CONSUMER PRODUCTS

INDUSTRIAL PRODUCTS
Industrial goods are differentiated from final
consumer goods based on their ultimate use.
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
 A quick….
 Marketing Concept

 Marketing Mix

 Market Segmentation

 Product Life Cycle

 Marketing Concept
Three major components:
1.All company activities should begin with, and be
based on, the recognition of a fundamental
customer need.

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 Marketing Concept
Three major components:
2. A customer orientation
should be integrated
throughout the functional
areas of the firm:
production, engineering,
finance, R&D.

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 Marketing Concept
Three major components:
3.Customer satisfaction is viewed as the means to
long-term profitability goals.

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 Marketing Mix

Four Ps

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Market Segmentation
Product Life Cycle
• Marketing Concept
• Marketing Mix
• Market Segmentation
• Product Life Cycle

If all these apply in both B2C and B2B,

how are they different ?

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 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)

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 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.

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 Products/Services

Industrial Market Customer Markets

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 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)

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 Decision Making

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

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 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

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

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

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 WHO do you sell to ?

The Organisation

Consumer Products Industrial Products

 Types of Industrial Customers
1. Industrial customers: consisting of manufacturing
and processing firms
 Types of Industrial Customers
2. Institutional customers: consisting of institutions such
as hospitals, educational institutes.
 Types of Industrial Customers
3. Governmental customers: agencies, municipalities
at different levels.
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

Summing….. Industrial Marketing:

•Higher functional dependence, particularly manufacturing

and R & D, much closer relations with overall corporate
strategy.

•More customer-oriented

•Technical product complexity, different sales techniques

and different salesmanship.
Central to Industrial Marketing is
relationship
GROUP HUDDLE TIME !! 
Prepare a Marketing Plan (esp. target segments, promotion )
for any ONE of the following.

1. Parts for the Aviation sector

2. Robotic chair for Automobile

Industry

3. Logistics Service Providers

Prepare a Marketing Plan (esp. target segments, promotion )
for any ONE of the following.

4. IBM Global Services

5. RFID Technology

6. Warehouse Robots