capacity is not as quickly done as for consumer’s the impact for businesses will hit the demand later and may then be accelerated. (Kotler 1997, p.205) Another significant difference is that demand for business products often is price inelastic. A change in price will not have the same impact on the costumers demand as it would have in a consumer market situation.
