INDUSTRIAL MARKETING

Introduction

With the growth of business and industry both, the scope of higher production, higher revenues and higher trading has increased. This has affected:

The lifestyle of the people

Their behaviour Likes & dislikes Ability and intelligence to judge and get product information Develop technology and innovations by the producers This has lead to a challenging job for sellers.

INDUSTRIAL MARKETING

Introduction

The question as to why do we need to study B2B marketing It is simply that before selling of consumer products (including consumer durable products) or for that matter any product, these first need to be produced And to produce these goods, what you need are; Plant & Machinery and other accessories Raw Materials

Parts and Components for production or maintenance

Consumables Oils, fuels, Packing Materials and others Services and systems legal, professional, IT systems, payrolls and other outsourced services

The B2B or Industrial marketing is therefore key marketing activity where the required skills are slightly different than the consumer product selling.

Introduction While the basic Ps of marketing apply to consumer and industrial products both, the challenge in Industrial selling is higher In consumer product selling, you are not facing the consumer directly while in industrial selling it is direct Not only with the buyers (the front line people) but also with the users as well as the influencers or the deciders Commercial enterprises; 1. Industrial distributors and dealers 2. Original equipment manufacturers 3. Users plants & machineries used by an enterprise for the production of certain goods or services (e.g. lathe machine by a workshop, computers and typewriters for facilitating of production etc)

The industrial market is composed of;

Introduction

4. Overlap of categories a plant manufacturer may buy certain assemblies, motors, small machines like cutting, welding etc not for servicing but for production of further goods Government agencies / organisations Institutions such as institutes, an organisation or an association, schools/colleges, hospitals, NGOs etc

The seller therefore needs to keep his eyes open and look for opportunities
These days due to globalisation of business all companies are looking for cost savings and therefore giving higher opportunities The governments are also looking for increasing foreign earnings and therefore it gives more opportunity for sellers

INDUSTRIAL MARKETING

Introduction

The industrial products are classified as under; Materials and parts; The raw materials, which are further processed like, sponge iron, iron ore, plastic granules, etc or an assembly of gear box, components like handles, headlamps etc Capital items; The items which are used for production, last a few years due to depreciation and may be replaced over a period of time, due to wear and tear or obsolescence of technology Supplies and services; 1. Supplies such as soaps, cleaning cloth, papers, clips, printing stores, oils etc 2. Services such as AMCs for maintenance of plant and machines, computers, house maintenance, security and house job contracts, canteen services etc

Introduction

Difference between Industrial and Consumer marketing

Industrial Markets Markets
Geographically concentrated Fewer buyers Oligopolistic competition Technical Complexity Normally (but not necessarily) Customised Service like after sales, technical support, timely delivery, continuous up-gradation of product & technology required

Consumer Markets
Dispersed or large market Mass market (large numbers) Monopolistic competition Less complex Standardised product Less important due to large number of buyers and large replaceable / alternate products available

Products

Buyers behaviour

Functional involvement Rational and task motives predominate Technical expertise Long term stable relations/Interpersonal relationship/Reciprocity

Family involvement Social / personal & psychological motives predominate Less technical expertise Non personal relationships

Introduction

Industrial Markets Decision Making

Distinct as observable

Consumer Markets
Mental stages and un-observable

Channels of Distribution Promotions

Shorter Mostly direct selling More emphasis on personal selling List prices of certain standard products Competitive bidding Negotiations on most purchases and therefore more pressure on seller

Multiple channels Indirect selling More advertising to create awareness among masses Mostly list pricing

Price