Industrial buyers and sellers operate in a dynamic environment. One constantly poising new opportunities and threats. The industrial marketing environment could be divided into three levels namely the interface level, the public’s level and the macro environment level. The Interface Level This involves those key participants who immediately interface with an industrial firm (buyer or seller) in facilitating production, distribution and purchase of firm’s goods and services. Supply inputs are transformed by a company and its competitors into outputs with added value that move on to the end markets, the move being made through the firms interface with industrial distributors and dealers, manufacturers representatives and the company’s own sales people. That move is made possible by a firms interface with facilitating institutions such as banking, transportation, research and advertising firms. Participants in the interface level include: Input supplier– Input goods such as the raw materials, labor and capital are supplied Continue reading
Industrial Marketing
Industrial marketing, also known as business-to-business (B2B) marketing, is a branch of communications and sales that specializes in providing goods and services to other businesses, rather than to individual customers.
Industrial Distribution Channel
When a company or a manufacturer produces goods or services, it has the immediate responsibility to distribute and sell them to the industrial and institutional customers. The industrial customers generally constitute of wholesalers, retailers, manufacturers, educational institutions, governments, hospitals, public utilities, and other formal organizations. There are various intermediaries who are involved in a distribution and selling process helping the manufacturers to make their goods reach the end users. Thus, a network or channel that helps to flow the goods from the producer to the consumer through a set of interdependent organizations (intermediaries) is called distribution channel or trade channel or marketing channel. Channels are the tools used by management to move the goods from the place of production to the place of consumption. In the progression, the title of goods gets transferred from sellers to buyers. Industrial distribution is unique as there are several different methods of channeling the Continue reading
Strategic Planning in the Industrial Market
While the basic principles of marketing planning apply in both markets, many organizations have found that what works well in the consumer market fails to do so in the industrial market. Two significant differences between these markets appear to account for this phenomenon. First, unlike the consumer market where products are normally’ marketed through one or two channels, most industrial marketers face diverse markets that must be reached through a multiplicity of channels-each requiring a different marketing approach. A producer of communication equipment, for instance, may market to such diverse segments as the commercial, institutional, and governmental market, each of which will require a unique marketing plan. Second, in contrast to consumer marketing, successful industrial marketing strategy depends more on other functional areas. Where the elements of planning in consumer marketing can often be contained within specific areas of marketing, such as advertising, selling, and product management, planning in the Continue reading
Strategic Industrial Marketing
Marketing is carefully meshed with production, finance, research and development (R&D), purchasing, and other functions of the business so as to make the maximum contribution to company objectives. The marketing activities of industrial products are an integral part of the company’s total operating system. Therefore, it is useful to identify the major types of plans by which operations of an enterprise are directed. These may be designated as strategic, operational, logistical, and organizational. A plan is a goal-directed system of action. A strategic plan is one which describes the allocation of a firm’s resources which the management believes will achieve the corporate mission with the greatest efficiency over the long run. Supporting the strategy and contributing to its implementation are plans for the operations, logistics and organization called for by the strategy. Together, these constitute a hierarchy of objectives, and plans to achieve them, which make up the guidance system Continue reading
Industrial Buying Process
In consumer marketing, consumers make buying decisions based on certain mental stages such as need recognition, information search, evaluation, purchase decision, and post-purchase behavior. But, in industrial markets the buying decision making process includes observable sequential stages involving many people in the buying organisation. The understanding of these steps/phases of buying-decision making is helpful to an industrial marketer to develop an appropriate selling strategy. The purchasing activities of industrial buyers consist of various steps/phases in buying decision making process. The importance of each step depends upon the type of buying situation. The industrial marketers should understand both (step in decision-making process and the type of buying situations) to market the product or service. In 1967, Robinson, Faris, and Wind developed a process “buy-phases” having eight steps in buying-decision process in industrial market. These phases or steps in industrial buying process are elaborated as follows: 1. Recognition of Need of Industrial Continue reading
Industrial Buying Behavior Models
The buying decisions of industrial buyers are influenced by many factors. Usually, these are influenced by organisational factors or task-oriented objectives viz. best product quality, or dependable delivery, or lowest price and personal factors or non-task objectives viz. like promotion, increments, job security, personal treatment, or favor. When the suppliers proposals are substantially similar, organizational buyers can satisfy organisational objectives with any supplier, and therefore personal factors become more important. When suppliers offers differ significantly, industrial buyers pay more attention to organisational factors in order to satisfy the organisational objectives. There are two models available to provide a comprehensive and integrated picture of the major factors that combine to explain organisational buying behavior. These are: The Webster and Wind Model The Webster and Wind Model of organisational buying behavior is quite a comprehensive model. It considers four sets of variables: environmental, organizational, buying center, and individual, which, affect the Continue reading