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INDUSTRIAL MARKETING

INDUSTRIAL PRODUCT (Defn)
It is the Product or Service which is offered to Manufacturing, Trading or Service Organisations or to Professionals or Professional Institutions for their use in functioning towards their business objective/s.

Marketing Application & Practices

INDUSTRIAL MARKETING
INDUSTRIAL MARKETING (Defn)
It refers to the process of marketing such industrial products or services

HOW IS IT DIFFERENT ?
(a) (b)

Focused more on relationship Approach differs for each market

Marketing Application & Practices

 Prices Marketing Application & Practices .INDUSTRIAL MARKETING INDUSTRIAL PRODUCTS   Core Product : functional performance Augmented Product : peripheral product  Additional features  Packaging  Sales Promotion  Before / After Sales Service  Company Reputation  Availability / Reliability of delivery commit.

INDUSTRIAL MARKETING CLASSIFICATION OF INDUSTRIAL GOODS  Equipments : Equip organisations for their stated purpose  Materials & Supplies : Used in Production for resale  Services : Facilitate the functioning of the organisation Marketing Application & Practices .

Manufacturing.G. Larger buyers 3. finance. transportation. communication etc. mining. rented or supplied to others E. banking. Key characteristics Few buyers 2. Close supplier 1. customer relationship Marketing Application & Practices . construction.INDUSTRIAL MARKETING Includes all organisations that acquire goods & services used in production of other products or services that are sold.

INDUSTRIAL MARKETING CUSTOMERS Various types : 1. Non-profit organisation Are they different from end consumer ?  Less emotional  Focus is economy Marketing Application & Practices . Government units 4. Middlemen 3. Producers of goods & services 2.

INDUSTRIAL MARKETING MARKET SEGMENTATION It refers to offering different products. promotion and / or support services to different customer segments  When all elements of Marketing Mix are differentiated for each market segment. distribution. Marketing Application & Practices . you have a perfect Segmentation strategy. prices.

What is brought ?  Type of Product  Range of Product     Full Line / Niche What need does the Product satisfy Std Product / variance / Non Std Capital Goods / Consumables High Value / Low Value Marketing Application & Practices .INDUSTRIAL MARKETING MARKET SEGMENTATION OF INDUSTRIAL PRODUCTS 1.

Who buys it ?  Offices / Manufacturing Industries / Service Industries / Professionals  Type of Industry / Service  Geographical location  Customer Govt / Public / Private  Size of Customer  Heavy User / Light User Marketing Application & Practices .INDUSTRIAL MARKETING MARKET SEGMENTATION OF INDUSTRIAL PRODUCTS 2.

g. Durability etc Marketing Application & Practices . Why is it bought ?  Price Lowest / Value for Money / Premium Product  Technology Latest / Proven  Aspects determining Customer s perception of quality e. Aesthetics.INDUSTRIAL MARKETING MARKET SEGMENTATION OF INDUSTRIAL PRODUCTS 3.

3.O. 7. 5. Operators ( ease of use) User dept (Up time) Maintenance dept ( less / no maintenance) R & D dept ( Technology ?) Materials / Purchase (Cost / delivery) Finance dept (actual cost) Personal ( how safe is product) C. 6. ( value for money) Marketing Application & Practices .INDUSTRIAL MARKETING INTERNAL CUSTOMERS 1.E. 4. 2. 8.

Buyer / purchaser 5. Decision maker/s 4.INDUSTRIAL MARKETING Buying chain members Gatekeeper/s 2. User The composition of above members is also known a buying center Period for purchase in Industrial marketing varies from a day to several months 1. Marketing Application & Practices . Influencer/s 3.

3. 2.INDUSTRIAL MARKETING THE BUYING PROCESS 1. Recognition of Need receipt of requisition Make or Buy Decision Purchase  From single supplier On the basis of past purchase On the basis of fresh negotiations  From multiple suppliers On the basis of past purchase On the basis of fresh negotiations On the basis of Tenders Marketing Application & Practices .

Tenders :    Open (Advertised / Public Openings) Closed (Advertised / No public opening) Limited (By invitation only) Integrity Meeting / Exceeding Specs Quality Delivery Time Pre / After Sales Service Company Reputation Commercial Terms Marketing Application & Practices 5. Selection among Supplier        .INDUSTRIAL MARKETING THE BUYING PROCESS 4.

INDUSTRIAL MARKETING THE BUYING PROCESS 6. Information Sources :  Own company record  Other company reference / Published literature  Catalogues / Exhibitions / Seminars / Presentations 7. Placement of Order Order Follow up Receipt & Inspection of Products & Documents Payment Marketing Application & Practices . 10. 8. 9.

INDUSTRIAL MARKETING Buyer    Seller Relationship More of partnership Mutual trust Long term outlook Closely tied firms often work at lower total costs simply by reducing the risks & uncertainties Marketing Application & Practices .

INDUSTRIAL MARKETING Lower prices are possible with :    Back to back understanding Annual rate contract Large volumes 5 key dimensions that help buyer & seller relationships : 1. 3. 4. Co operation Information sharing Operational linkages Legal bonds Relationship specific adaptations Marketing Application & Practices . 2. 5.

INDUSTRIAL MARKETING Co Operation efforts treats problem as joint responsibility Information sharing could be risky Operational linkages may help in reducing the total inventory cost Powerful customers may control relationship Buyers may look for other sources to reduce risks Reciprocity may influence relationship in big way Marketing Application & Practices .

8. 3. 9. Telephone Directory / Yellow Pages Trade Directories / Publications Journals Press Advertising Direct Marketing Tele Marketing Catalogue / Company Literature Seminars / Exhibitions Give Away Marketing Application & Practices . 2. 4. 5.INDUSTRIAL MARKETING TYPES OF PROMOTION 1. 7. 6.

7. 5. 6. 2. 3. 4. A declining volume of sales A falling rate of profit A declining share of the market The appearance of a substitute that represents an improvement An increase in cost of production A declining market The need for constant executive attention to prevent loss Marketing Application & Practices .INDUSTRIAL MARKETING FACTORS INDICATING PRODUCT DELETION 1.

Visit to vendor works 4. Data analysis 3.INDUSTRIAL MARKETING Vendor approval / classification Data gathering 2. Vendor approval / registration 5. Marketing Application & Practices . Vendor classification This helps in limiting the competition for each type of product category Unless vendor is approved the process of sale cannot start 1.

TASK MODIFIED STRAIGHT BUYING RE-BUY RE-BUY HIGH HIGH HIGH HIGH MEDIUM SOME SOME MEDIUM LITTLE LITTLE NONE LITTLE CHARACTERISTICS TIME REQUIRED MULTIPLE INFLUENCE REVIEW OF SUPPLIER INFORMATION REQUIRED Marketing Application & Practices .INDUSTRIAL MARKETING ORGANISATION BUYING PROCESS TYPE OF PROCESS NEW .

Channel reach ± selling support 3. Easy Payment 7. Faster Order Execution 6. Better Pre-sales/After sales service Marketing Application & Practices . Channel¶s influence 4. Faster response 5. Cost of Contacting Customers 2.INDUSTRIAL MARKETING DISTRIBUTION WHY REQUIRED ? 1.

Wholesaler 3. Sales Agent 2. Authorised Service Center 5.INDUSTRIAL MARKETING DISTRIBUTION TYPES OF CHANNELS 1. Retailer 4. C & F / Storage Marketing Application & Practices .

3. 2.INDUSTRIAL MARKETING KEY PERFORMANCE INDICATORS OF SALES ACTIVITIES 1. Sales / Target (%) Orders / Quotations (%) Margins / Sales (%) Cost of Sales / Sales (%) Sales Value / Number of Order (%) Orders / Calls (%) Key Account Contact New Customer Orders / Orders Marketing Application & Practices . 7. 5. 4. 6. 8.

3. 4.) Calls per day / Face to face time New Prospects called Credit Orders / Total Orders (%) Calls to build Customer Relationship 5. Discounts / Sales (%) 6. Marketing Application & Practices . 2. Timely Submission of reports 7.INDUSTRIAL MARKETING KEY PERFORMANCE INDICATORS OF SALES ACTIVITIES (cont. Timely submission of Itineraries 1.

Are the negotiators interested in compromise trading value for value ? 3. Do they trust each other. Is the issue negotiable 2. Do they have the authority to come to an agreement ? Marketing Application & Practices .INDUSTRIAL MARKETING NEGOTIATION Defn : Negotiation is the process of determining what the other side really desires and reaching an agreement so that they get what they want while you get what you want Pre Requisites : 1. at least to some extent 4.

problem solving) Modified Win Win (Both feel they have won) 5 P s of Negotiation :  Positive attitude The will to succeed  Preparation before negotiation  Problem solving approach  Probing during negotiation  Promote yourself.INDUSTRIAL MARKETING NEGOTIATION Styles of Negotiation :      Lose Lose (No desire for agreement) Win Lose (Competitive) Lose Win (Lose now for future) Win Win (Co operative. company & product Marketing Application & Practices .

INDUSTRIAL MARKETING NEGOTIATION Crucial Factors :        Information / preparation required Evaluating bargaining power Opening the Negotiation Rules of Conduct Handling difficult personality types Understanding devious negotiation tactics Follow .up Marketing Application & Practices .