NATURE AND SCOPE OF THE BUSINESS MARKET

 The business market consists of all
business users, organizations that buy goods and services for one of the
following purposes:

(i)     To
make other goods and services. FFF buys wood to make furniture.

(ii)     
To
resell to other business users or to consumers.

(iii)      To conduct the organization’s
operations. The Obafemi Awolowo University buys office supplies and electronic office equipment for
use in registrar’s office, and her Teaching Hospital buys supplies to use in
the surgical operating rooms.

In the business market we
deal with both consumer products and business products.

Business
marketing, then, is the marketing of goods and services to business users, as contrasted to ultimate
consumers.

About 50 percent of all manufactured products are sold to
the business market. In
addition, about 80 percent of all farm products and virtual y all minerals, forest
and sea products are business goods. These are sold to firms for further processing.

Every retail
store and wholesaling establishment is a business user. Every bus company airline, and railroad is part
of this market. So is every hotel, restaurant, bank, insurance company, hospital, theater and school.

COMPONENTS OF THE BUSINESS MARKET

Traditionally, business markets were
referred to as industrial markets. Manufactures constitute a major
portion of the business market, but there are also six other components,  agriculture, resellers,
government agencies, service companies, nonprofit organizations and
international.

THE AGRICULTURE MARKET

The high level of income from the sale of agriculture products gives
farmers, as a group, the purchasing powers that make them a highly attractive market. Moreover, world population forecasts and food shortages in many
countries undoubtedly will keep
pressure on farmers to increase their output.

Agribusiness: farming, food processing,
and other large-scale farming-related business, is big business in every sense of the word.

Agriculture has become a modern industry.
Like other business executives, farmers
are looking for better ways to increase their productivity, cut their expenses

THE RESELLER MARKET

Intermediaries constitute the reseller market. The basic activity of
resellers, unlike any other business market segment- is buying products
from supplier organizations and
reselling these items in essential y the same form to the resellers’
customers. In economic terms, resellers create time, place and pos­session utilities, rather than form
utility.

It is their role as buyers for resale that differentiates resellers and
attracts special marketing attention from their suppliers. To resell an
item, you must please your customer. Do you know that it is more difficult to
determine what will please an
outside customer than to find out what will satisfy someone within your own
organization?.

THE GOVERNMENT MARKET

The government market
includes Federal, state, and local government units

that spend
billions of naira a year buying for government institutions such as schools, offices, hospitals and military
bases.

Government procurement processes are different from those in
the private sector of the business market. Try to support this statement
by finding out how governments make
their purchases in at the various ministries and parastatals.

THE SERVICES MARKET

THE “NON-BUSINESS” BUSINESS MARKET

The non-business market includes such
diverse institutions as churches, colleges and universities, museums, hospitals
and other health institutions. Political parties, labour unions, and charitable
organizations. Actual y, each of these so-called non-business organizations
is a business organization. These organizations do virtual y all the things
that business do — offer a
product, collect money, make investments, hire employees -and therefore require
professional management.

Nonprofit organizations also conduct
marketing campaigns, in an effort to attract millions of Naira in
contributions. In turn, they spend millions of Naira buying goods and services
to run their operations. When you look closely at your NGOs, your church or mosque you will tend to agree to the
fact that they are business organizations.