What is Industrial sales?

B2 B Marketing Institutional sales Government

Salient Features
Fewer buyers Large buyers Closer customer supplier relationship Geographical concentration of buyers Derived demand Inelastic demand Fluctuating demand Professional purchasing Several buying influences Multiple sales calls Direct purchasing Reciprocity Leasing

Buying Situations
Routine items new specifications new items

Systems Buying
Buying a total solution from one seller

Systems Contracting
Single supply source supplies MRO (maintenance,repair.operators)

Buying Centres
Initiators Users Influencers Deciders Approvers Buyers Gatekeepers

Major Influencers
Environmental Organisational Interpersonal Individual Cultural

Environmental
Macro views eg.production levels,investment,consumer spending,interest rates,technological changes,political - regulatory,eco - friendly developments You may like to store up raw materials fearing an impending scarcity or you may like to sign up some long term agreements

Organisational
Purchase department Cross - functional roles - team operation Centralised purchasing - economical,better
deals,easy for supplies to interact at one point

Decentralisation of low price items Internet purchasing Long term contracts Supplier evaluation JIT

Interpersonal
The seller has to be sensitive to the group dynamics existing in the organization involved in the buying process. To that extent any prior information researched before the purchase decision is taken is invaluable for the selling organization.

Individual
keep it simple own expert want the best want everything done negotiators

Cultural Factors
Necessary to know the local culture. Business buyers buy to reduce operating costs or satisfy social or legal obligations

Buyer tactics
Commoditization Multisourcing

Procurement Orientation
Cost reductions Quality improvements Early supplier involvement programmes

Buying Process
Problem recognition - new product,spares,purchase
material unsatisfactory,opportunities to buy some materials economically

General need description - evolved in a team

process

Product specifications engineering,manufacturing.technical

Supplier search

 Proposal solicitation quotations,proposals,presentations

Supplier selection Buying situation - routine order products,procedural

problem products,political problem products

Routine order products

delivery price reliability supplier reputation

Procedural problem products

Technical service supplier flexibility product reliability

Political problem products

All the previous points mentioned in the previous two slides

Multisourcing
Hedging against risks of non - supply supplier can have IR problems machine breakdowns insurance against twisting arms

Institutional Buyers
Business is big minimum specifications lowest price domestic supplier preference buyer is unlikely to understand technicalities time taking patience