Business Marketing - Business & Consumer Markets - The Link

The Link

Business markets have a derived demand - this means that a demand in business markets exists only because of another demand somewhere in the consumer market. Lets take a few examples :

  • The government of India wishes to purchase equipment for a nuclear power plant in Jaitapur, which a business market demand. The underlying consumer demand that has triggered this particular business market demand is that people of India are now consuming more electricity - they have bought more washing machines, microwaves, computers, and re-chargeable electronic devices.
  • The demand for restaurant furniture is based on the consumer demand for more restaurants.

Thus business markets do not exist in isolation. Cities or countries with growing consumption are generally growing business markets too.

A single consumer market demand can give rise to hundreds of business market demands. The demand for cars in India creates demands for steel, tires, forgings, castings, and plastic components which in turn create demands for mining, rubber, forging machines, casting sand and polymers. Each of these growing demands has further triggered more demands. Thus as the spending power of citizens increase, the country generally sees an upward wave in its economy.

Read more about this topic:  Business Marketing, Business & Consumer Markets

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Famous quotes containing the word link:

    All successful men have agreed in one thing,—they were causationists. They believed that things went not by luck, but by law; that there was not a weak or a cracked link in the chain that joins the first and last of things.
    Ralph Waldo Emerson (1803–1882)

    Before I had my first child, I never really looked forward in anticipation to the future. As I watched my son grow and learn, I began to imagine the world this generation of children would live in. I thought of the children they would have, and of their children. I felt connected to life both before my time and beyond it. Children are our link to future generations that we will never see.
    Louise Hart (20th century)