Comparing Consumer to Industrial Marketing. Page 2 / 5

2.1 How many participants are typically in a marketplace?

Industrial markets

Industrial markets typically contain significantly fewer possible purchasing entities than consumer markets.

Often it may be possible to identify all possible buying organisations in a particular industrial market niche, gather detailed information about each of them and approach them individually.

There would in this instance be plenty of alternatives to mass advertising in order to create awareness of an offering.

Consumer Markets

Consumer markets are typified by containing large numbers of potential buyers.

Consumer markets may feature no or very low entry barriers to buyers, thus an individual, active in the market for youth fashion clothes, may suddenly enter the market for mothercare products. There is little precise forecasting that could have predicted when this individual would have entered this market as a buyer so consumer marketing must rely on the statistics for a larger population to predict this behaviour.

Summary: there is considerable difference between Industrial and consumer markets where the number of active participants on the buying side are concerned.

2.2 How many people are involved in buying decisions?

Industrial markets

In industrial purchasing it is typical that more than one person is involved in buying decisions with the number and rank of people involved increasing according to the value or strategic importance of the purchase. In marketing literature this is termed a "buying group" and the effect on marketing people is that the individuals you target to influence purchasing decisions may not be the people actually making the purchase.

Often even in small value purchases another person will authorise expenditure, perhaps sign purchase requisitions, purchase orders or cheques.

Consumer Markets

Often only one individual consumer is involved in a consumer buying decision.

While there are many reasons why a group of consumers can influence consumer buying, consumers are limited to the number of people they can involve in a purchasing decision by the number who have a stake in the purchase.

This may include family members, parents or children and sometimes third party specifiers for example lenders who may specify a type of house insurance.

(In the case of marketing toys to children, communications are typically aimed at children but it will be the parents who may actually make the purchase - note similar to "buying group" of industry).

Summary: it is normal for more people to be involved in buying decisions in industrial markets but this also occurs in consumer markets in a more informal way.