Consumer Market vs Business Market: Difference and Comparison

What is the difference between the consumer market and the business market (consumer market vs business market)?

Generally, companies selling their products or services will either sell to other businesses or directly to consumers.

The consumer market is made up of businesses that sell their goods directly to consumers, while the business market is made up of businesses that acquire both products and services used in the manufacturing of other goods and services.

It’s important to know and understand the key differences between consumer and business markets, as it will help you improve your sales skills using the perfect techniques.

We will be discussing the differences between a consumer market and a business market. But first, we begin with the definition of the consumer market and business market.

What Is a Consumer Market?

A consumer market is a type of sales market involving businesses selling their products directly to consumers. It’s also known as a business-to-consumer (B2C) market.

It’s a sales market that involves dividing consumers into markets and meeting their demands according to their interests, likes, dislikes, opinions, and values.

Consumers pay the same price for every product when making purchases in a consumer market. Consumers can also pay a reduced price for products with the use of coupons or merchant discounts.

When there is an increase in demand from the consumers, the business selling to these consumers will demand more products from their suppliers.

According to Indeed.com, the main types of consumer markets include food and beverage products, consumer products, retail products, and transportation products.

The business-to-consumer (B2C) mainly relies on customers facing certain influences like taste and preferences, reference groups, economic conditions, and ad marketing campaigns.

Businesses will carry out market research in an effort to determine the characteristics of their consumers.

Demographic Characteristics: It includes looking at the customer’s age, gender, occupation, education, ethnic background, and income.
Behavioural Characteristics: This includes looking at the customers that are light, medium or heavy users and how often they return to the business.
Geographic Characteristics: It includes looking at the market size, population density of different regions customers belong to and climate.

Also Read: White Sperm vs Clear Sperm: Differences and Comparison

What Is a Business Market?

A business market is a sales market that involves businesses selling their products and services to other businesses.

Unlike a consumer market, a business market involves a business-to-business (B2B) transaction. It’s a sales market that sells to retail and wholesale businesses.

In a business market, the buyer company buys products from a seller company and will use the purchased products to help in their own production of other goods. The buyer company can also resell purchased products directly to a final consumer.

The following are the main types of business markets:

Government markets are where government entities make up the majority of buyers.
Industrial markets only concentrate on the sale of industrial products or services.
Financial service markets are established for banking and commercial credit.

Business markets use a payment structure that relies on logistics determined by the buyers and sellers.

The buyer makes an order for products with the seller and the seller ensures the products are delivered to the buyer and also sends the buyer n invoice. The buyer will use the invoice sent by the seller to make a payment based on the terms of the sale agreed upon.

Also Read: Sleep vs Rest: Difference and Comparison

Consumer Market vs Business Market: Differences

Here are a few key differences between a consumer market vs business market.

Buyers

A consumer market is a type of sales market involving businesses selling their products directly to consumers.

In a retail setting, customers go into a store searching for specific items to purchase. Sales representatives often assist customers with items they are looking for and also provide answers to questions regarding certain products.

In a business market, business-to-business (B2B) companies have fewer buyers making bigger purchases and also keep account of every buyer.

Money

In a consumer market, the amount of money handled is usually small. This is because consumers make purchases based on what they currently want.

On the other hand, business-to-business markets handle large amounts of money because they sell to other businesses.

While consumer markets often sell directly to consumers and handle smaller amounts of money, B2B markets handle large amounts of money because of large-scale purchases from other businesses.

The large amount of money made from the large purchases is used to optimize business operations.

Number of Consumers

In a consumer market, there are more consumers making purchases. Because of the large number of consumers, merchants build stores and websites to accommodate a large number of consumers.

Consumers usually purchase products based on their interests and personal preferences. This is why in a business-to-consumer market, there is a variety of products available for consumers.

In contrast, a business market has fewer buyers since it involves selling to other businesses instead of consumers. The few buyers however make large purchases more often.

Also Read: Genotype vs Phenotype: Differences and Comparison

Decision Processes

In a consumer market, companies often work with shorter decision cycles.

Business-to-consumer companies experience more consumers returning on an irregular cycle based on their desire instead of relying on a regular schedule.

In a business market, the decision process for making purchases is more formal, involving more people from different departments.

Advertising

In a consumer market, businesses mainly rely on mass marketing. They use several advertising channels such as television, social media, marketing emails, print ads, and display advertising.

Brand loyalty is very important to businesses in a business-to-consumer market.

Business-to-business markets use advertising in a different way compared to consumer markets. Business markets often use formal channels such as magazines, newspapers, and calls to potential business clients.

Also Read: Food Chain vs Food Web: Differences and Comparison