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B2B Marketing
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Industrial Marketingconsists of allactivities involved in the marketing of
products and services toorganizations( i.e., commercial enterprise, profit and not-
for-proft-institutions , governmentagencies, and resellers)
that use products and services in production
of consumer or industrial goods andservices and to facilitate the operation of
their enterprises
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In ustrial versus Consumer Mar eting
Industrial Markets Consumer Markets
MarketStructure
Geographicallyconcentrated
Relatively few buyers
Oligopolistic
Competition
Geographicallydispersed
Mass markets
Monopolistic
Competition
Products Technical complexity
Customized
Service, delivery andavailability very
important
Standardized
Service, deliveryand availabilityimportant
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Industrial versus Consumer Marketing
Industrial Markets Consumer MarketsBuyerbehavior
Functionalinvolvement
Rational/taskmotives predominate
Technical expertise
Stable relations
Interpersonalrelationships
Reciprocity
Familyinvolvement
Social/psychological motivespredominates
Less technicalexpertise
Nonpersonalrelationship
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Industrial versus Consumer Marketing
Industrial Markets Consumer Markets
Decisionmaking
Distinct, observablestages
Unobservable,mental stages
Channels Shorter, more direct,
fewer linkages
Indirect, multiple
linkagesPromotion
Emphasis onpersonal selling
Emphasis onadvertising
Pricing
Competitivebidding, negotiatingon complex purchases
List price onstandard items
List prices
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Value Creation Selling1 You as a seller and your organization devote
large amounts of time and energy.
2 You use capabilities and tools that youve
never used before to understand how yourcustomers do business and how you can help
them improve that business.
3 Youre going to make it your business to know
not only your customers but also your
customers' customers.
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Economies of Industrial Demand
Derived Demand : is the single most importantforce in the marketing of industrial goods and
services.
Joint Demand : It occurs when one product requires
the existence of others to be useful.
Cross Elasticity of Demand : Responsiveness of the
sales of one product o a price change in another
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The Process Exchange in the Industrial
Market
Quality
Maintenance
ServiceCustomers
Product
Exchange
Suppliers
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The Process Exchange in the Industrial
Market
Technical
Economics Customers
Information
Exchange
Suppliers
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The Process Exchange in the Industrial
Market
Credit
Leasing Customers
Financial
Exchange
Suppliers
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The Process Exchange in the Industrial
Market
Trust
Interpersonal
Relationship
Customers
Social
Exchange
Suppliers
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The Resellers Market
Resellers purchase goods and services to facilitate the
operation of their businesses.
Everything that is purchased is purchased to make profit.
Wholesalers and retailers are treated as a n element of the
marketing mix (place or distribution) rather than as
served market.
These firms represent a sizable and important Buying
Group whose behavior is similar to Industrial Buyers
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Industrial Customers
IndustrialDistributors
Commercial
Enterprises
Government
Agencies
Profit/non profit
institution
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Industrial Customers ( Products Purchased)
Commercial
Enterprises
Original Equipment
Manufactures
(OEM)
Users
Lubricants, coal,
hand tools, brooms,
paper and
management
consulting services
Steel, cement,
generators, motors,
batteries, plastics,
farm products, raw
materials
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Industrial Customers ( Products Purchased)
Government
Agencies
Airplanes,computers, desks,
guns, paint, pencils
and legal services
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Industrial Customers ( Products Purchased)
Profit/nonprofit
institutions
Surgical appliancesand supplies, X-rays
tables, soap and
window cleaning
services
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Classification of Industrial Products
Raw materialsManufactured
materials and
parts
InstallationsAccessory
equipment
SuppliesBusiness
services
Materialsand Parts CapitalItemsSupplies andServices
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Apple iPod(Gross Margin v/s Cost)
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We help people
find their way
Marketing Strategies over Various Buying
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Marketing Strategies over Various BuyingSituations & Phases
Phases New Task Modified Rebuy
ProblemRecognition
Anticipate problem;
use advertising andcreative people toconvince buyers of
problem-solvingcapabilities
In supplier; maintainquality/servicestandards : outsupplier :watch for
developing trends
SolutionDetermination
Provide detailedproducts/serviceinformation todecision makers
In supplier and outsupplier : stresscapability, reliability,and problem solvingcapabilities
Marketing Strategies over Various Buying
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Marketing Strategies over Various BuyingSituations & Phases
Phases New Task Modified Rebuy
Determiningneeded item
Provide detailedproduct/serviceinformation todecision makers
In supplier and outsupplier : stresscapability,reliability, andproblem solvingcapabilities
Searching for
andqualifyingsupplier
In supplier :
maintaindependability;
out supplier :
demonstrate abilityto erform task
In supplier : watch
for problems ;out supplier :demonstrate
ability to performtask
Marketing Strategies over Various Buying
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Marketing Strategies over Various BuyingSituations & Phases
Phases New Task Modified Rebuy
Analyzing
proposals
Understands
details of customerproblem/needs ;make timelyproposals
Understands
details of customerproblem/needs ;make timelyproposals
Marketing Strategies over Various Buying
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Marketing Strategies over Various BuyingSituations & Phases
Phases Straight Rebuy
ProblemRecognition
In supplier : maintain close relationshipwith users and buyers;
Out suppliers : convince firm to reexaminealternatives
SolutionDetermination
Same as phase 1
Marketing Strategies over Various Buying
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Marketing Strategies over Various BuyingSituations & Phases
Phases Straight Rebuy
Determiningneeded item
Same as phase 1
Searching for
and qualifyingsupplier
Same as phase 1
Analyzingproposals
Make timely proposal
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Conflicts Marketing /Engineering
Marketing
Responses
Engineering
Responses
NewProducts
Design
They dont give usproducts we can
sell.
By the time we getthem to design
they are obsolete.
Were limited in whatwe can design because
we have to keep itsimple for marketing
Breadthof the
ProductLine
We need morevariety
We have too muchvariety now.
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Conflicts Marketing /Engineering
Marketing
Responses
Engineering
Responses
ProductAppearance
Our line looksso inferior
Our line does notneed a lot of fancy
window dressing
ProductProblems
Why cantengineering
make workableproducts
Neither the customernor our marketing
departmentunderstand the productand how it is supposedto work.
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Conflicts Marketing /Engineering
Marketing
Responses
Engineering
Responses
ProductPromotion
Theinformation weget fromengineering is so
dull andtechnical that noone would read it
The information thatmarketing includes isso exaggerated. Wecould get sued for false
advertising.
Conflicts Mar eting /Engineering
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Conflicts Mar eting /EngineeringMarketing
Responses
Engineering
Responses
Packaging It looks so cheap& functions sopoorly that it
makes ourproducts hard tosell.
Trying to package somany products andhold costs down is
extremely difficult.
Quality Why cant we
have reasonablecosts.
We must design so
many products withnumerous options thatit is hard to maintainquality and keep costsdown.
Conflicts Mar eting /Engineering
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Conflicts Mar eting /EngineeringMarketing
Responses
Engineering
Responses
Technical We need atechnical expertto soothe
customers eventhey really do nothave a problem
We dont have enoughmanpower to hold thehand of some pet
customers ofmarketing
Warranty Engineering
always goes bythe book, theydont understandthat you have to
bend a little
Marketing wants us to
pay the full amount ofevery claim, even aninvalid one
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