Organizational market is the sum of the demand for enterprise products and services formed by various organizations. It has the following characteristics.
1. Scale and complexity of organizational market
Usually, the number of customers in organizational market is less than that in consumer market, and the scale and value of each customer’s purchase transaction are relatively large. Organizational market is much larger and more complex than consumer market in terms of total transaction volume, number of parties in each transaction, scale and diversity of customer business activities, number and duration of production stages, etc. In addition, the number of organizational markets is not limited by the number of downstream consumer markets, because some organizations do not participate in any consumer market.
Some organizations (such as charities, churches, societies, etc.) provide services to consumers without directly charging fees, while some other organizations (such as the military) do not see the role of consumers at all.
2. Characteristics of organizational market demand
Organizational market provides products to consumer market through a series of value-added stages, so the demand for final consumption is the ultimate force that triggers the supply of organizational market. The demand of organizational market is derived from a series of demands in each value-added stage from organizational market to consumer market.
For example, the demand for paper in the publishing house market depends on the demand for books and magazines. If the demand for final consumer goods is weak, then the demand for all the products of the enterprises used to produce these consumer goods will also decline. Suppliers in the organizational market must pay close attention to the purchase types of final consumers and the various environmental factors that affect them.
Three, the characteristics of organizational market purchases
Because the organizational market has the characteristics of a small number of buyers and a large purchase scale, there are usually more people who influence organizational purchasing decisions compared with the consumer market. Most organizations have a special purchasing committee composed of technical experts, senior managers and some related personnel. Especially when purchasing important commodities, decisions are often made jointly by members of the purchasing committee.
Organizational buyers usually purchase products directly from manufacturers, and those technically complex and expensive projects without going through middlemen are even more so. At the same time, because organizational market buyers are in a strong position in negotiations, they can make sellers make concessions and buy their products in return. In some cases, buyers require sellers to buy their products in return to ensure the security of orders.
For suppliers, large customers are generally very important. They should try to establish long-term and close relationships with them. Sometimes they need a marketing team dedicated to serving large customers in order to win and maintain continuous orders: marketing personnel of supply companies should hire some well-trained sales representatives and sales teams with professional knowledge and interpersonal skills, and deal with professionally trained purchasing personnel with rich professional knowledge.