market

There are different features of institutional customers but only some of them are discussed below.
1. Few in number 2. Purpose of buying 3. Complex buying structure 4. Budgetary constraint 5. well informed 6. Derived Demand 7. Direct purchase from producers
Institutional customers are few in number but they buy large quantities to supply the goods to the large number of customers of different localities. They purchase the goods for the processing, for the further production, fro organizational use and for reselling purpose, etc. The requirements may vary, for example producers purchase the raw materials for productions or processing. Similarly, offices purchase the goods for official uses while for relatives, to sell the goods to the ultimate consumers. Buying structure of the customer is more complex than non-institutional customers. They should take the permission from the top level management and also discuss in different level purchase under the certain terms and conditions. Intitutional customers have budgetary constraints. Budget is allocated to each product and amount can be spent under the provisions of budget. There is no authority to purchase the excess goods. They should take the permission to purchase such excess goods. Institutional customers are well informed about the product feature, quality, durability, price etc. Before purchasing the goods, they compare and access the relative merits and demerits of goods from different angles and finally they purchase the goods.
The demand of institutional customers depend on the demand of ultimate consumers. It is known as derived demand. In accordance with the demand of different customers, their demand will be created. So, the demand of these customers is derived from the demand of ultimate consumers. Institutional customers do not buy directly from the producers. They are the institutional customers who purchase the goods to supply the different customers. They need large quantities of products which are possible only from the producers.