What is Industrial sales?

B2 B Marketing
Institutional sales
Government
 Salient Features
• Fewer buyers • Fluctuating demand
• Large buyers • Professional purchasing
• Closer customer - • Several buying
supplier relationship influences
• Geographical • Multiple sales calls
concentration of buyers • Direct purchasing
• Derived demand • Reciprocity
• Inelastic demand • 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 • Approvers
• Users • Buyers
• Influencers • Gatekeepers
• Deciders
 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