Industrial Marketing

Producing or selling a good or service to

be reused in the production of other goods or
services that will be resold

1. Packaging machines
2. Packing
3. Semi-finished goods for the car sector
4. Electronic components
5. Construction material
6. Paper products
7. An empty soft drink can and bottle
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 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.
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 The Marketing Concept

Creating value for customers with goods

and services that address organizational
needs and objectives.

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 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.
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Raw Material Extraction

Material Processing

Manufacturing
Parts/Subassembly

Facilitators
Assembly

Distribution

Wholesale/Retail Trade

Final Consumers
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Firms in Production Chain
Industrial Consumer Behaviour
Decision making process by which formal
organisations search, select, evaluate and
purchase products, services and ideas to
meet organisational needs.

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So whats different about B2B?
The technical characteristics of the
product are important.
The customer is an organization rather
than an individual consumer, or family.
These products directly affect the
operations and economic health of the
customer.

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 Unique Features of Industrial
Products/Services
More complex
Functional vs. Symbolic Attributes
Large unit dollar value/Large quantities
Custom/Tailored
Various Stages from raw material to
finished goods.
Foundation, Entering, Facilitating Goods
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 Types of Industrial Product
Materials and Parts
Raw Materials
Farm Products: Wheat, Cotton, Fruits, Vegetables
Natural Products: Petroleum, Iron ore, Wood
Manufactured Materials and Parts: Component
materials and Parts
Capital Items
Installations: Factories, bottling plant, elevators
Equipments: Computers, drill machines
Supplies and Business Services: maintenance
and repair, consultancy
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Types of Industrial Consumers

Manufactures
Manufactures and Service
Organisations
Industrial Distributors

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 Classification of Industrial
Buyer
Loyal Buyer
Opportunistic Buyer
Best-deal Buyer
Creative Buyer
Advertising Buyer
The Defrauder Buyer
Nuts-and-bolts Buyer
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 Marketing Activities
Identify customer needs
Research customer behavior
Divide market into manageable segments
Develop new products/services
Establish/negotiate prices
Deliver, install, service products
Ensure adequate and timely supply of products at
correct place
Allocate resources across product lines
Communicate with customers
Evaluate/control marketing programs
Post purchase relationships 13
Industrial vs. Consumer marketing
Market structure:
Geographically concentrated
Relatively few but larger buyers
Oligopolistic markets
Vertical/Horizontal markets
Demand Patterns
Derived demand
Inelastic demand
Fluctuating demand
Bull-whip effect
Product characteristics
Technical complexity
Customized
Service, delivery and availability are very important
Promotions:
Emphasis on personal selling
More direct marketing 14
Industrial vs. Consumer marketing
Buyer Behaviour:
Functional /group involvement
Rational/task motives predominate
Technical expertise
Stable relations
Interpersonal relationship
Buying patterns
Formality
Complexity
Multiple suppliers
Large orders
Direct buying
Lengthy negotiations
Importance of post purchase service
Reciprocity
Channel characteristics
More direct
Fewer intermediaries/ middle men 15
 Participants in Industrial
Buying (Buying Centre)
Joint decision making process
Decision making unit (DMU)
Top Management or Experts or
Consultants

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 Functional Roles
Gatekeeper
Initiator
User
Influencers
Deciders
Aprovers
Buyers

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Factors influencing industrial
buying
Environmental
Organizational
Interpersonal
Individual

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Types Of Buying Decisions
(Buying Situations)

New Task
Modified Rebuy
Straight Rebuy

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 Buying Motives
Efficiency-performance, increased Capacity
Economy in money, use and time
Speed, strength, durability, loss protection, purity
Increased saleability of final product
Ease in operations
Space saving
Safety to employees clients and customers
Cleanliness in plant, product and workmen
Cost saving, post sales service, delivery speed
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Basic methods and Practices in
Industrial Buying
Inspection
Sampling
Description (Specification)
Negotiated Contracts

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