the-nature-of-marketing markets

Consumer and industrial markets

• An industrial market is where businesses sell their products or services to other businesses

  • Goods are not usually for final consumption, but are used to help make other products or to support business operations

  • It is also known as B2B (business-to-business) selling

    • E.g. a company that produces steel may sell it to a car manufacturer

• A consumer market is where businesses sell products or services directly to individuals for their own personal use

  • It is often called B2C (business-to-consumer) selling

  • These include markets for goods and services such as clothing, smartphones, fast food or video streaming platforms

Key differences between consumer and industrial markets

Local, national and international markets

• A local market is where goods and services are bought and sold within a small geographical area, such as a town or city

  • They serve nearby consumers and are often run by small businesses

    • E.g. a local bakery selling fresh bread to people in the same neighbourhood or a hairdresser serving clients in their local town

• A national market is where a business operates and sells its products or services across the entire country

  • Customers can come from anywhere within that country, and businesses use websites, advertising and delivery services to reach a wider audience

    • E.g. Ale Hop sells gifts, stationery and homewares through stores and online across the whole of Spain

• An international market is where businesses sell their products or services in more than one country

  • Businesses operating in these markets have to deal with different languages, cultures, laws and currencies

    • E.g. Coca-Cola sells drinks globally and Samsung sells electronics in many different countries

Product orientation and customer orientation

Product orientation

• A business with a product orientation focuses primarily on manufacturing a product rather than the needs of the consumer

  • The emphasis is on creating a product first and then finding a market

  • Over time, being too product orientated means the business may move further and further away from what the market is looking for, thus increasing the risk of business failure

    • E.g. Gillette‘s razors can be classified as a product-orientated business as the business focuses on the quality of its products and regular innovations aimed at increasing sales

Benefits of product orientation

• Focus on quality and innovation

  • Businesses can develop high-quality or unique products by concentrating on design and production

• Strong brand image

  • Offering something distinctive or well-made can build a strong reputation and brand loyalty

• Less need for constant market research

  • Product-oriented firms rely more on internal expertise than customer feedback

• Efficient production

  • Standardised products allow for economies of scale and streamlined processes

Customer (market) orientation

• Customer (market) orientation is a business approach that focuses on the consumer demand and designs products that meet customer needs 

  • Consumers are at the centre of marketing decisions

  • Products are designed to meet consumers’ needs

    • E.g. Universities often develop new courses based on the feedback they receive from students and employers

Benefits of customer orientation

• Better customer satisfaction

  • Products are developed based on what customers actually want and need

• Stronger customer loyalty

  • Meeting customer expectations can lead to repeat purchases and positive word-of-mouth

• Faster response to market changes

  • Businesses can adapt quickly to changes in tastes, trends, or demand

• Higher sales potential

  • Products are more likely to succeed when they’re tailored to the target market

Market share and market growth

• Market share is the proportion of the total sales of a product or service compared to the market as a whole

  • e.g. Tesco has 26% of the UK grocery market

• Market share can be calculated using the formula