What indicates buyer power in market analysis?

Buyer power in market analysis refers to the influence that customers have on the pricing and terms of sale for products and services. When buyers possess significant negotiating power, they can push for lower prices, better quality, and improved service offerings due to their ability to switch suppliers or seek alternatives.

The ability to negotiate price is a direct reflection of this power, as it indicates that buyers can effectively influence the cost of goods and services they purchase. When buyers have strong negotiating power, they can demand concessions which can affect a supplier's profitability, product offerings, and overall market dynamics. This power often arises from factors such as the availability of substitutes, the concentration of buyers versus suppliers in the market, and the importance of the buyer to the supplier's business.

In contrast, the other choices focus on different aspects of the buyer-supplier relationship or product characteristics. The ability to set quality standards pertains more to supplier capabilities than buyer power. Characteristics of product features relate to product differentiation and market competition rather than direct buyer influence. Customer service provided can enhance customer satisfaction but does not inherently signify buyer power in negotiation terms.