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What Are the Differences Between the Organizational and Consumer Markets?

by Alexis Writing; Reviewed by Michelle Seidel, B.Sc., LL.B., MBA; Updated March 27, 2019

What Are the Differences Between the Organizational and Consumer Markets?

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Both individuals and organizations need to purchase items to accomplish their daily tasks. There is a large difference, however, in how and why an organization purchases goods and services versus how an individual shops. Understanding these differences is important if you want to tap into both an organizational and a consumer market.

Why Goods are Purchased

Organizations purchase goods to use in their ongoing operations and to resell to consumers, while consumers purchase goods for their personal use. Organizations also purchase more raw materials – such as wood, steel and other items used in manufacturing – than individuals who don’t have the tools or knowledge to put those raw materials to use as a product. Organizations generally purchase goods in larger volumes than individuals, and are driven by customer demand and need for manufacturing materials.

Consumers, on the other hand, are driven both by need and by want. It is possible to entice a consumer to purchase something he does not need through effective marketing or peer pressure, but it is much harder to entice an organization to buy an unnecessary product, especially when dealing with a purchasing department that is accountable for what it spends.