TOPIC 3

PRINCIPLES OF MARKETING

Consumer and Business Market

COURSE LEARNING OUTCOME

Upon completion of this course, students should be able to:

1. Apply the knowledge of marketing strategies and marketing mix that

are relevant to the organizations’ objectives (C3, PLO1)
At the end of this lesson, students should be able to:

3.1 Explain consumer and business market

3.2 Examine the characteristic between consumer and business market
3.1 Consumer & Business Market

3.1.1 Consumer Market

Consumers are individuals who buy products and services for themselves or on behalf of their household
They are the final user or end user of the product
That buy things that enable them to:
i.Survive the physical demand of life
ii.Indicate their roles in society
iii.Express their personality
iv.Emphasizes the values they hold
v.Demonstrate their wealth
 Consumer buyer behavior
Refer to the buying behavior of final consumers- individuals and households that buy goods and services for
personal consumption
 Consumer buyer behavior describes the process of how consumers make purchase decisions and how they
use the purchased products
 Need to understand :
 How the decision making process comes about
 Why consumers make a purchases that they make
 What factors influence consumers purchases

 Consumer market
All the individuals and households who buys or acquire goods and services for personal consumption
 3.1.2 Business Market

 Businesss
 Buy goods and services for further processing or use in their
production processes
 An organization/enterprising entity engaged in commercial, industrial,
or professional activities.
 Profit entities or non-profit organizations, operate to fulfill a charitable
mission or further a social cause.
 Organized efforts and activities of individuals to produce and sell goods
and services for profit.
 From a sole proprietorship to international corporation

 Business buyer behavior

Refers to the buying behavior of the organizations that buy goods and services for use in
production of other products and services that are sold, rented, or supplied to others. Also
included are retailing and wholesaling firms that acquire goods to resell or rent to others for
profit.
 Business buying process
Is the process where business buyers determine which products and services are needed to
purchase, and then find, evaluate, and choose among alternative brands

Business market is huge

Involve far more dollars & items than do consumer markets
Many sets of business purchases were made for only one set of consumer purchases
Both Consumer & Business market involve people who assume buying roles and make
purchase decisions to satisfy needs
Characteristics of Business Markets
Market Structure & Demand
Fewer and larger buyers
Derived demand – derived from
consumer goods
- Inelastic demand – not affected as
much in the short run by price
changes
- Fluctuating demand – more &
more quickly demand
Geographical concentrated
Nature of the Buying Unit
Business purchases involve more
buyers
More decision participants
Business buying involves a more
professional purchasing effort
Types of Decisions and the Decision
Process
Business buyers usually face more
complex buying decisions
The business buying process is more
formalized
In business buying, buyers & sellers work
more closely together & build close long-
term relationships
Buyer and seller dependency
 Business Markets
Types of Decisions and the Decision Process

Supplier development is the systematic development of

networks of supplier-partners to ensure an appropriate
and dependable supply of products and materials that
they will use in making their own products or resell
 3.2 The Characteristic between Consumer & Business Market
3.2.1 Comparison between Consumer & Business Market
Consumer Market Business Market
 individuals and households who buys or acquire - Buy goods and services for further processing or
goods and services for personal consumption use in their production processes
- More individual buyers - Fewer and larger buyers
- Create demands for products & services  Demand derived from consumer goods
 Geographically disbursed, mass markets and
- Geographical concentrated
standardized
 Involvement of family members - Business purchases involve more buyers
 Purchase decisions are mostly made on - More decision participants
physiological/social/psychological needs - Business buying involves a more professional
 Individual decision
 Non -professional purchasing effort
 Non complex  Business buyers usually face more complex
buying decisions
  The business buying process is more formalized
Informal
 Buyer & seller are not working closely more on - In business buying, buyers & sellers work more
relationship marketing closely together & build close long-term relationships
- Buyer and seller dependency
 TASK
Due date 8 sept
1. Explain the definition of the consumer market using appropriate examples.
2. Products in the market can be divided into two, namely consumer products and industrial
products. State THREE differences between consumer products and industrial products.
3. Select THREE name of company in Malaysia and identify;
a) Consumer market
b) Business market
“Milk” is the most important food for every baby age1 month to 12 months. Parents will
choose the right milk for their baby so that the baby gets enough nutrients for the development
body. Therefore, baby milk producers such as Nestle Sdn Bhd (Malaysia) always strive to
improve the quality of baby milk products produced by his company to meet the needs of
parents in the Malaysian market.
Based on the above statement, explain how the following micro marketing environment
factors affect Syarikat Nestle Sdn Bhd;
a) Customers
b) Suppliers
c) Marketing intermediaries
d) Competitors
Based on the above statement, explain how the following macro marketing environment
factors affect Syarikat Nestle Sdn Bhd;
e) Economic
 TQ

Q & A Session