Introduction to

Business/Industrial Marketing
By Tesfahunegn Hailu
 What is Marketing?
• The process of creating, communicating,
delivering goods & services that have value to
customers
• It refers to all the activities a company does to
promote and sell its goods and services.
Consumer Marketing vs Business Marketing

• Consumer marketing is the marketing of goods

& services to ultimate users (individuals users).
• Business marketing is selling and promoting
products to business/organization rather than
individuals.
• Both B2C & B2B are required to have a proper
marketing strategy to be profitable in the
industry they in.
 Business/Industrial Marketing
• It is the marketing of Products and services to
organizations rather than individuals or ultimate users.
• It’s also called business to business marketing (B2B)
• Not for personal consumption rather for industrial uses
• The product and services will be used as a raw material
or aid the process making other commodities.
• There for Industrial marketing is the buying behavior
of business.
 Classification Industrial products
1. Capital Equipment (foundation goods)
a) Major/heavy equipment (installation)
b) Light equipment/accessories
c) Investment/ land, buildings
2. Components parts
a) Standardized Components
b) Custom components (customized equipment)
3. Process/ Manufactured materials
4. Maintenance, repair, and operating (MRO) supplies
5. Raw Materials
6. Business/industrial services (facilitating goods)
 a) Capital Equipment
(foundation goods)
Major/heavy equipment (installation)
– Used in the production process of goods and
services
– Wear out overtime (they need to be maintained or
replaced)
– Examples of major equipment
• Metal cutting machine, generators, cranes, etc.
 Marketing Implication of
Heavy equipment
• They exhibit inelastic demand (demand for goods and
services does change as much as the price change.)
• Requires close cooperation between buyers and sellers.
• Negotiation often take many months.
• Top management from both companies sit and negotiate
to come to an agreement.
• Usually involves direct distribution.
• Demands significant financial expenditure. Marketers
provide
• Credit to buyers, assist the purchaser in securing funds/loans, or
offer leasing agreement.
 b) Light equipment/ accessories

• Used to facilitate production, administration

or marketing activities
– Examples computers, printers, office furniture,
drills etc.
• Not considered fixed pant.
• Less expensive comparing to heavy equipment
Marketing Implication of Light Equipment

• Exhibit elastic demand (demand changes with

change in price).
• Involves routine selling and negotiations
• High demand & horizontal market
• Distributors are used
 c) Investment (Land, building, company’s
property )
• These are real state property of a company. It
includes the firm’s offices, plants, warehouses
housing, parking lots, etc.
 2) Component Parts
These are manufactured items, subassemblies or
completely assembled units that are incorporated
into the buyer’s final product (automobile tires,
motors, batteries, etc.)
– Standard components: conform to industry accepted
dimensions and performance specifications. (batteries,
tires, and headlights)
– Custom components: are designed to the exact
specifications of the buyer.
– OEM: Original Equipment Manufactured. Note: Toyota does
not produces all the parts to make its cars.
 Marketing Implication
• For customized items, very close interaction is
needed between both buyers and sellers.
• Standardized items are normally bought through
the purchasing department of the buying firm on
the basis of the product specifications developed by
the engineering and production
• Most components have OEM segments and After-
market (replacement market) segments.
– The aftermarket is quite profitable market. Due to the
need for replacement parts.