Essay on The Industrial Market: Business-to-business Markets
As consumers, we are quite familiar with the consumer market and the channels that they operate under. Although the question that needs to be asked is whether business-to-business markets distinguishes itself from the consumer market? Does the approach to consumer markets differ in any way?
Business-to-business markets operate under considerably more channels than the consumer market, ultimately the demand of the consumer is crucial if business-to-business markets were to be successful. Products would start out as raw materials and then the process of extraction would begin, there are a number of channels that may need to exist before the consumer could pick the product off the shelf. The packaging and distribution are …show more content…
Relationships in general are built upon trust and dependency, it is assumed that the same qualities must be evident if two parties within the world of business are to succeed. A customer buying regularly from the business-to-business supplier is normally an informal process, the process normally involves sales and technical representatives building a relationship with their customers and ultimately building trust.
The time and effort involved with building and developing these relationships also include relatively high costs, including the salary of sales representatives and costs associated with promotion. The consumer market does not need to develop such relationships, the consumer generally buy the products off the shelves and tend not to associate themselves with the retailer on a personal level.
On one side, there is the assumption that there is a need for organisations to build and maintain close and ultimately long relationships with their customers. Larson (1992) found that personal relationships shaped the context for new exchanges between firms by reducing risks and uncertainty about the motives and intentions of the other member. Although it has also been assumed that some buyers are not interested in developing close ties with their suppliers.
Joseph P. Cannon and William D. Perreault Jr (1999) study identified that different types of buyer-seller relationships prevail in different situations. Most closely…