Ind Mkt(1-2)

INDUSTRIAL (B2B)

MARKETING

B2B MARKETING CONSISTS OF ALL ACTIVITIES INVOLVED IN THE MARKETING OF PRODUCTS AND SERVICES TO ORGANISATIONS (COMMERCIAL ENTERPRISES, PROFIT AND NON PROFIT ORGANISATIONS, GOVT AGENCIES AND RESELLERS) THAT USE PRODUCTS AND SERVICES IN THE MANUFACTURE OF CONSUMER OR INDUSTRIAL GOODS & SERVICES AND TO FACILITATE THE OPERATION OF THEIR ENTERPRISES. BASIC PRINCIPLES OF CONSUMER MARKETING ARE EQUALLY APPLICABLE TO BUSINESS TO BUSINESS MARKETING. IN OTHER WORDS, 1. COMPANIES CAN OUTPERFORM COMPETITION IF THEY CAN MOVE FROM A PRODUCT AND SALES ORIENTATION TO A MARKETING PHILOSOPHY. 2. THE KEY IS TO DEVELOP A SUPERIOR VALUE PROPOSITION AND SUPERIOR VALUE DELIVERY SYSTEM. 3. TOTAL QUALITY IS THE KEY TO VALUE CREATION AND CUSTOMER SATISFACTION.

BUSINESS TO BUSINESS MARKETING IS THE BACKBONE OF THE HIGH STANDARD OF LIVING ENJOYED BY CONSUMERS IN THE DEVELOPED ECONOMIES.

IN BUSINESS MARKETS, A FEW IMPORTANT FACTORS ARE - MARKETS ARE RELATIVELY CONCENTRATED, - CHANNELS OF DISTRIBUTION ARE SHORTER, - BUYERS ARE WELL INFORMED, HIGHLY ORGANISED & SOPHISTICATED IN BUYING TECHNIQUES. IN ORDER TO SUCCEED IN BUSINESS MARKETS, COMPANIES MUST DEFINE THEIR TARGET MARKETS, DETERMINE THE NEEDS OF THOSE MARKETS, DESIGN PRODUCTS AND SERVICES TO FILL THOSE NEEDS AND DEVELOP PROGRAMS TO REACH AND SATISFY THOSE MARKETS.

THUS, B2B MARKETING IS THE HUMAN ACTIVITY DIRECTED TOWARDS SATISFYING WANTS AND NEEDS OF ORGANISATIONS THROUGH EXCHANGE PROCESS. POINTS TO REMEMBER: 1. BUSINESS CUSTOMERS DIFFER FROM ULTIMATE CONSUMERS IN THEIR BUYING BEHAVIOUR, DECISION MAKING PROCESSES AND TASKS. 2. MARKETING EFFECTIVELY IN AN BUSINESS MARKET REQUIRES A THOROUGH UNDERSTANDING OF THE BEHAVIOUR OF INDUSTRY AND THE COMPOSITION OF FORCES THAT AFFECT THE DEMANDS OF THE INDUSTRY 3. SERVICE COMPONENT IN BUSINESS MARKETING HAS HIGH IMPORTANCE. EXCHANGE PROCESS PRODUCT & SERVICE, INFORMATION, FINANCIAL, SOCIAL CUSTOMERS BUSINESS, INSTITUTIONS, GOVERNMENT, SERVICE PROVIDERS CLASSIFICATIONS OF INDUSTRIAL PRODUCTS

KEY LINKAGES OF B2B MARKETERS 1. WITH (EXTERNAL) CUSTOMERS KEY ISSUES - DERIVED DEMAND, - COMPLEX BUYING & SELLING PROCESS - CONCENTRATED CUSTOMER BASE 2. WITH (INTERNAL) ORGN FUNCTIONS / DEPTS (MFG, PROD PLANNING, ENGG, TECHNOLOGY, DESIGN, PURCHASING ETC) KEY ISSUES - EMPHASIS ON TECHNOLOGY - HIGH LEVEL OF CUSTOMIZATION - ORDER FULFILLMENT MECHANISM CHARACTERISTICS OF B2B BUYING THE INFLUENCE OF THE FORMAL ORGANIZATION THE STRATEGIC IMPORTANCE OF THE ITEM BEING PURCHASED THE COST OF THE ITEM BEING PURCHASED THE COMPLEXITY OF THE NEED BEING SERVICED

PARTICIPANTS IN BUSINESS MARKETING SYSTEMS

BUSINESS ORGANISATIONS / INSTITUTIONS / GOVT AGENCIES / INTERMEDIARIES / DISTRIBUTORS / DEALERS / AGENTS / BROKERS / DROP SHIPPERS / LOGISTIC SERVICE PROVIDERS DIRECT CHANNELS & INDIRECT CHANNELS BUYER SELLER RELATIONSHIPS VALUE OF TRADE RELATED TO INDUSTRIAL MARKETS INDIAN AND GLOBAL SCENE

DIFFERENCES BETWEEN BUSINESS MARKETING AND CONSUMER MARKETING EXIST IN TERMS OF (a) THE STRUCTURE OF THE MARKET (b) PRODUCT USAGE (c) DERIVED DEMAND (d) NATURE OF BUYING BEHAVIOUR (e) PROMOTIONAL VARIABLES (f) PRICING STRATEGIES BUSINESS MARKETING ENVIRONMENT
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 TECHNOLOGICAL ENVIRONMENT CUSTOMER ENVIRONMENT COMPETITIVE ENVIRONMENT LEGAL / REGULATORY ENVIRONMENT ECONOMIC ENVIRONMENT

Case : Cummins India

Note: Prepared by Prof SNM for 2013 class)