Market And Business

Characteristics of Business Market

Some of the characteristics of business markets are given below, we’ll discuss them one by one. Here it follows;

Market Structure and Demand

Business markets contain fewer but larger buyers. When it comes to the customers in the business market, then it has very few customers. Those business buyers won’t buy your product or service in small quantities. They’ll buy in large quantities, their orders are big.
Business customers are more geographically concentrated. Our mind is accustomed to the consumer market, where there’ll be shops in the market. People would visit the shop or the market and they’d buy stuff. But the business market doesn’t work that way, business customers and buyers are concentrated at vast geographical distances.
Business buyers demand is derived from final consumer demand. The only reason one business would buy the products and service from the other business, it is because its final products are selling in the market. Once the final products stop selling in the market; then the business stops buying the products.
Demand in many business markets is more inelastic – not affected as much in the short run by price changes. The good thing about the demand in the business market; that the prices don’t usually affect the demands. Prices don’t much change.
Demand in business markets fluctuates more quickly. Businesses usually prefer to buy products at a very low price, because they have to add a value in it to make the final product for the end consumers. When the prices get higher because of number of reasons, the business would stop buying the products. It’s because they know that the final product would be costly. High product price won’t sell in the market.

Nature of the Buying Unit

Business purchases involve more buyers. When it comes to the purchases of business, then a business buys and sells at the same time to other businesses.