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Industrial Marketing: Providing

Industrial or business-to-business (B2B) marketing involves providing goods and services to organizations rather than individual consumers. The key differences between B2B and consumer marketing are: 1) Products for industrial markets tend to be more technical, customized, and focused on functionality rather than aesthetics. 2) Decision making for industrial purchases is more formalized, involving multiple stakeholders within an organization. 3) Demand in industrial markets is derived from the needs of the final consumers of the organization's products/services. 4) Distribution and promotion strategies for industrial markets emphasize personal selling and direct channels rather than indirect retail channels.

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Vishal Bhatia
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32 views

Industrial Marketing: Providing

Industrial or business-to-business (B2B) marketing involves providing goods and services to organizations rather than individual consumers. The key differences between B2B and consumer marketing are: 1) Products for industrial markets tend to be more technical, customized, and focused on functionality rather than aesthetics. 2) Decision making for industrial purchases is more formalized, involving multiple stakeholders within an organization. 3) Demand in industrial markets is derived from the needs of the final consumers of the organization's products/services. 4) Distribution and promotion strategies for industrial markets emphasize personal selling and direct channels rather than indirect retail channels.

Uploaded by

Vishal Bhatia
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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INDUSTRIAL MARKETING

(Also called: Business-to-Business (B2B) and


Organizational Marketing.)

Definition

Industrial/ B-to-B marketing involves the process of


providing goods and services to industrial market
intermediaries , as opposed to ultimate (final) consumers.
The institutional customers use purchased goods and
services in their own production of goods and services.

Consumer marketing, in contrast, is marketing of goods


and services to individuals, families and households
purchasing goods and services for their own consumption
• Marketing Concept
• Marketing Mix
• Market Segmentation
• Product Life Cycle

If all these apply in both B2C and B2B,


how are they different ?

3
8 Major Differences
Between B2B and B2C

• Products/Services being marketed (Product)


• Market structure
• Decision making
• Nature of demand
• Customer buying behaviour
• Distribution channel (Place)
• Communication process (Promotion)
• Economic/Financial factors (Pricing)

4
Products/Services

Customer Markets
Industrial Market
* Standardized.
* Technical complexity and
customized.
* Service, delivery and
* Service, delivery and
availability is somewhat
availability is very
important.
important.

5
Types of Industrial Goods
Raw Materials – These are products destined to become part of
another product, subject to further processing.

Fabricated Materials – In contrast to raw materials, these have


already been processed but may require further processing.

Installations – Major equipment with long lives such as buildings


and major equipment.

Accessory Equipment – Such equipment is used to aid and


implement production and includes office machines as well as
machine tools.

Operating Supplies – Materials used in producing goods & services.


Market Structure

Industrial Market Consumer Markets

Geographically conc. Geographically dispersed


Fewer buyers (relatively) Mass markets
Big buyers Free Market
( small no. of large buyers) (large number of buyers)

7
Decision Making

Consumer Market
Industrial Market
* Unobservable mental
* Distinct observable stages
stages, not very clear
pattern.
* Multiple influencers and
decision makers.

8
Decision Making (Eg: Soap)
Customer

* Low involvement buying


and impulse purchase
Industrial Buyer – Soaps for (the exact choice criteria
Workers canteen difficult to identify) & varies
from situation to situation.
* Need identification, selection,
procurement etc.
* O.K. from the workers union,
agreement by contractor,
purchase departments
negotiation & placing order.
Nature of Demand
• Derived
• Joint/Shared
• Concentrated
• Inelastic

10
Buying behaviour
• Group Process
• Formal
• Lengthy
• Loyal
• Decisions based on risk and opportunity

11
Buying behaviour
Consumer Market

*Social / psychological
factors are important.
Industrial Market *Family involvement & focus
more on product per se.
*Evaluated for functionality *Nor personal relationship
rational/task motive to buying. with the supplier.
*Purchasers are experts & focus * Less of formal processes.
is more on performance/service.
*Higher interaction with the
supplier.
* Formal processes.
Distribution Channel

Industrial Markets Consumer Markets

* Shorter, more direct & * Indirect and multiple


fewer linkages between seller linkages
and buyers.
Distribution Channel (Example)

Customer for Cold drinks


Hotel buying Cold Drinks
* Normal distribution style
* Supplied directly by the
of distributor to retailer to
distributor, may even be
customer. Virtually no
serviced by company
interaction with company.
employee or a regular basis.
Promotion
Industrial Markets

Emphasis on personal selling or one to one dealing.

Support sales with other promotional activities: advertising in


trade journals, catalogs, trade shows, direct mail, WWW.

Message focused on technical, factual, and descriptive content.

Consumer Markets

Emphasis on mass market promotion.


Pricing
Industrial Markets

Competitive bidding & multistage negotiation.

Bulk discounts.

Sharing of cost data & budgeting of acceptable profits in many cases.

Consumer Markets

Normally MRP & MOP

Concept of list price & its implementation.


8 Major Differences
• Products/Services being marketed (Product)
• Market structure
• Decision making
• Nature of demand
• Customer buying behaviour
• Distribution channel (Place)
• Communication process (Promotion)
• Economic/Financial factors (Pricing)

17
WHO do you sell to ?

The Organisation

Consumer Products Industrial Products


Industrial customers tend to be relatively few

They buy higher volume ( Vs individual customer)

Decision making is more complex

Formal purchasing procedures/routines

Many actors involved in purchasing process

The buying decision making may takes long time

Less emotional and more rational

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