Business market. All about the concept

The business market consists of organizations that buy goods and services to produce other goods and services, to resell to other business users or consumers, or to conduct the organization’s operations. It is an extremely large and complex market spanning a wide variety of business users that buy a board array of business goods and services. Besides manufacturing, the business market includes the agriculture, reseller, government, services, nonprofit, and international markets.

Business market demand generally is derived, inelastic, and widely fluctuating. Business buyers usually are well informed about what they are buying. Business market demand is analyzed by evaluating the number and kinds of business users and their purchasing power.

Business buying, or purchasing, has taken on greater strategic importance because organizations are buying more and making less, under intense time and quality pressures, and developing long-term partnering relationships with suppliers.

Business buying motives are focused on achieving a firm’s objectives but the business buying self-interest must also be considered.

The buying-decision process in business markets may involve as many as five stages: need recognition, identification of alternatives, evaluation of alternatives, purchase decision, and post purchase behaviour. The actual number of stages in a given purchase decision depends largely on the buying situation, whether new-task buy, straight re-buy, or modified re-buy.

Buying and Business Market

The concept of a buying centre reflects the multiple buying influences in business purchasing decisions. In a typical buying centre are people playing the roles of users, influences, deciders, gatekeepers and buyers.

Buying patterns (habits ) of business users often are quite different from patterns in the consumer market. In the business market, direct purchases (without middlemen) are more common, purchases are made less frequently, and orders are larger. The negotiation period usually is longer, and reciprocity arrangements are more common. The demand for services is greater, and the dependability of supply is more critical. Finally, leasing (rather than product ownership) is quite common in business marketing.