3. Because
• Composition is Uniquely different
– Product – Quality Maintenance
– Information – Answering Technical, Economic, organizational
question over a long period of time
– Financial – Granting Credits, Currency Exchange
– Social – Trust Interpersonal Relationships
• Forces that affect Industrial Demand are different
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• Employment Opportunities
4. Definition
Industrial Marketing is the human activity directed
toward satisfying wants and needs of organizations
through the exchange process.
Industrial Marketing consists of all the activities involved
in the marketing of products & services to
organizations, institutions etc, that use products and
services in the production of consumer or industrial
goods & services and to facilitate the operation of their
enterprises.
5. Points of Parity
• Must define Target Markets
• Determine the needs of those market
• Design products for those “needs” satisfaction
• Communicate and Reach those markets
Industrial Marketing is more a responsibility of
General Management
6. Points of Differentiation
Characterstic B2B B2C
Product Technically Complex, Often Non-Technical, Standardized
Customized
Price Competitive Bidding, MRP,
Negotiated Pricing, not so very critical factor in
Critical factor purchase decision
Place Geo Concentrated, Geo Distributed,
Few Buyers More number of Buyers
Promotion Importance to Personal Importance to Advertising
Selling
Channel More Direct, Indirect,
Multi Channel Few Channels with many
layers
Buyer Behavior Various Functional involved, Family Members involved,
Mainly Rational buying Physiological/Psychological/S
decisions, Technically ocial need based buying
competent decision
Service Very Important Somewhat
7. Market Characteristics
• Size of the Market
– Relatively few Industrial Customers
• Geographic concentration
– Jamshedpur
• Competitive nature of the market
– Oligopsonistic buying
• control of the purchase of a commodity or service in a given market by a small number of
buyers
– Large firms tend to dominate many markets
• Product Characteristics
– Technical
– Service & support more needed
8. Industrial Demand
• Derived Demand
– Demand for B2B is derived from the ultimate demand
for B2C
– Recessionary Effects
• Joint Demand
– Demand for B2B depends upon its use in conjunction
with another product or service
– B2B customers prefer to buy joint products lines from
one supplier
9. Cross Elasticity of Demand
• Substitute Effect
– a good's demand is increased when the price of another good is increased
– Steel & Aluminum, Margarine & Butter
– More the availability of Substitute, more is the Cross Elasticity of demand
• Complementary Effect
– the demand for a good is decreased when the price of another good is
increased
– Computer hardware and computer software, Printer & Cartridge
– Demand is more closely related
In B2B, it is important to measure the interrelationships
among industries
10. Reseller’s Market
• Similar to Industrial Market
• Market Characteristics
– Retailers have strong bargaining power (Wal-Mart)
• Product Characteristics
– Customized products
– Additional Cost factors removed
– After Sales Service is a major differentiating factor
• Buyer Characteristics
– Compare technical features of different competiting products
– Unlike industrial buying, multiple buying influencers & decision makers
are involved
11. Reseller’s Market
• Channel Characteristics
– Length of distribution depends on type of Product
– Availability of Goods is very important, or may lead to
lost sales
• Promotional Characteristics
– Emphasis on Personal selling
• Price Characteristics
– More concerned
12. Importance of Reseller’s Market
• Ability to affect consumer demand directly
through
– Increased promotion
– Value enhancing services
– Reduced price
• Positioned closest to ultimate consumers
– Better feedback, Information catalyst
• Joint Demand
13. Few Check Points
• Excessive preoccupation with products
• Too much technical orientation and not
Customer Service
• Customer benefits and Needs satisfaction
should be the center of attention