INDUSTRIAL MARKETING Chapter 1

LEARNING OBJECTIVES
To know what is Industrial (or business to business) Marketing?
To know what are the differences in the characteristics of Industrial and Consumer
Marketing
To learn why the demand for Industrial goods and services are generally called
“derived demand”
WHAT IS INDUSTRIAL MARKETING?
Industrial or Business to Business Marketing is the marketing of products and services
to business organizations. Business (or Industrial) organizations include manufacturing
companies, government undertakings, private sector organizations, educational
institutions, hospitals, distributors, and dealers.
Business organizations buy products and services to satisfy many objectives like
production of other goods and services , making profits, reducing cost and so on.
CONSUMER MARKETING
Consumer marketing is the marketing of products and services to individuals, families
and households. The consumers buy products and services for their own consumption.
DERIVED DEMAND
JOINT DEMAND
Joint demand is common in the industrial market because it occurs when one industrial
product is useful if other product also exists. For example, a pump-sets cannot be
used for pumping water, if the electric motor or diesel engine is not available.
Similarly, the department of telecommunication, which requires a complete kit,
consisting of different items, for joining the under ground telecom cables, cannot buy
only some of the items from a supplier as it does not completed the kit. Thus, some
industrial products do not have industrial demand, but are demanded only if the
other products are available from the industrial supplier.
JOINT DEMAND EXAMPLE
CROSS ELASTICITY OF DEMAND
Cross elasticity of demand is the responsiveness of the sales of one
product to a price change in another. It can have a dramatic impact on
the marketing strategy of an Industrial firm. ... The more negative this
relationship the more closely the demand for the products is related.
CROSS ELASTICITY EXAMPLE
THANK YOU