4 types of business markets

This article is for the business market and marketing professionals who know how to create and manage a successful presence on social media platforms. The four types of markets are explained in further detail in this comprehensive post. We will go through each type, and then show you the best strategies to implement depending on your goals, objectives and resources.



What Are The Four Types Of Market?

The four primary divisions of every business marketing strategy are called B2B and B2C or Business-to Business and Business-to Customer segments.



B2B Marketing – B2B refers to businesses that sell their products or services directly to consumers, such as retailers, distributors or wholesalers. These brands typically have a direct relationship with the end consumer at different stages of the product/service lifecycle. Examples of well known B2B companies include Amazon, Google, Netflix, Hulu & HBO as well as large retailers like Target and Walmart.

B2C Marketing – B2C marketers are those which sell specific goods to individual customers such as home improvement stores and furniture retailers. They may be indirect sellers like department store owners, online retailers (such as eBay or Craigslist) and specialty retailers (such as big box retail). Example of well known B2C brands include Wal-Mart and Dollar General.

B2C vs B2B – Which One Is Best?

While they serve entirely different purposes, both B2B and B2C segments have one thing in common – the potential for growth is unlimited. Even small companies can make a difference by growing into either one. For instance, an ecommerce retailer may decide to focus exclusively on selling specific items to its clients over time as it grows. While these sales may not increase in value immediately, years later when the company has more products on shelves and greater stability, the initial investment may pay off, leading to exponential growth. On the other hand, while some traditional storefronts like Bed Bath & Beyond offer high margins for existing shops, others have higher startup costs and thus can struggle financially until they outgrow their current model. Although both models do have advantages and disadvantages associated with them, choosing between the two should not be based solely on price. A significant element of determining the right strategy to use is the ability to build up long term relationships with both ends of the customer spectrum. To help you determine which model best fits within your needs, we’ve outlined below a few options for success.

Choosing Between B2B And B2C Strategies

As discussed above, there are several factors to take into consideration before making any decision. Some of the most important factors are the cost of entry, scalability, return on investment and the level of market penetration. Let’s explore each of these in more depth.

Cost of Entry

It is important to determine what type of revenue stream the company wants to pursue first before deciding which model to follow. It is possible to start with a B2C business where lower marketing budgets and less inventory may be required to meet short term objectives. In this case, all the capital and resources could be invested into building brand awareness, website development, creating content and launching campaigns and promotions. However, if you want to expand into B2B operations, having significant amount of revenue already built and ready to reinvest in future growth plans could provide a good starting point. By focusing primarily on generating recurring revenue streams, the business is able to save money in today’s high cost environment. Conversely, this reduces opportunities to invest in branding initiatives and new product development and increases chances of failure. So the optimal decision will depend on the overall goal of the firm and how much resources it allocates for expansion.

Scalability And Return on Investment

As mentioned earlier, there are many ways in which to generate profits from the sale of products or services, including advertising. An important factor to consider however is whether the market can sustain and grow. There are certain areas of the global economy that generate steady demand for products and services, but the same cannot be said about industries like hospitality, manufacturing and IT. As a result, scaling a business is critical and requires additional capital and effort. Meanwhile, investing in building robust supply chain networks and implementing efficient processes to reduce operating costs are also essential to ensure smooth flow of revenue.

Return on Investment (ROI)

When choosing the approach of your business, be sure to calculate the ROI from both sides of the equation and compare the overall results against the cost and risk factors involved for each model. Each business model presents different return rates, so make sure that you weigh up each option before choosing one. Ultimately, the bottom line should always be more money.

Market Penetration

It is important to understand how fast you can scale a business and where you need to invest to reach a sustainable profit margin. Building customer base is often difficult to achieve especially when dealing with niche markets, so it is important to try to establish yourself as quickly as possible. Once you attract enough interest, you can begin expanding into new geographic locations and introduce new products to existing ones. Eventually, you can even target new markets to broaden the range of your offerings and gain customer loyalty. Again, this depends on the type of company and your strategic objectives. Regardless of which model you choose, remember that profitability comes down to achieving your core business goals and taking advantage of various available resources.

Convenience, Flexibility & Scalability

Both B2B and B2C marketing channels rely heavily on technology infrastructure. Depending on how complex you want to become as a business, you will likely be required to purchase special equipment and software tools to facilitate both marketing and operational functions. At times however you may find that specialized hardware and software is unavailable or prohibitively expensive. That said, these investments should be considered once you can justify their benefits during the budget planning stage. Otherwise, both B2B and B2C models can quickly prove to be too costly and inflexible. Both strategies require substantial investment upfront and are usually only viable for medium to longer term scenarios. Finally, although both models provide flexibility, B2B and B2C marketing tend to lack scalability in terms of operations and operations complexity. If you plan to open multiple stores across multiple countries or operate a network of stores, one of each model will work better than another.


In conclusion, B2B and B2C are simply different variations of the four general categories of marketing strategies that aim to generate revenues without compromising on quality, integrity and overall speed of operation. Companies must carefully weigh which model they wish to adopt given their unique circumstances.