What Are the Three Types of Organizational Markets?

Save

Organizational markets are markets in which companies and individuals purchase goods for purposes other than personal consumption. These markets are characterized by having fewer buyers, but larger purchase volumes, than consumer markets do. Their marketing is focused on corporate goals, return on investment and technical suitability, rather than the styles, fads and perceived values found in consumer markets. The main organizational market types are producers, resellers and institutions.

Businesspeople exchange information at a conference.
Businesspeople exchange information at a conference. (Image: Ciaran Griffin/Stockbyte/Getty Images)

Basic Marketing

One of the first tasks of marketing is to segment the market so that sellers can apply marketing strategies that are appropriate and most effective for a particular segment. Examining the type of organization is one way to segment non-consumer markets. Producers, resellers and institutions require different approaches, while organizations within one of these three segments have much in common. This segmentation allows marketers to develop particular approaches to a potential customer in government, while handling a wholesale company in a completely different manner.

Group of employees in marketing meeting.
Group of employees in marketing meeting. (Image: Robert Churchill/iStock/Getty Images)

Producers

Producers buy raw materials and machinery, often from other producers but sometimes from resellers. Marketing to producers requires technical expertise and a knowledge of the producer's operations. Typical marketing strategies involve identifying problems in the producer's industry or particular operations and proposing solutions that are cost-effective. Producers have a long-term view of markets since their needs change slowly. As a result, marketing to producers is usually based on long-term relationships.

Traffic lanes run through an industrial shipping yard.
Traffic lanes run through an industrial shipping yard. (Image: Felipe Dupouy/Digital Vision/Getty Images)

Resellers

Resellers include wholesale companies and retailers, as well as niche suppliers that specialize in particular areas where they have expertise. The key factor for marketing to resellers is to be aware of their added-value proposition. If the reseller is a wholesale company offering low prices for high volume, marketers must develop proposals that address this characteristic. If the company buys specialized equipment according to specifications and re-sells it to customers based on high quality and reliability, the marketing will be different.

An employee delivers a truckload of cardboard boxes.
An employee delivers a truckload of cardboard boxes. (Image: Manuel-F-O/iStock/Getty Images)

Institutions

The institutional market includes governments and non-profits. Marketing to these organizations is highly specialized, with marketers relying on long-term relationships as well as large, one-time opportunities. The purchasing process for governments tends to be highly bureaucratic, and a familiarity with government procedures is a prerequisite. Where the idea of value in the other two market segments tends toward the economic, value for these institutions exists more in terms of benefits rather than economics. Marketers must structure proposals keeping this in mind.

A government shipment is delivered at an airport.
A government shipment is delivered at an airport. (Image: John Moore/Getty Images News/Getty Images)

Related Searches

References

Promoted By Zergnet

Comments

You May Also Like

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!