TYPES OF M A RKETS
Now that we have defined
in a general sense, it
useful to discus s the character-
istics of the pr:mary types of markets: (1) consumer markets, (2) industrial markers, (3)
institutional markets, and (4) reseller markets. It should be noted that these categories are
not always clear-cut. In some industries, a business may be in a different category altogether
or may even encompass multiple categories. It is also possible that a product may be sold
in all four markets. Consequently, it is important to know as much as possible about how
these markets differ so that appropriate marketing
can be
Consumer Markets
When we talk about consumer markets, we are including those individualS and households
who b u y and consume goods and services for their own personal use. They are not inter-
ested in reselling the product or setting themselves up as a manufacturer. Considering the
thousands of new products, services, and ideas being introduced each day and the increased
capability of consumers to afford these products, the size, complexity, and future growth
potential of the consumer market is staggering. The next chapter, Chanter 3, touches on
many of these issues.
Industrial Markets
The industrial market consists of organizations and the people who work for them, those who buy products or services for use in their own businesses or to make other products.
For example, a steel mill might purchase computer software, pencils, and flooring as part
of the operation and maintenance of their business. Likewise, a refrigerator manufactuler
might purchase sheets of steel, wiring, shelving, and so forth, as part of its fmal product.2
These purchases occur in the industrial market.
There is substantial evidence that industlial markets function differently than do con-
sumer markets and that the buying process in particular is different.
Institutional Markets
Anuther important market sector is made up of various types of profit and nonprofit insti-
tutions, such as hospitals, schools, churches, and government agencies. Institutional mar-
kets differ f;'om typical businesses in that they are not motivated primarily by profits or market share. Rather, institutions tend to satisfy somewhat esoteric, often intangible, needs. Also,
whatever profits exist after all expenses are paid are normally put back into the institution.
Because inststutions operate under different restrictions and employ different goals, mar-
keters must use different strategies to be successful.
Reseller Markets
All intermediaries that buy finished or semi-finished products and resell them for profit are
part of the reseller market. This market includes approximately 383,000 wholesalers and 1,300,000 retailers that operate in the U.S. With the exception of products obtained directly
from the producer, all products are sold through resellers. Since resellers operate under unique business characteristics , they must be approached carefully. Producers are always cognizant
of the fact that successful marketing to resellers is just as important as successful market-
ing to consumers.
APPROACHING THE MARKET
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AD 2.1
The Olympus camera is part of the consumer market.
APPROACHING THE MARKET
A;l the parties in an exchange usually have the ability to select their exchange partner(s).
For the customer, whether consumer, indus:rial buyer, institution, or reseller, product choices
are made daily. For a product provider, the person( s) or organization( s) selected as potential customers are referred to as the target market. A product provider might ask: given that my product will not be needed and/or wanted by all people in the market, and given that my
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