What's a Business Market? Definition, Characteristics & Types
This is one of the business strategies because it can be an ideal place for B2B marketing.
So that you can better understand the whole concept of the business market, let's look at the discussion in the following this article!
What is a Business Market?
Business to business or business market is a company's method of selling its products or services to business partners as its target market.
Usually one company will offer its products to other companies that make these goods as raw materials or business assets in carrying out production and then being marketed.
The business market usually involves two or more companies that are directly related.
Business management in it includes different relationships such as distributors with manufacturers to customers.
The business market is a market that tends to have a more competitive market share because there are many sellers.
The main industries that make up the existence of a business market are agriculture, mining, transportation to finance.
Based on the understanding of the business market and the examples above, it can be concluded that this type of market is large-scale which involves large amounts of goods and money.
For example, the business market is a coffee maker company will certainly buy selected coffee beans from large farmers.
After the coffee beans are successfully processed into ground coffee ready for sale, the coffee company will supply them to shops.
Business Market Characteristics
After knowing the meaning, here are some characteristic points that are owned by the business market. The characteristics of the business market are as follows.
- Involves a smaller number of buyers and sellers than consumer markets.
- Its customers usually have company goals or targets rather than personal goals.
- Companies in the business market have a higher level of bargaining power than in other marketplaces.
- The business market is one that involves buying by a more professional consumer.
- Demand in the market or demand is consistent and not influenced by market prices.
- The growth and decline of a business depends on the number of customers.
- It is more complex because there are different types of buyers.
- Requires an effective and efficient advertising and sales strategy.
Type of Business Market
The business market is divided into five based on product or service type, characteristics, and customer type.
Here is a full explanation.
1. Business to Business Market
It was mentioned at the beginning of the article that the B2B or business to business model market is a market that will offer its products or services to business partners who are the main target market.
Products or services purchased from the B2B market will then be used by buyers as raw materials to produce goods and then resold to their target consumers.
2. Business to Consumer Market
The business to consumer model or which is one type of business market is a form of market that will offer or advertise products and services directly to customers.
This is because this type of market will design marketing and sales strategies that consider the general public from age, gender, to different types of demand.
The characteristics of this type of business market are transactions that mostly use cash and utilize quite a variety of marketing channels.
3. Industrial Market
Products owned by this type of business market are goods that are not ideal for direct use by end consumers.
This is because this market offers products or services to business partners to be processed into new industries.
4. Service Market
This market is focused on offering services such as repair, maintenance, and repair to business rivals. This type of market can include B2B or B2C.
Thus, service business actors will sell services to more universal business consumers such as workshops, internet services or households.
5. Professional Service Market
This market model is usually widely applied by companies.
This is because this market offers their professional services to business partners, for example in the form of consulting to marketing.
Because it offers special services, business people as well as employees must have a certification that allows them to work in the related field. For example data scientists to business analysts.
Difference between Business Market & Consumer Market
After knowing about the types of business markets, to learn more about the business market, there are several points that can be used to differentiate, especially with the consumer market.
The following is a complete explanation of the differences between the business market and the consumer market.
1. Market Segmentation
In the business market, segmentation is carried out in stages in a systematic sequence.
2. Market Structure
The structure of the business market is usually identical with a small number of buyers but large capacity.
3. Request Character
The nature of demand that business markets have is consumer-derived. This means that the increase or decrease in demand for business products is influenced by the size of the demand from consumers.
Based on stability of market demand, business is more easily disturbed because there are fewer buyers but the purchase scale is large.
4. Transaction Process
The transaction process in the business market is gradual because there are policies, limitations and conditions that must be considered. Purchases in this market usually involve other parties so the process is not simple.
This is an explanation of what the business market is and how it differs from the consumer market. From the explanation above, we know that the business market is a market method that can maximize your business.