There are millions of organizations worldwide selling their products and services to other businesses. They operate in many industries and range in size from huge multinational companies with thousands of employees to one-person small businesses. With such a large number of organizations and industries contained within the business market, a marketer can obtain a better picture of who is involved by looking at popular business classification systems set up by international governments, such as the North American Industrial Classification System (NAICS), which covers Canada, Mexico and the United States and the International Standard Industrial Classification (ISIC), which is widely used in Europe. These reports provide descriptions of hundreds of industry classifications. For instance, the table below shows how US operators of “Golf Pro Shops” are listed in the NAICS coding system. Note the numeric sequence that occurs as one “drills down” in order to locate individual industry groups.
|Subsector||451||Sporting Goods, Hobby, Book, and Music Stores|
|Industry Group||4511||Sporting Goods, Hobby, and Musical Instrument Stores|
|Industry||45111||Sporting Goods Stores|
|US Industry||451110||Golf Pro Shops|
Once industry codes are known these can be used within various government and industry research reports to locate specific industry information such as number of firms operating in the industry, total industry sales, number of employees and more.
For the purposes of this tutorial, however, we will use a broader approach to categorizing businesses choosing to categorize based on the general business function an organization performs rather then by industry. We break the business market down into two broad categories – Supply Chain Members and Business User Markets.