CONSUMER MARKETS: CHARACTERISTICS, TYPES AND EXAMPLES - ECONOMY - 2025

Consumer markets are markets dominated by products and services designed for the everyday consumer. They are generally divided into four main categories: consumer products, food and beverage products, retail products, and transportation products.

A consumer market is a market that consists of domestic consumers who buy goods for their individual or family consumption. It is different from a business market, in which companies sell goods and services to other companies.

Source: pixabay.com

Industries in consumer markets often have to deal with changing brand loyalty and uncertainty about the future popularity of products and services.

A consumer market is the same system that allows us to buy products and services. These items can be used for personal use or to be shared with others.

Every time you buy a product or service, you are participating in the consumer market. Whether you are picking up groceries for the week or paying to wash your car, you are becoming part of this larger system.

Marketing and consumers

In a consumer market, marketing plays a critical role in educating people about what purchasing options are available. As a result, it is vital that companies educate potential customers about their products and encourage them to buy them.

This fosters a more diverse and vibrant free market system, providing the opportunity to move variety and options.

Because consumers have power and can make their own decisions about how they will spend their money and how they will use the products they buy, they also have more options to choose from.

The more people out there and actively buy products, the more active the consumer market will be.

Due to the different characteristics that can distinguish certain consumers from others, not all consumers are the same in terms of their tastes, preferences and shopping habits.

characteristics

These are the characteristics of the industrial and consumer markets. Characteristics refer to the different and similar qualities that make up the two markets.

Market population

The market population, or buyers, in the consumer market is relatively larger than that in the industrial market.

This is because the industrial market is characterized by having fewer organizations dedicated to the production or sale of goods or services, while the consumer market is the individuals, of a larger population, who buy goods and services for their personal consumption.

Shopping size

Industrial buyers buy in very large quantities, since they use it for sales or production, while consumers buy in small quantities, since their main objective is personal or family consumption.

Purchasing process

For the industrial market, the buying process is quite complicated, since people who make purchases often require authorization from certain management groups before making any purchasing decision.

The industrial market appears to be more strategic and systematic, when compared to the consumer market. Consumer markets present a very simplified acquisition process, because the influences are not so complex.

Relationship level

In the consumer market, the relationship often ends with a remote transaction made through a retailer. The manufacturer rarely makes personal contact with the consumer.

In industrial marketing, buyer-seller proximity is high. In most cases, the supplier visits the customer in person and establishes a true personal relationship with the customer over an extended period of time.

Payment structure

Industrial markets employ a more complex payment structure, where a company places an order and takes care of delivery through logistical procedures.

After delivery, the seller sends an invoice to the buyer, with which the buying company can make a payment for the delivered goods, according to the agreed payment terms.

In the consumer market, customers choose their product of interest and then pay for it with cash, credit card or checks.

Promotion

In the business market, companies do not involve media advertising to market their products and services. Instead, they use more formal channels such as magazines, newspapers, and direct emails to interested companies.

Advertising in the media is generally a large part of the promotional strategy companies use to market their products in consumer markets.

Types

Consumer markets are defined by the buyers within them. Companies can adapt their products and services to different types of macro consumer markets.

Business to Business (B2B)

B2B (Business-To-Business) is a business model that facilitates business transactions from one company to another. For example, an engineering equipment manufacturer company that supplies this equipment to a construction company.

Business-to-business sales are about getting larger orders from fewer customers, requiring more of personal interaction, rather than advertising and promotions.

Industrial sale

It consists of companies that transact durable goods such as machinery, raw materials, chemicals, furniture, and office supplies.

Sellers or suppliers must be experts in their product or service, and the market in general. An advisory sales approach is often used with clients, helping them solve problems or meet specific goals.

Professional services

It consists of providing consulting or meeting business needs, such as marketing, information technology, human resources, management consulting, and payroll.

Financial services

These services include: banking, insurance, business credit and loan, tax planning, investment, and asset management.

Financial services professionals are often highly trained, certified, and licensed. They must follow specific regulations.

Business to Consumer (B2C)

B2C (Business-To-Consumer) is a model in which retailers sell directly to end consumers. The retail market is made up of supermarkets, department stores, food chains, specialty stores, and franchises.

This type of market generates low profit margins, but has high growth potential. If customers receive enough value for their money, only then will they be loyal to the brands and make repeat purchases.

Consumer Products Market

Aggressive marketing is required in the consumer products market, because customers in this market lack loyalty and tend to switch from one brand to another very quickly.

It is characterized by a high level of competition among sellers. Companies are continually engaged in modifying their business models and business activities to adapt to the changing needs of consumers.

Food and beverage market

This market consists of dairy, bakery, packaged food products, beverages, confectionery, beer, spirits, meat, and poultry products. This type of consumer market is full of growth opportunities.

Due to the lifestyle changes of the current era, consumer awareness and customer brand loyalty help this market to grow to a different level.

Transportation services market

It consists of postal services, courier services and logistics services. Companies in this type of market essentially require a brand name, a strong distribution network, and a significant amount of capital investment.

With the emergence of advanced technologies, such as electronic commerce and the growing use of the Internet, new horizons are opening for this type of market.

Consumer market segmentation

The consumer market is dissected by sellers, segmenting the most fruitful purchasing groups for each particular product.

Demographic segmentation

Divide markets into groups based on variables such as age, gender, family size, income, occupation, education, religion, ethnicity, nationality, and social class.

Demographic factors are easier to measure than most other types of variables. Most of these demographic categories are defined by a certain range.

Age

It is one of the most common demographic variables used to segment markets. Some companies offer different products or use different marketing approaches for different age groups.

Gender

Gender segmentation is used, for example, in clothing, cosmetics and magazines.

Income

Income is used to divide markets because it influences people's purchase of products. It affects the purchasing power and lifestyle of the consumer.

Social class

The social class can be divided into upper, middle and lower class. Many companies are dedicated to clothing, home furnishings, leisure activities, designer products and services for specific social classes.

Geographical segmentation

It refers to dividing a market into different geographic units, such as nations, states, regions, cities, or neighborhoods.

Geographic variables such as climate, natural resources, and population density influence the needs for consumer products from one region to another.

For example, companies that sell beachwear will likely sell more products in warmer climates.

Psychographic segmentation

In the case of certain products, the buying behavior depends mainly on the characteristics of lifestyle and personality.

Personality characteristics

It refers to the individual character traits, attitudes and habits of a person. It is used when a product is similar to many competitive products, and the needs of consumers are not affected by other segmentation variables.

Lifestyle

Lifestyle analysis provides a broad view of consumers by segmenting markets into groups based on activities, interests, beliefs, and opinions.

Behavioral segmentation

Companies like to know how often their consumers visit their restaurants, stores, or use their products.

User status

Markets are sometimes segmented based on user status, that is, based on: non-user, ex-user, potential user, first-time user, and regular user of the product.

Usage rate

The markets can be distinguished according to the usage rate, based on light, medium and heavy users.

Heavy users are usually a small percentage of the market, but they represent a high percentage of total consumption.

Loyalty status

- Totally loyal: consumers who buy the same brand all the time.

- Loyal: consumers who are loyal to two or three brands.

- Unloyal: consumers who change from one brand to another.

- Switchers: consumers who do not show loyalty to any brand.

Real examples

The largest market

The consumer market in the United States is comprised of a force of approximately 300 million consumers. The United States has the largest consumer market in the world. Consumers spend more money in that country than in any other country.

Because this market is so large, it helps to divide it into more manageable segments.

Gender

Gender is the most basic demographic descriptor of a consumer market. Sanitary napkin marketers know that their consumer market will be 100% female.

However, condom marketers know that while men will be their dominant user base, women are also an important buying group.

Age

Age is the second most important descriptor of a group of consumer purchases and affects who and what is purchased. Children use the toys, but parents and grandparents buy them.

However, the toys are marketed to children, who then make their primary buyers aware of their desire to own the toy. America's toy market is a $ 20 billion business.

According to Ecommerce-Guide.com, 41% of toys bought online are from women, while only 29% of men buy toys online.

Therefore, toy manufacturers are more likely to target women, unless the toy is more closely related to more stereotypically masculine activities, such as contact sports or race cars.

Older adults

Gray hair dye is most often purchased by women 45 and older. Marketers will consider this fact when developing advertising programs to reach those consumers.

Middle-aged men naturally don't feel as manly as they did in their younger days and will become the consuming market for flashy fast cars, sports treatments, and baldness.

Automakers will advertise on the Golf channel or on ESPN to reach these male consumer markets, characterized by demographic (age) and psychographic (virility) factors.

Geography

Geography is also an important factor influencing consumer markets. Cowboy boots and hats are big sellers in Austin, Texas, but they are sold only tangentially in Albany, New York.

Income

Revenue is another way to segment a buying group of consumers. The number of people in the market for a new $ 300,000 Ferrari is far less than the potential consumer market for a new $ 30,000 Ford.

References

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