Principles of Marketing

Principles of Marketing - MIDTERM

Definitions: Consumer and Business Markets

A market is a place where buyers and sellers meet and where good and services are offered for sale and the transfer of ownership. Before marketers seek to affect the whats, whens, and hows of buying behavior, they must first understand the whys of buyers in their target markets. It is reported that the American consumer market consists of more than 300 million people who consume more than $12 trillion worth of goods and services each year, making it one of the most attractive consumer markets in the world. The global consumer market consists of more than 6.5 billion people who annually consume an estimated $61 trillion worth of goods and services.

There is a distinct difference in marketing to a business that is focused on profitability versus marketing to an individual consumer who is focused on meeting a need, preference and/or expectation. A consumer market consists of individuals and households. The focus is on the purchase or acquisition of good and services for personal consumption. The consumer market is huge and it is driven by a wide array of demographically specific information about the individuals and households who consume products and services, i.e. mothers between the ages of 20 -30; mothers between the ages of 50 – 60. These two consuming groups have a lot in common but demographic details would enable marketing firms to pinpoint how each group might respond differently to purchasing the same product. A business market consists of individuals, corporate entities, wholesalers, governments, and other commercial organizations and institutions, i.e. restaurants, retailers – clothing, food, auto manufacturers and the local auto dealerships, all of whom do business with each other. Overall, it involves marketing products and services to other companies or “wholesale” businesses that will “resell” the products or services to another market segment or that will use the...