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Industrial marketing

Marketing Key concepts Product / Pricing / Promotion Distribution / Service / Retail Brand management Account-based marketing Marketing effectiveness Market research Marketing strategy Marketing management Market dominance Promotional content Advertising / Branding Direct marketing / Personal Sales Product placement / Public relations Publicity / Sales promotion Underwriting Promotional media Printing / Publication / Broadcasting Out-of-home / Internet marketing Point of sale / Novelty items Digital marketing / In-game Word of mouth

Industrial marketing is the marketing of goods and services from one business to another. The word "industrial" has connotations of heavy machinery, mining, construction etc. but "industrial marketing" is not confined to these types of business activities. Broadly (and inadequatly) marketing could be split into consumer marketing (B2C "Business to Consumer") and industrial marketing (B2B "Business to Business"). The key differences are...

Contents
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1 B2B Business to Business (or "Industrial") 2 B2C Business to Consumer (or "Consumer") 3 Blurring between the definitions 4 Competitive tendering 5 Bidding process 6 Non-tender purchasing 7 Developing a sales strategy/solution selling/technical selling

• • • An organization is seeking to build a new warehouse building. • • • • • Marketing is one-to-one in nature. it obtains three proposals from suitable construction firms and after a long process of evaluation and negotiation it places an order with the organization that it believes has offered the best value for money. An organization has significant need for legal services and obtains submissions from two law firms. He demonstrates a photocopier/fax/printer to the office administrator. The main features of the B2B selling process are. making representations. request for expression of interest. qualifying. contract negotiations. awarding of tender. An advertisement appears that advertises home delivered pizza. Analysis of the proposals and subsequent discussions determines that there is no price advantage to placing all of the work with one firm and the decision is made to split the work between the two firms based on an evaluation of each firm's capabilities.. and signing of final contract).. . The family decides to order a pizza. wooing. Purchase decision is typically made by a group of people ("buying team") not one person. It is relatively easy for the seller to identify a prospective customer and to build a face-to-face relationship.. A sales representative makes an appointment with a small organization that employs 22 people.• • • • • 8 From cannon fodder to preferred tenderer 9 The key features of a successful industrial sales organisation 10 The internet and B2B marketing 11 See also 12 References B2B Business to Business (or "Industrial") Typical examples of a B2B selling process are. developing strategies and contract negotiations.. • A family are at home on a Sunday night and are watching television.. Selling activities involve long processes of prospecting. Often the buying/selling process is complex and includes many stages (for example. request for tender. See also B2B definition. After discussing the proposal with the business owner it is decided to sign a contract to obtain the machine on a fully maintained rental and consumables basis with an upgrade after 2 years. After carefully documenting their requirements. preparing tenders. B2C Business to Consumer (or "Consumer") Examples of the B2C selling/buying process are. High value considered purchase. selection process..

the final purchaser is still a business. sales and marketing activities aimed at B2B are distinctly different from B2C (as outlined above). A pensioner visits her local shopping mall. For example. The main features of the B2C selling process are. However.. print media) advertising to build the brand and to achieve top of mind awareness.• • Walking down a supermarket aisle. radio. He pick's the product and adds it to his shopping cart. However. It is not practical for sellers to individually identify the prospective customers or meet them face-to-face. She purchases a number of items including her favourite brand of tea. an organisation that sells electronic components may seek to distribute its products through marketing channels (see channel (marketing)). More reliance on branding. a single man aged in his early 30's sees a hair care product that claims to reduce dandruff. even though these definitions are blurred. Proponents of the industrial marketing process argue that it requ Blurring between the definitions As in all things. Higher use of main media (television. See also B2C definition. the definitions are not clear cut. Business marketing Marketing Key concepts Product / Pricing / Promotion Distribution / Service / Retail Brand management Account-based marketing Marketing effectiveness Market research Marketing strategy . More effort put into mass marketing (One to many). Lower value of purchase. • • • • • • • Marketing is one-to-many in nature. and be selling relatively low value products. Equally there are big ticket items purchased by non-business consumers (houses and motor vehicles being the obvious examples). Greater reliance on distribution (getting into retail outlets).. Decision making is quite often impulsive (spur of the moment) in nature. She has bought the same brand of tea for the last 18 years.

7.4 Pricing o 4. or organizations.4 Briefing an agency  4. facilitating the sale of their products or services to other companies or organizations that in turn resell them.1 B2B Branding o 4.7. Also known as industrial marketing.7.1 Positioning Statement  4. or use them to support their operations.Marketing management Market dominance Promotional content Advertising / Branding Direct marketing / Personal Sales Product placement / Public relations Publicity / Sales promotion Underwriting Promotional media Printing / Publication / Broadcasting Out-of-home / Internet marketing Point of sale / Novelty items Digital marketing / In-game Word of mouth This box: view • talk • edit Business Marketing is the practice of individuals.7.2 Developing your messages  4.5 Measuring results How big is business marketing? What's driving growth in B2B Marketing? The impact of the Internet Notes . (Note that while marketing to government entities shares some of the same dynamics of organizational marketing. governments and institutions.3 People (Target Market) o 4. or B2B marketing.) Contents • • • • 1 2 3 4 • • • • 5 6 7 8 Origins of business marketing Business marketing vs. including commercial businesses.3 Building a campaign plan  4.5 Promotion o 4.6 Place (Sales and Distribution) o 4. business marketing is also called business-to-business marketing.7.7 B2B Marketing Communications Methodologies  4. consumer marketing Who is customer in a B2B Sale? B2B Marketing Strategies o 4. for short. B2G Marketing is meaningfully different.2 Product (or Service) o 4. use them as components in products or services they offer.

While consumer marketing is aimed at large demographic groups through mass media and retailers. In fact. there are more subtle distinctions between the two with substantial ramifications. now publish studies on the subject regularly. its history is more recent. B2B and B2G marketing situations. the negotiation process between the buyer and seller is more personal in business marketing. In B2C. According to Hutt and Speh (2001). the marketer must always: • • • successfully match the product/service strengths with the needs of a definable target market. the practice of one purveyor of goods doing trade with another is as old as commerce itself. J. Dwyer and Tanner (2006) point out those more marketing majors begin their careers in business marketing today than in consumer marketing. This began to change in middle to late 1970s. and that is usually through direct mail efforts and trade journals. although the bulk of research on the discipline of business marketing has come about in the last 25 years. . and Communicate and sell it in the fashion that demonstrates its value effectively to the target market. What's more. consumer marketing Although on the surface the differences between business and consumer marketing may seem obvious. and professional conferences on business-to-business marketing are held every year. position and price to align the product/service with its market. In his introduction to Fundamentals of Business Marketing Research. Marketing to a business trying to make a profit (Business-to-Business marketing) as opposed to an individual for personal use (Business-to-Consumer. notes that industrial marketing has been around since the mid-19th century. however. David Lichtenthal. point out that for many years business marketing took a back seat to consumer marketing. Dwyer and Tanner (2006) note that business marketing generally entails shorter and more direct channels of distribution. such as the Journal of Business-toBusiness Marketing and the Journal of Business & Industrial Marketing. most business marketers commit only a small part of their promotional budgets to advertising. business marketing courses are commonplace at many universities today. Business marketing vs. Pitt and Honeycutt. which entailed providers of goods or services selling directly to households through mass media and retail channels. Morris. While that advertising is limited.• • 9 References 10 External links Origins of business marketing In the broadest sense. As a niche in the field of marketing as we know it today. often an intricate balance. or B2C marketing) is similar in terms of the fundamental principles of marketing. it often helps the business marketer set up successful sales calls. professor of marketing at the City University of New York's Zicklin School of Business. A variety of academic periodicals. 2001.

government is the biggest single purchaser of products and services in the country. People (Target Market) . is the biggest.e. Finally. the cost-saving or revenue-producing benefits of products and services are important to factor in throughout the product development and marketing cycles. Product (or Service) Because business customers are focused on creating shareholder value for themselves. A B2B sale is to an organization. including the need to closely align corporate brands. such as automakers. and users. which are companies that purchase products for their own consumption. The marketing mix is affected by the B2B uniqueness which include complexity of business products and services. brokers and industrial distributors. includes schools. the U. B2B Marketing Strategies B2B Branding B2B Branding is different from B2C in some crucial ways. government agencies. the issues are broken down beyond just the original 4 Ps developed by McCarthy. The first category includes original equipment manufacturers.These are the fundamental principals of the 4 Ps of marketing (the marketing mix) first documented by E. churches and charities. Because there are some important subtleties to the B2B sale. diversity of demand and the differing nature of the sales itself (including fewer customers buying larger volumes)..[2]. And in that simple distinction lies a web of complications that differ because of the organizational nature of the sale and which vary widely by firmographic (i. hospitals and nursing homes. but ultimately it’s a single person that pulls out their wallet. In fact. But this category also includes state and local governments. industry and revenue base. location. government agencies. The third category. Who is customer in a B2B Sale? While "other businesses" might seem like the simple answer. institutions and resellers. resellers consist of wholesalers. Dwyer and Tanner (2006) say business customers fall into four broad categories: companies that consume products or services. So what are the meaningful differences between B2B and B2C marketing? A B2C sale is to an individual.S. who buy gauges to put in their cars. divisional brands and product/service brands and to apply your brand standards to material often considered “informal” such as email and other electronic correspondence. That individual may be influenced by other factors such as family members or friends. Jerome McCarthy in 1960. institutions. “demographic” for segmenting businesses) such as business size. The second category. spending more than $300 billion annually.

The Business Marketing Association is the trade organization that serves B2B marketing professionals. There may be multiple influencers on the purchase decision. It was founded in 1922 and offers certification programs. branding. and interactive services such as website design and search engine optimization. analysts. blogs and retail/wholesale outlets tend to be fairly common to each industry/product area. public relations. the promotion plan almost writes itself (depending on your budget) but figuring it out can be a special skill and it takes time to build up experience in your specific field. Positioning Statement An important first step in business to business marketing is the development of your positioning statement.Quite often. Regardless of the size of the target market. Specific trade shows. Promotion techniques rely heavily on marketing communications strategies (see below). both procedurally and in terms of how they value what they are buying from you. Pricing The business market can be convinced to pay premium prices more often than the consumer market if you know how to structure your pricing and payment terms well. publications. conferences. research services. Place (Sales and Distribution) The importance of a knowledgeable. which may also have to be marketed to. the business customer is making an organizational purchase decision and the dynamics of this. the target market for a business product or service is smaller and has more specialized needs reflective of a specific industry or niche. differ dramatically from the consumer market. trade show support. direct mail. experienced and effective direct (inside or outside) sales force is often critical in the business market. B2B marketing communications tactics generally include advertising. If you sell through distribution channels also. Promotion Promotion planning is relatively easy when you know the media. information seeking and decision making habits of your customer base. industry awards and training programs. This price premium is particularly achievable if you support it with a strong brand. though they may not be members of the decision making unit. What this means is that once you figure it out for your industry/product. sales collateral. B2B Marketing Communications Methodologies The purpose of B2B marketing communications is to support the organizations' sales effort and improve company profitability. . not to mention the vocabulary unique to their segment. the number and type of sales forces can vary tremendously and your success as a marketer is highly dependent on their success. This is a statement of what you do and how you do it differently and better and more efficiently than your competitors.

supported by a number of secondary messages.make sure the entire organization is geared up to handle the inquiries appropriately. and make sure you have all the infrastructure in place to support each stage of the marketing process . each of which may have a number of supporting arguments. Dwyer and Tanner (2006) say the purchases made by companies. Canada and France." For example. Typical elements to an agency brief are: Your objectives. measure your impact upon your desired objectives. you’re not in the business of developing marketing campaigns for marketing sake. product. After all. be it Cost Per Acquisition. Briefing an agency A standard briefing document is usually a good idea for briefing an agency. The BMA study breaks that spending out as follows (figures are in billions of dollars): • Trade Shows/Events -. campaign description. As well as focusing the agency on what's important to you and your campaign. it serves as a checklist of all the important things to consider as part of your brief. they note that companies such as GE. target audience. So always put metrics in place to measure your campaigns. There is usually a primary message that conveys more strongly to your customers what you do and the benefit it offers to them.and that doesn't just include developing the lead . How big is business marketing? Hutt and Speh (2001) note that "business marketers serve the largest market of all." A 2003 study sponsored by the Business Marketing Association estimated that business-tobusiness marketers in the United States spend about $85 billion a year to promote their goods and services. graphical considerations. corporate guidelines. government agencies and institutions "account for more than half of the economic activity in industrialized countries such as the United States. Cost per Lead or tangible changes in customer perception. Measuring results The real value in results measurement is in tying the marketing campaign back to business results. Building a campaign plan Whatever form your B2B marketing campaign will take. the dollar volume of transactions in the industrial or business market significantly exceeds that of the ultimate consumer market. your product positioning. and any other supporting material and distribution. DuPont and IBM spend more than $60 million a day on purchases to support their operations. facts and figures.Developing your messages The next step is to develop your messages.$17.3 . build a comprehensive plan up front to target resources where you believe they will deliver the best return on investment. and if at all possible. target market.

Technology and business strategy go hand in hand. Marketing is taking the entrepreneurial lead by finding market segments. flexibility.5 Direct Mail -. A large part of that has to do with the Internet. partnerships and alliances are what define marketing today. models and concepts. They're also moving away from the mass market and the preoccupation with the transaction.9 Magazine Advertising -. Relationships. Today. speed. Dwyer and Tanner (2006) note that business marketers not only use the Internet to improve customer service but also to improve opportunities with distributors.000 members in 19 chapters across the country.2 Market Research -.$9. distribution and customer service. according to Morris.• • • • • • • • • • Internet/Electronic Media -.4 Directories -. Technology is changing at an unprecedented pace. BMA traces its origins to 1922 with the formation of the National Industrial Advertising Association.$10. Second is the entrepreneurial revolution. The third revolution is one occurring within marketing itself.8 Publicity/Public Relations -. theories. aggressiveness and innovativeness are the keys to remaining competitive today. has more than 2. To stay competitive. Adaptability.$10. the business strategy is also helpful in technology development.1 The fact that there is such a thing as the Business Marketing Association speaks to the size and credibility of the industry.4 Dealer/Distributor Materials -. Companies are looking beyond traditional assumptions and adopting new frameworks.$2. which is discussed in more detail below. many companies have downsized and reinvented themselves.$1. What's driving growth in B2B Marketing? The tremendous growth and change that business marketing is experiencing is due in large part to three "revolutions" occurring around the world today.$5. The cookie-cutter approach is out.$10.$3. First is the technological revolution. Both are corelated .5 Promotion/Market Support -.4 Other -. Among its members are marketing communications agencies that are largely or exclusively business-to-businessoriented. The impact of the Internet The Internet has become an integral component of the customer relationship management strategy for business marketers.8 Telemarketing -.While technology supports forming organization strategy. BMA. untapped needs and new uses for existing products.$5. Pitt and Honeycutt (2001). and by creating new processes for sales. headquartered in Chicago. Both play a great role in business marketing.$12. . Companies are customizing marketing programs to individual accounts. and these changes are speeding up the pace of new product and service development.

Thus was born what then was the world's largest Internet business when Ford's Auto-Xchange and GM's TradeXchange merged. and its members have combined sales of about $1 trillion. are search engine companies that also function as brokers. General Motors and DaimlerChrysler entering into a joint venture? That's exactly what happened after all three of the Big Three began moving their purchases online in the late 1990s. or middlemen. They charge companies fees to find information on the Web as well as for banner and pop-up ads and search engine optimization services. . including Agentrics. in the business marketing world. For example. others have. Hutt and Speh (2001) note that such virtual marketplaces enable companies and their suppliers to conduct business in real time as well as simplify purchase processes and cut costs. Agentrics serves more 50 retailers around the world and more than 300 customers. with DaimlerChrysler representing the third partner. a decade ago who would have imagined Ford. While this exchange did not stand the test of time.According to Anderson and Narus (2004). multivendor and multiservice marketspace in return for commissions on sales. such as Google and Yahoo. Infomediaries. All three companies were pursuing their own initiatives when they realized the economies of scale they could achieve by pooling their efforts. Metamediaries are companies with robust Internet sites that furnish customers with multiproduct. the Internet ushered in an enthusiasm for collaboration that never existed before--and in fact might have even seemed ludicrous 10 years ago. With the advent of b-to-b exchanges. or GNX. which was formed last year with the merger of WorldWide Retail Exchange and GlobalNetXchange. two new types of resellers have emerged as byproducts of the Internet: infomediaries and metamediaries.