The main topic of the text is the exploration of business markets, focusing on B2B transactions, buying processes, market segmentation, and supply chain management. It highlights the differences between business and consumer markets, the complexity of the buying process involving multiple decision-makers, and the strategic role of supply chain management in ensuring production continuity and mitigating risks.
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Business markets involve the sale of goods and services from one business to another, rather than to individual consumers, and are essential for the global economy
The B2B e-commerce market, estimated to be worth USD 14 trillion in 2020, is a significant component of business markets
Business markets differ from consumer markets in terms of the buying process and characteristics of market participants
Business purchases involve a complex and formalized process with multiple decision-makers, such as executives, procurement specialists, and technical experts
Due to the complexity of transactions, businesses often focus on building long-term relationships with suppliers
The business buying process involves assessing the needs of the organization and considering the input of various stakeholders, such as the purchasing manager, finance director, and human resources director
Business markets are characterized by derived demand, where the need for business goods is driven by the demand for consumer products
The price elasticity of demand in business markets tends to be inelastic in the short term, but can vary depending on the price sensitivity of the final consumers
Business markets often have a global dimension, with companies operating across international borders and catering to worldwide demand
B2B market segmentation involves profiling organizations based on attributes such as industry sector, size, and purchasing behavior
Individual buyers within organizations are also profiled based on their decision-making processes
Effective market segments must be substantial, measurable, responsive, and accessible to justify targeted marketing efforts, product development, and customized strategies
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Definition of business markets
Transactions where goods/services are sold from one business to another, not to individual consumers.
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Importance of business markets
Crucial for global economy; provide inputs for production and service delivery in organizations.
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Characteristics of business markets
Smaller customer base, larger transaction volumes, often bulk purchases for operational needs.
