Business School

Organizational Markets

Organizational Markets
Written by LynkUPP

Introduction: What is Organizational Markets? Organizational markets exist to cater for the needs of those individuals and establishments that buy goods, raw materials, and services for use in further production other than for consumption. The difference between consumer and organizational markets lies in the fact that the former caters for the ultimate consumers, while the latter caters for industrial users.

A marketing practitioner should, therefore, be knowledgeable in the organizational markets and the associated behavior. Much of our knowledge in the consumer markets will come handy in our effort to understand the organizational markets.

There are, however, salient considerations peculiar to organizational markets such as:
i) Obtaining goods only for further production, resale, or servicing.

ii) The involvement of more decision makers in times of purchases

iii) Company imposed policies, constraints, and requirements that must be considered

iv) The buying instruments like quotations, proposals, and purchase contracts (Kotler, 1980:170).

We can define the organizational markets as consisting of individuals and organizations that are profit-directed in the purchase of raw materials, goods, and services. This definition allows us to examine the types of buyers in the organizational markets without having a conflict in description.

In our discussion, we shall adopt the producers, marketers’ or sellers’ perspective. In essence, we are studying how the buyers in the markets buy their needs with a view to developing appropriate marketing strategies. Some authors hold the view that organizational markets refer to individuals and organizations that buy goods/services for resale, lease, or further production. Examining the organizational markets from this perspective will create a conflict between the meaning of organizational markets and industrial markets.

For analytical purposes, therefore, it is advisable to look at operators in the organizational markets as those that are profit-directed.

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