The Link
Business markets have a derived demand - this means that a demand in business markets exists only because of another demand somewhere in the consumer market. Lets take a few examples :
- The government of India wishes to purchase equipment for a nuclear power plant in Jaitapur, which a business market demand. The underlying consumer demand that has triggered this particular business market demand is that people of India are now consuming more electricity - they have bought more washing machines, microwaves, computers, and re-chargeable electronic devices.
- The demand for restaurant furniture is based on the consumer demand for more restaurants.
Thus business markets do not exist in isolation. Cities or countries with growing consumption are generally growing business markets too.
A single consumer market demand can give rise to hundreds of business market demands. The demand for cars in India creates demands for steel, tires, forgings, castings, and plastic components which in turn create demands for mining, rubber, forging machines, casting sand and polymers. Each of these growing demands has further triggered more demands. Thus as the spending power of citizens increase, the country generally sees an upward wave in its economy.
Read more about this topic: Business Marketing, Business & Consumer Markets
Famous quotes containing the word link:
“This sand seemed to us the connecting link between land and water. It was a kind of water on which you could walk, and you could see the ripple-marks on its surface, produced by the winds, precisely like those at the bottom of a brook or lake. We had read that Mussulmans are permitted by the Koran to perform their ablutions in sand when they cannot get water, a necessary indulgence in Arabia, and we now understand the propriety of this provision.”
—Henry David Thoreau (1817–1862)
“Anthropologists are a connecting link between poets and scientists; though their field-work among primitive peoples has often made them forget the language of science.”
—Robert Graves (1895–1985)