Industrial Marketing

1
Industrial Marketing

• Key Aspects Distinguishing Industrial Marketing
• Differentiation in Consumer Marketing and
  (Industrial
• Marketing)

2

• Figure 1 Key Linkages

Key Linkages
External Environment
Internal Organization
External Linkages
Internal Linkages
Customer
Marketing
Manufacturing
Derived Demand Complex Buying Process Concentrated
Customer base
Emphasis on Technology High Level of
Customization Made to Order
3
The External Linkages

• Derived Demand
• Complex buying/selling process
• The influence of the formal organization,
• The strategic importance of the item being
  purchased,
• The cost of the item being purchased, and
• The complexity of the need being serviced
• Concentrated customer base

4
The Internal Linkages

• Emphasis on Technology
• High Level of Customization
• Made to Order
• Marketing section and development
• Market segmentation
• Advertising
• Pricing
• Product Policy

5

• Channel of distribution
• There is a manageable (small) number of customer
• Customers are concentrated geographically
• The sales process is long and complex
• Customer required a lot of information and
  training in
• product use.
• Marketing research

6
CONTRASTING INDUSTRIAL AND CONSUMER MARKETING

• INDUSTRIAL MARKETS CONSUMER MARKETS
• Market structure geographically
  concentrated dispersed
• Fewer buyers mass markets
• Oligopolistic competition Monopolistic
  competition
• Products Technical complexity Standardised
• Customised
• Service, delivery and availability
• Very important somewhat important
• Buyer behaviour functional involvement family
  involvement
• Rational/task motives dominate social/psycholo
  gical
• motives predominate
• technical expertise less tech expertise
• stable interpersonal relations nonpersonal
  relations
• reciprocity
• Decision making distinct, observable
  stages Unobservable, mental Stages
• Channels Short, More direct, Fewer
  linkages Indirect, Multiple linkages
• Promotion cmphasis on personal
  selling emphasis on advttg.
• price Competitive bidding list prices

7
ORGANISATIONAL CUSTOMER
Raw material Extraction
Material Processing
Manufacturing of parts and Assembly
Final assembly
Distri- bution
Stage 1 Stage 2 Stage
3 Stage 4 Stage 5
The chain Indicative of the Zone of the
Organisational Customer
8
Organizational Buying Behaviour
External Environment Economic
Infrastructural Social Political
Competition Regulatory
Organizatioanl Objectives Policies
Procedures Organizational structure
System
Organizational Buyer
Individual Age Income Education Job
Position Risk Attitude
Interpersonal Authority Status
Empathy Persuasiveness
9
INDUSTRIAL MARKETING

• THE INDUSTRIAL CUSTOMERS BUYER MOTIVES
• The Industrial Buyer Is Motivated By Budgetary
  Considerations Like Profit Goals, Expense
• Quotas And The Cost Benefit Guidelines.
• The Major Objective Variables Derived From The
  Above Are
• QUALITY Consistency Which Can Also
  Result In The Savings On The Inventory,
• Standardisation
• SERVICE Products And Materials,
  Technical, Sales Replacement Parts, Delivery,
• Information.
• PRICE Evaluated Price /
  Perceived Prices
• SAVINGS Motivation Provided By
  Savings Even More In The Accelerating
• Costs Times
• ASSURANCE OF The Confidence On Timely
  Supplies
• SUPPLY
• BUYER personal Feelings And
  Emotions As Well As Some Extraneous
• TEMPERAMENT Yet Important Factors

10
The Buy Grid Model
Buy Classes ----------------------------------
--------------------------------------------------
----------------------- Buy Phases New
Task Modified Re-buy Straight
Re-buy -------------------------------------------
--------------------------------------------------
-------------- 1 Problem recognition Yes
Maybe No 2 General need description
Yes Maybe No 3. Product
specification Yes Yes
Yes 4. Suppliers Search Yes
Maybe
No 5. Proposal solicitation Yes
Maybe No 6. Supplier selection
Yes
Maybe No 7.
Order-routine specification Yes
Maybe No 8. Performance review
Yes Maybe No _____________________
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