Lesson 7.3: Business Customers

Introduction

Topic: Business Customers
Unit 7, Consumer Behavior
Bonus unit for foundational concepts
Focus: Two main topics
- Five types of business customers
- Three ways to segment the business market

Producers
- Buy raw materials and equipment
- Produce products/components
- Example: Textile mill buying wool to make socks
Resellers
- Buy finished goods and resell
- Examples: Wholesalers, retail stores
- Important: May require distribution and warehousing services
Service Businesses
- Provide services to consumers or businesses
- Examples: Accounting firms, electric companies
Government Market
- Local, state, national government offices
- Require various products and services
- Example: Buying finished wool for military uniforms
Institutions
- Private/public nonprofit organizations
- Examples: Schools, museums, charities

Business Type
- Different types need different products
- Example: Financial institutions need ATMs
- Tool: North American Industry Classification System (NAICS) for identifying segments
Customer Size and Location
- Larger vs. smaller business needs
- Example: Schools needing affordable computers; Google’s Chromebooks
- Factors: Annual sales, employees, customers
- Location: Local vs. global market focus
Product Use
- Different customers use products differently
- Example: Steel for lockers, trucks, airplanes

To Make New Products
- Example: Raw steel for making school lockers
To Resell to Customers
- Businesses buying finished products to resell
- Example: Companies distributing steel lockers
To Operate the Business
- Need for office supplies, machinery