INDUSTRIAL MARKETING

Industrial marketing consists of all activities involved

in the marketing of products and services to
organizations which may be commercial, profit or non
profit institutions, government agencies or resellers
that use products or services in the production of
consumer or industrial good and service, and to
facilitate the operations of the enterprise.
There can be four different types of exchanges in
industrial marketing
 . Product exchange .
 . Information Exchange .
 .Financial Exchange .
 Social Exchange .
COMPARING & CONTRASTING INDUSTRIAL
VS CONSUMER MARKETING:
 Industrial Markets Consumer Markets
 1. Market Structure Geographically Concentrated. Geographically
Dispersed.

 Oligopolistic Competition Monopolistic

competition.
 Products Technical Complexity
 Customized Standardized.
 Service very important Service somewhat important.
 Buyer Behavior Functional Involvement Family Involvement.
 Interpersonal Relationship No personal Relationship.
 Decision Making Distinct observable stages. Unobservable mental stages.
 Channels Shorter & Direct Indirect & multiple
linkages.
 Promotion Emphasis on Personal Selling Emphasis on Advertising
 Price Competitive Biddings List Prices
 and Negotiating.
Industrial Marketing Strategy
Components
Product Planning and Development
 1. Product from that of competitors as viewed by
customers.
 2. Offer only one product and try to attract all buyers
(i.e., use an "undifferentiated" strategy)
 3. Develop separate products and marketing
programs for each market segment (i.e., use
differentiated" strategy).
 4. Create new uses for existing products [through
improved performances and/or exclusive features
 5. Diversify into new markets with new products.
 6. Establish product leadership through development
of quality products
Distribution
 1. Warehouse products at locations
that enable quick delivery to each
distributor and customer
 2. Provide additional outlets to reduce
distribution cost per sale.
 3. Use only one warehouse to
minimize inventory control problems
Sales / Service
 1. Expand geographic area of operations to penetrate high
potential regions not currently approached
 2. Reshape distribution channels (i.e. dealers, distributors,
agents, and company sales force) to satisfy market-buying
preferences more closely.
 3. Develop more competent sales force and/or
dealer/distributor organization.
 4. Require sales force to improve its knowledge of
customers and their products.
 5. Employ target marketing to identify and reach high-
potential customers and prospects.
 6. Minimize reciprocal purchases with suppliers where
prudent.
 7. Increase sales effort on most profitable products and
customers.
Advertising/Promotion
 . Employees "push" strategy to encourage dealers,
distributors, and company sales force to move your
product lines (good margins, bonuses. services,
advertising. and promotional subsidies
 2. Employ pulls strategy to stimulate customer
demand through increased brand concept and product
acceptance.
 3. Maximize advertising and promotion coverage to
increase volume, which will permit mass production
and distribution.
 4. Address advertising and promotion to key
customers and "best" prospects to maximize the
benefits of these expenditures in a limited market
segment.
Pricing
 1. Set low, price for new products to discourage
competitive entry into market.
 2. Set low, price for products to encourage high sales
volume which permits mass production and low cost
unit
 3. Provide minimum "extra" services to permit lower
prices.
 4. Price parts service, and repairs at cost or with
slight markup to gain maximum good will
 5. Price products to obtain principal profit on original
sale rather than on follow-up service and parts_ Offer
quantity discounts to encourage larger unit
purchases.
Industrial Buying Behavior
 Recognition of a need
 Confirmation of the need
 Agreement on specifications
 Recommendations as to supplier
 Purchase authorization and
 Placing of the order