Institutional Markets

The institutional market has of hospitals, schools, nursing homes, prisons, and many other institutions that give goods and services to people in their care. Institutions vary from one another in their sponsors and in their goal. Various institutional markets are characterized by low budgets and captive patrons. For instance, hospital patients contain little choice but to eat whatever food the hospital supplies. A hospital-purchasing agent must decide on the quality of food to purchase for patients. Because the food is provided as a part of entirety service package, the buying objective is not profit. Nor is strict price minimization the goal-patients retaining poor- quality food shall complain to others and damage the hospital's reputation. Therefore, the hospital- purchasing agent has to search for institutional-food vendors whose quality meets or exceeds a sure minimum standard and whose cost is low. Various marketers set up separate divisions to meet the special characteristics and requirement of institutional buyers.