30 CHAPTER 2 UNDERSTANDINGAND APPROACHINGTHEMARKET
TypesofMarkets
Nowthatwehavedefinedmarket~ina generalsense,iti~usefultodiscuss thecharacter-
isticsofthepr:marytypesofmarkets:(1)consumer markets,(2)industrialmarkers,(3)
institutionalmarkets, and(4)resellermarkets.It shouldbenotedthatthesecategoriesare
notalwaysclear-cut.Insomeindustries,a business maybeina differentcategoryaltogether
ormayevenencompassmultiplecategories.It isalsopossiblethataproductmaybesold
inallfourmarkets.Consequently,itisimportanttoknowasmuchaspossibleabouthow
thesemarketsdiffersothatappropriatemarketingactivitie~canbedevelop~l;.
ConsumerMarkets
Whenwetalkaboutconsumermarkets,weareincludingthoseindividualSandhouseholds
whobuyandconsumegoodsandservices fortheirownpersonaluse.Theyarenotinter-
estedinresellingtheproductorsettingthemselve s upasa manufacturer.Consideringthe
thousandsofnewproducts,services,andideasbeingintroducedeachdayandtheincreased
capabilityofconsumerstoaffordtheseproducts, thesize,complexity, andfuturegrowth
potentialoftheconsumermarketisstaggering.Thenextchapter,Chanter3,toucheson
manyoftheseissues.
IndustrialMarkets
Theindustrialmarketconsistsoforganizationsandthepeoplewhoworkforthem,those
whobuyproducts orservicesforuseintheirownbusinessesortomakeotherproducts.
Forexample,a steelmillmight purchase computer software,pencils, andflooringaspart
oftheoperationandmaintenanceoftheirbusiness.Likewise,a refrigeratormanufactuler
mightpurchasesheetsofsteel,wiring,shelving,andsoforth,aspartofitsfmalproduct.^2
Thesepurchasesoccurintheindustrialmarket.
Thereissubstantialevidencethatindustlialmarkets functiondifferentlythandocon-
sumermarketsandthatthebuyingprocess in particularisdifferent.
InstitutionalMarkets
Anutherimportantmarketsectorismadeupofvarioustypesofprofitandnonprofitinsti-
tutions,suchashospitals, schools,churches,andgovernmentagencies.Institutionalmar-
ketsdifferf;'omtypicalbusinessesinthattheyarenotmotivatedprimarilybyprofitsormarket
share.Rather,institutionstendtosatisfysomewhatesoteric, oftenintangible, needs.Also,
whateverprofits existafterallexpensesarepaidarenormallyputbackintotheinstitution.
Becauseinststutionsoperateunderdifferentrestrictionsandemploydifferentgoals,mar-
ketersmustusedifferentstrategiestobesuccessful.
ResellerMarkets
Allintermediariesthatbuyfinishedorsemi-finishedproducts andresellthemforprofitare
partoftheresellermarket.This marketincludesapproximately 383 ,000wholesalersand
1,300,000retailersthatoperateintheU.S. With theexceptionofproducts obtaineddirectly
fromtheproducer,allproductsaresoldthroughresellers.Sinceresellersoperateunderunique
businesscharacteristics, theymustbeapproachedcarefully.Producersarealwayscognizant
ofthefactthatsuccessfulmarketingtoresellers isjust asimportantassuccessfulmarket-
ingtoconsumers.
