The industrial products are technical in nature that have very few buyers compared to the consumer products. This makes the industrial marketers to change their promotional strategy for industrial goods and services. The promotional mix used by the industrial marketer consists of advertising, sales promotion, publicity, public relations, personal selling and direct marketing. These tools help them to build awareness, develop company image, inform about the product features thus assisting the company sales force and other intermediaries to increase their sales. Of all the promotional mix, personal selling is the most important because industrial products are technical in nature and they involve lot of direct interactions by the company people with the industrial customers. However, all the elements of promotional mix needs to be well integrated with personal selling with proper coordination in order to develop an effective industrial marketing communication strategy. Any industrial communication or promotion program in order Continue reading
Industrial Marketing Strategy
Nature of Demand in Industrial Markets
The demand for industrial products and services does not survive by itself. It is derived from the ultimate demand for consumer goods and services. Therefore, industrial demand is called derived demand. Sometimes, the demand for industrial product is called joint demand, when the demand for a product depends upon its use along with the existence of other product or products. Cross elasticity of demand exists for some substitute products in industrial market. These concepts are detailed as follows: Derived Demand The single most important force in marketing of industrial products and services is derived demand. Industrial customers buy goods and services for making the use in producing other goods and services and finally produced product/service sold to the consumers. In industrial marketing, the demand for industrial goods and services is derived from consumer goods and services. For example, the demand for precision steel tubes does not exist in market. It Continue reading
Long-Term Industrial Product Strategies
Industrial marketing firms have to adopt the following three important steps for developing long term product strategies for existing individual products and products lines. Assessing the performance of all the existing products or product lines by using product evaluation matrix. Examining the relative strengths and weakness of the firm’s products in comparison to competitors’ products by using perceptual mapping technique. Deciding the product strategies for the existing products based on the above analysis. 1. Product Evaluation Matrix Yoran Wind & Henry Claycamp have developed a technique called product evaluation matrix to be used to assess the product performance. Performance parameters of a product such as industrial sales, company sales, market share and profitability are combined in the matrix. Industry sales are represented on vertical axis and are grouped as growth, stable or decline. Company sales are assessed on horizontal axis and are grouped as growth, stable or decline. In the Continue reading
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 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