What is an Institutional Market?

Malcolm Tatum

An institutional market is a consumer market composed of large buyers who tend to purchase in volume quantities. Several different types of organizations may be involved in a given institutional market, including educational institutions, businesses, and non-profit organizations. In most instances, the purchases are made in order to allow the organization to in turn provide services and goods to the individuals they serve.

Most hospitals place regular bulk orders for items such as bed pads.
Most hospitals place regular bulk orders for items such as bed pads.

One example of an institutional market buyer is the house of worship. Local congregations of different faiths often purchase materials for printing orders of worship, newsletters and other printed items as part of their ongoing ministry to members and visitors. It is not unusual for a house of worship to also order furnishings such as pews or other forms of seating in volume amounts. Larger houses of worship will often purchase food, paper plates, plastic utensils, and other items that can be used during social events held at the facility.

Hospitals are a type of buyer that is common to the institutional market.
Hospitals are a type of buyer that is common to the institutional market.

Hotels are another participants in the institutional market. Whether a stand-alone business or part of a larger chain, the hotel will often order textiles in bulk. Items such as bed sheets, spreads, towels, and similar products are often ordered in larger quantities in order to gain a discount off the retail price. Hotels that also operate restaurants will also often order institutionally prepared foods that can be used to provide tasty meals available in the restaurant or by way of room service.

Another type of buyer that is common to the institutional market is the hospital. Healthcare facilities of this type purchase not only bedding and food in bulk, but may also purchase equipment for use in various parts of the facility. Beds and hardware for use in patient rooms are a couple of examples. X-ray equipment, tools for surgery, and disposable masks, gloves, and other items that are crucial to providing quality healthcare are also sold via this type of marketplace.

Colleges and universities also are consumers in an institutional market. Purchases such as textbooks, computers, seating for classrooms, and various teaching aids are just a few of the items that buyers of this type will purchase on an ongoing basis. As with other larger buyers, universities often purchase in bulk as a way of obtaining a discount and thus stretching the institutional budget a little further.

In many cases, the priority of a buyer in an institutional market is not to earn a profit. Instead, the focus is on obtaining the highest quality of goods and services possible, while keeping costs in line with the current operating budget. This allows the buyer to offer quality services and support to clients, which in turn allows them to continue operating over the long term.

Hotels often order bed linens in bulk.
Hotels often order bed linens in bulk.

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