how markets may differ: consumer and industrial markets; local, national and international markets

3.1 The Nature of Marketing – Markets

This unit explains how markets differ, why those differences matter and how they shape a company’s marketing strategy. All points are aligned with the Cambridge IGCSE/A‑Level Business (9609) syllabus.

Learning Objectives

• Define the role of marketing and explain how marketing objectives (e.g., market‑share growth, brand‑awareness, sales‑volume targets) support overall corporate aims.
• Describe the basic demand‑and‑supply model, list the factors that shift each curve and sketch a labelled diagram.
• Distinguish product‑orientation from market‑orientation.
• Calculate and interpret market share and market‑growth rate.
• Compare mass marketing with niche (segment) marketing.
• Identify the four main bases of market segmentation and give examples.
• Explain the purpose, tools, costs and benefits of Customer Relationship Management (CRM).
• Differentiate consumer and industrial (B2B) markets, highlighting key differences.
• Classify markets by geographic scope – local, national and international – and note strategic implications.
• Link market type and geographic scope to the 4 Ps of the marketing mix.

1. Role of Marketing and Its Link to Corporate Objectives

Marketing creates, communicates and delivers value to customers. It does this through marketing objectives such as:

• Increase market share by 5 % per year.
• Raise brand‑awareness to 80 % of the target audience.
• Generate £2 m of new sales revenue.
• Improve customer‑satisfaction scores to “excellent”.

These objectives feed directly into corporate aims:

• Financial objectives – revenue and profit growth.
• Growth objectives – market‑share expansion, new‑product development.
• Strategic objectives – diversification, entering new markets.
• Customer‑focused objectives – loyalty, retention, brand reputation.

2. Demand and Supply

The interaction of demand and supply determines the market price and quantity.

2.1 Factors that shift the curves

2.2 Sketch of a simple demand‑supply diagram

3. Product‑Orientation vs Market‑Orientation

4. Market Share and Market Growth

• Market Share = (Company’s sales ÷ Total market sales) × 100 %
• Market‑Growth Rate = [(Current period market size – Previous period market size) ÷ Previous period market size] × 100 %

High market share signals a strong competitive position; a fast‑growing market signals attractive expansion opportunities.

5. Mass Marketing vs Niche (Segment) Marketing

6. Market Segmentation

Segmentation divides a heterogeneous market into homogeneous groups that can be served more effectively.

• Geographic – region, climate, urban/rural (e.g., winter coats sold in cold regions).
• Demographic – age, gender, income, education (e.g., luxury cars for high‑income adults).
• Psychographic – lifestyle, personality, values (e.g., eco‑friendly products for environmentally‑conscious consumers).
• Behavioural – usage rate, loyalty, benefits sought (e.g., frequent flyers, price‑sensitive shoppers).

7. Customer Relationship Management (CRM)

CRM is a systematic approach to building and maintaining long‑term, mutually beneficial relationships with customers.

• Aims: increase loyalty, improve retention, generate repeat sales, obtain market intelligence.
• Typical tools: customer databases, loyalty cards, email newsletters, personalised offers, after‑sales support.
• Costs: software acquisition, staff training, data collection & analysis.
• Benefits: higher customer lifetime value, word‑of‑mouth promotion, better product‑development insights, competitive advantage.

8. Consumer vs Industrial (B2B) Markets

Key‑differences checklist

• Buyer motive – emotional vs rational.
• DMU size – single vs multiple participants.
• Purchase volume – low‑value/high‑frequency vs high‑value/low‑frequency.
• Product customization – standard vs bespoke.
• Mix focus – promotion/price vs product/service/relationships.

9. Geographic Scope of Markets

The geographic scope determines market size, competition intensity, cultural considerations and logistical requirements.

9.1 Types of market scope

1. Local markets – confined to a city, town or neighbourhood. Example: a boutique coffee shop serving residents within a 5 km radius.
2. National markets – cover an entire country. Example: Tesco operating across the United Kingdom.
3. International markets – operate in two or more countries/regions. Example: Apple selling iPhones worldwide.

9.2 Comparison table

9.3 Progression flowchart (local → national → international)

10. Interplay Between Market Type and Geographic Scope

Both dimensions influence the choice of target segment, the extent of market reach, and the way the marketing mix is adapted.

• A high‑tech industrial‑equipment supplier may start in a national B2B market, then expand to an international B2B market to serve multinational manufacturers.
• A fashion retailer may begin as a local consumer‑focused boutique, grow into a national chain, and finally use e‑commerce to reach international shoppers.

11. Implications for the Marketing Mix (4 Ps)

• Product
  • Consumer markets – focus on style, branding, convenience.
  • Industrial markets – technical specifications, durability, after‑sales service.
  • International markets – localisation (e.g., voltage, packaging, flavours) or standardisation depending on strategy.
• Price
  • Consumer markets – price‑sensitivity, promotional discounts.
  • Industrial markets – total cost of ownership, volume discounts, negotiated contracts.
  • International markets – exchange‑rate fluctuations, tariffs, purchasing‑power parity.
• Place (Distribution)
  • Local – proximity, direct sales, local retailers.
  • National – extensive distribution networks, regional warehouses.
  • International – export agents, joint ventures, wholly‑owned subsidiaries, e‑commerce platforms.
• Promotion
  • Consumer – mass media, social media, celebrity endorsement.
  • Industrial – personal selling, trade shows, technical literature, webinars.
  • International – cultural adaptation of messages or global standard campaigns, use of multilingual media.

12. Quick Revision Checklist

• Define the role of marketing and list at least two marketing objectives that support corporate aims.
• Identify three demand‑side and three supply‑side factors; state how each shifts the curve.
• State whether a firm is product‑ or market‑oriented and explain the strategic implication.
• Calculate market share and market‑growth rate from given data.
• Choose between mass and niche marketing for a given product and justify the choice.
• List the four bases of segmentation and give a real‑world example for each.
• Summarise the aims, tools, costs and benefits of CRM.
• Use the key‑differences checklist to contrast consumer and industrial markets.
• Classify a market as local, national or international and note one strategic implication for each scope.
• Explain how each of the 4 Ps is affected when moving from a national consumer market to an international industrial market.

13. Practice Question

Explain how a company that manufactures office furniture would need to adapt its marketing approach when moving from a national industrial market to an international industrial market.