Introduction – Industrial

Marketing
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.
It is the creation and management of mutually
beneficial relationships between organizational
suppliers and organizational customers.
Customer can be private firm, public agency, or nonprofit
organization.
Nature of Industrial Marketing
Relatively few buyers and sellers.
Highly professional and Trained people in Buying
processes are involved. In many cases two or three
decision makers have to be considered in purchasing
industrial products.
High value considered purchase
Purchase decision is typically made by a group of
people ("buying team") not one person.
Nature of Industrial Marketing
Often the buying/selling process is complex and
includes many stages (for example; request for
expression of interest, request for tender, selection
process, awarding of tender, contract negotiations, and
signing of final contract).
Selling activities involve long processes of prospecting,
qualifying, persuading, making representations,
preparing tenders, developing strategies and contract
negotiations.
 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.
 Marketing Concept
Three major components:
2. A customer orientation
should be integrated
throughout the functional
areas of the firm:
production, engineering,
finance, R&D.
Marketing Concept
Three major components:
3.Customer satisfaction is viewed as the means to long-
term profitability goals.
Marketing Mix
Four Ps
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 ?
7 Major Differences
Products/Services being marketed (Product)
Market structure
Decision making
Customer buying behaviour
Distribution channel (Place)
Communication process (Promotion)
Economic/Financial factors (Pricing)
Products/Services
Industrial Market Customer Markets

* Technical complexity and * Standardized.

customized.
* Service, delivery and * Service, delivery and
availability is very availability is somewhat
important. important.
 Market Structure
Consumer Markets
Industrial Market
Geographically dispersed
Geographically conc. Mass markets
Fewer buyers (relatively) Free Market
(large number of buyers)
 Decision Making
Consumer Market
Industrial Market
* Unobservable mental
* Distinct observable stages
stages, not very clear
pattern.
* Multiple influencers and
decision makers.
 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.
*Non 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.
 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.

Consumer Markets

Normally MRP
 Industrial Demand
Derived

Joint/Shared

Cross-Elasticity of demand