Login
Copyright

Business Marketing: Producers, Resellers, Governments & Institutions

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Business Buyers: New Buy, Modified Rebuy, Straight Rebuy

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:05 Business Markets
  • 0:45 Defined
  • 2:17 In Action
  • 4:09 Importance
  • 4:43 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
Create an account to start this course today
Try it free for 5 days!
Create An Account

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: John McLaughlin
In this lesson, you will learn about the four different business markets and what makes them different from each other. You will learn how each business market typically buys goods and services and why it is important for marketers to be able to distinguish between these types of markets.

The Four Different Types of Business Markets

Meet Carlton the Courier. His job is to deliver whatever his customers need as fast as he can. Carlton has never lost a package or been late for a delivery. Many of Carlton's customers think he is the best courier in the world. One time, Carlton was delivering an enormous wedding cake, and his truck got a flat tire. Carlton hailed a taxi, strapped the cake to the roof of the cab, and made his delivery just in time to hear the bride say, 'I do.' There are four different types of business markets, and Carlton delivers different goods to all four types.

Business Markets Defined

A business market is made up of groups of people who buy goods and services to use in producing other products, to resell, or for their own use in their day-to-day operations. The four different types of business markets are:

  • Producer markets: Producers buy goods and services and transform them into a sellable product, which they sell to their customers for the purpose of making a profit. Examples of producers are farmers, manufacturers and construction companies.
  • Reseller markets: Resellers buy finished products and resell them to their customers for the purpose of making a profit. Resellers do not modify the products they buy. Resellers can be wholesalers who sell their products to other resellers or retailers who sell their products to end users.
  • Government markets: Governments buy goods and services to support their internal operations; they do not transform the goods and services or resell them to make a profit. Government markets usually buy their goods through a bidding process and include federal, state, county, and local governments.
  • Institutional markets: Institutions are non-government organizations that buy goods and services to support their internal operations. The function of institutions is to better their communities, not to make a profit. Examples of institutional markets are churches, hospitals, and colleges.

Business Markets in Action

On an average day, Carlton will serve all four business markets. His first delivery today is to Manny's Mattress Factory. Manny is about to run out of the springs he puts into the mattresses he makes. If Manny can't make mattresses, he can't sell them and won't make a profit. Manny is a producer who transforms many different parts into mattresses, which he sells in order to make a profit.

Carlton's next delivery is to Paula's Pet Store. Paula is having a sale on iguanas today and has almost sold her entire inventory of heat lamps. Since iguanas must have a heat lamp, she cannot sell any more iguanas until Carlton delivers more heat lamps to her. Paula tells Carlton to hurry because without the heat lamps, she is losing sales, which will have a negative impact on her profits for the day. Paula is a reseller since she does not transform the products she sells and does try to make a profit.

After delivering the heat lamps, Carlton gets an urgent call from City Hall. The mayor is giving a speech in thirty minutes, and they don't have enough folding chairs for all the reporters who are going to be there. City Hall is a government market that buys goods and services to support their internal operations. Government markets do not try to make a profit.

It's getting late in the day when Carlton gets his last call. An administrator from the hospital calls Carlton and tells him they had more people than expected turn out for their blood drive, and they are running out of sterile gauze. Businesses, like colleges and hospitals, are institutional markets. They buy products to support their internal operations, and their goal is to better their community, not to make a profit.

To unlock this lesson you must be a Study.com Member.
Create your account

Register for a free trial

Are you a student or a teacher?
I am a teacher

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back

Earning College Credit

Did you know… We have over 95 college courses that prepare you to earn credit by exam that is accepted by over 2,000 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it free for 5 days!
Create An Account
Support