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Concept Version 6
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Alternative Arrangements

Business-to-government, consumer-to-consumer, and institutional markets are additional types of marketing channels.

Learning Objective

  • Outline the characteristics of business-to-government, consumer-to-consumer, and institutional marketing channels


Key Points

    • Business-to-government marketing encompasses marketing products and services to various levels of the government, such as federal, state, and local.
    • Consumer-to-consumer commerce is the completion of transactions between private individuals or consumers.
    • Institutional market consumers are often nonprofit organizations and are not motivated primarily by profits or market share.

Terms

  • nonprofit

    An organization that exists for reasons other than to make a profit, such as a charitable, educational, or service organization.

  • Request for Proposal

    A formal publicly released document outlining a need and inviting businesses to submit plans to fulfill that need.


Full Text

The most common marketing channels are business-to-consumer (B2C) and business-to-business (B2B). However, there are also alternative channels that should be discussed. These include business-to-government, consumer-to-consumer, and institutional markets.

Business-to-government (B2G)

Business-to-government marketing encompasses marketing products and services to various levels of the government, such as federal, state, and local . This is also known as "public sector marketing" and is somewhat similar to business-to-business transactions. However, there usually many more restrictions and strict processes in order to gain government contracts. Usually, government organizations post a request for proposal, and businesses respond to them. Most often, the bid with the lowest cost is accepted.

United States Capitol

B2G transactions involve working with government entities.

Consumer-to-consumer

Consumer-to-consumer commerce is the completion of transactions between private individuals or consumers. The increased use of consumer-to-consumer transactions can be directly related to the growth of electronic, online marketplaces. Craigslist and eBay usually involve consumer-to-consumer transactions. There are also older forms of consumer-to-consumer transactions, such as classified ads and garage sales . Often, these types of transactions are for a lower cost than if they were conducted through a business, as there is some added risk that the product will be defective or otherwise be not as expected.

Garage Sale

Garage sales are one type of consumer-to-consumer business.

Institutional Markets

Institutional markets are very similar to typical business-to-business markets. However, many institutional markets are considered nonprofits, such as churches . Institutional markets differ from typical businesses in that they are not motivated primarily by profits or market share. Rather, institutions tend to satisfy somewhat esoteric, often intangible, needs. Also, whatever profits exist after all expenses are paid are normally put back into the institution. Marketers must be aware that these institutions have different goals and restrictions than normal businesses.

Church

Churches, schools, and hospitals are some examples of institutional market consumers.

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