Free Essay

Major Markets

In: Business and Management

Submitted By mguenther
Words 1067
Pages 5
Major Markets
American Public University System Charles Town, WV

Abstract
Companies large and small have the same questions when considering global marketing. What location is most beneficial to the company? Will the products we offer need require alteration or presented in a different way to appeal to the target country’s culture? What are the laws or rules of that particular government? Is this a profitable market for our company? These questions are answered through identifying the three major foreign markets. Understanding the individual consumer markets, industrial markets and government markets will give a solid understanding of global business.

Analysis of the major markets.
The major markets within all Foreign Markets
Consumer markets are products and services for the consumer. They make up about fifty percent of the gross domestic products (Gaspar, 2013). Consumer markets are divided into categories. Consumer products, food and beverages, retail such as clothing and transportation. Consumers are purchasing products and services for their individual use. They are not companies that are purchasing product to sell to people. This is important because as history has proven cultures change. Typically styles and trends tend to last a while before they move on to the newest fad. This is particularly important as the producers in consumer markets will be affected by this ever changing industry. The aesthetics and appeal to the consumer is of utmost priority in order to get the product to sell.
The industrial market consist of businesses that sales products and materials to other businesses for further processing or resale. These are basically business selling to other businesses. Sometimes this market is referred to as a business market. In this market you have business buying specific products. Therefore, you will not have as large of a customer base as in the consumer market. Industrial markets sell products like equipment, machinery and services such as a cleaning service. These products are more specialized and appeal to the particular needs of certain businesses. The buyers in the industrial market are very educated and informed on the specific products they are looking to buy and sell. They often require very specific information about the products prior to purchasing. Size, weight, price and services all play a large part in the consideration of a purchase in the industrial market.
Government markets are similar to industrial markets as they are businesses purchasing products and services from other businesses. The difference here is that the different sections of government purchase goods and services from the private sector. This includes many things such as military operations, healthcare and projects like roads and bridges (Gaspar, 2013). The government markets also have to go through a different purchasing process. This process is called government procurement. This process is different for different types of government but usually entails a bid, contract awarding and much involvement from the government throughout the entire project or contract is complete. The system of procurement is in place to protect the taxpayer’s money. The government is responsible to produce and maintain things such as roads and bridges. The country expects this to be done at the best cost with the best quality. Government procurement allows this to be done.

Specific examples of each major market
Consumer markets, as discussed above, are goods that consumers purchase for their consumption. There are different kinds of consumer goods. Fast Moving Consumer Goods or FMCG are products that are one of the largest industries in the world. They are goods that are used quickly and regularly. They are said to have a short shelf life because they will not sit on a shelf for a long period of time before being consumed. These items are relatively inexpensive to the consumer and the goal for the company is to sell a lot of that item or a large volume. This is how the company makes money on the product. In Africa food is the main source of spending (KPMG, 2014). This is a consumer market. The African consumer tends to buy more food than anything else and use it up quickly,thus repeating the cycle. The quality of food is not the focus in this culture but rather the quantity. The food companies will want to sell a food item such as rice very inexpensively, but sell lots of it. This is the way that both company and consumer benefit from this market.
Industrial markets or business to business markets are buying goods to resale. This is a more intense process, as it usually involves very specific needs and expectations. Industrial markets, such as CSX transportation sells training services to other railroads or companies. The services will be sent to the company interested as a proposal and a contract for services signed. CSX transportation benefits by making money on providing a service. The smaller railroad or company benefits from the knowledge they receive form the training thus making their potential income earnings greater.
A government market is purchasing products with taxpayer money to better serve the tax payers themselves. For example, every pay period an employee has taxes taken out of their check, in turn, the collected money is used to repair roads and bridges damaged by weather or accident. The government will accept bids from private contract companies to complete the work. The job details are very specific and closely monitored by the government officials throughout the process. The process is designed to keep the taxpayers informed and offer feeling of trust that their money is used properly. It also holds the business that is doing the work to a high standard ensuring the highest quality of work.

Conclusion
Consumer, industrial and government markets are all present in foreign markets. Each market is unique in the way that it conducts business and whom it conducts business with. Companies that are currently operating in foreign markets and local markets alike will encounter each of these markets. They are all necessary to have a properly functioning society.

References

Gaspar, J. E., Arreola-Risa, A., Bierman, L., Hise, R. T., Kolari, J. W., Murphy, L. (01/2013). Introduction to Global Business: Understanding the International Environment & Global Business Functions, 1e, 1st Edition. [VitalSource Bookshelf Online]. Retrieved from https://bookshelf.vitalsource.com/#/books/9781285528519/

K. (2014). Sector Report Fast Moving Consumer Goods in Africa. Retrieved from https://www.kpmg.com/Africa/en/IssuesAndInsights/Articles-Publications/General-Industries-Publications/Documents/Fast-moving Consumer Goods in Africa.pdf

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