You are on page 1of 19

The Unique Nature of Industrial Marketing

Industrial Marketing
Also called: Business-to-Business (B2B) and Organizational Marketing.
Definition: the creation and management of mutually beneficial relationships between organizational suppliers and organizational customers. Customer can be private firm, public agency, or nonprofit organization.
2

The Marketing Concept


Creating value for customers with goods and services that address organizational needs and objectives.

Marketing Concept
Three major components:
All company activities should begin with, and be based on, the recognition of a fundamental customer need. A customer orientation should be integrated throughout the functional areas of the firm: production, engineering, finance, R&D. Customer satisfaction is viewed as the means to long-term profitability goals.
4

Strategic Focus Grid


High

Follower
Customer Focus Isolate
Low Low

Interact

Shaper

Technology Focus

High
5

Market Orientation
Acquire intelligence from the external environment.
Disseminate that intelligence throughout the organization. Respond to the intelligence: take action.
(Kohli and Jaworski 1990, Journal of Marketing)

Consumer Markets and Consumer Buyer Behavior

Learning Goals
1. Learn the consumer market and construct model of consumer buyer behavior 2. Know the four factors that influence buyer behavior 3. Understand the types of buying decision behavior and stages in the process 4. Comprehend the adoption and diffusion process for new products

Definitions
Consumer buyer behavior refers to the buying behavior of final consumers individuals and households who buy goods and services for personal consumption All of these final consumers combine to make up the consumer market

Characteristics Affecting Consumer Behavior


Key Factors
Cultural Social Personal Psychological
Culture Forms a persons wants and behavior Subculture Groups with shared value systems Social Class Societys divisions who share values, interests and behaviors

Characteristics Affecting Consumer Behavior


Key Factors
Cultural Social Personal Psychological
Groups Membership Reference Aspirational Opinion Leaders Buzz marketing Family Many influencers Roles and Status

Characteristics Affecting Consumer Behavior


Key Factors
Cultural Social Personal Psychological
Age and life cycle Occupation Economic situation Lifestyle Activities, interests and opinions Lifestyle segmentation Personality and self-concept

Characteristics Affecting Consumer Behavior

Brand Personality Dimensions


Sincerity Ruggedness Excitement Competence

Sophistication

Characteristics Affecting Consumer Behavior Key Factors


Cultural Social Personal Psychological
Motivation Perception Learning Beliefs and attitudes

So whats different about B2B?


Marketing Concept Marketing Mix Market Segmentation Product Life Cycle All apply in both B2C and B2B.
15

So whats different about B2B?


The technical characteristics of the product are important.
These products directly affect the operations and economic health of the customer. The customer is an organization rather than an individual consumer, or family.
16

Five Major Differences Between B2B and B2C


Products/Services being marketed Nature of demand How the customer buys Communication process Economic/Financial factors
17

Raw Material Extraction

Material Processing Manufacturing Parts/Subassembly Assembly Distribution Facilitators

Wholesale/Retail Trade

Final Consumers
18

Firms in Production Chain

19