3 - Understanding Industrial Markets
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Transcript of 3 - Understanding Industrial Markets
Understanding IndustrialUnderstanding Industrial
Markets :Markets :
It’s Nature, Systems andIt’s Nature, Systems and
EnvironmentEnvironment
Value Chain FlowValue Chain FlowRaw Material, Spare Parts and Raw Material, Spare Parts and
Semi finished MaterialSemi finished Material
Sale of Capital Goods, SuppliesSale of Capital Goods, Supplies and andConsumer Goods to Households,Consumer Goods to Households,
Govt.,Govt., Business & Insts. And ExportersBusiness & Insts. And Exporters
ManufacturingManufacturingIndustriesIndustries
OEM --- Other Indust.OEM --- Other Indust.
Nature of Industrial Nature of Industrial MarketingMarketing
Three Broad Divisions of EconomyThree Broad Divisions of Economy
ManufacturingAnd AlliedIndustries
ConsumingUnits
ExtractiveIndustries
Product Flow DiagramProduct Flow Diagram
ManufacturingAnd AlliedIndustries
Manufacture/Setup/Create/
Sale toOther
Manufactures
ConsumingUnits
Households
Govt.
Other Business
Users
Exporters
ExtractiveIndustries
Farms
Mines
Forests
Fisheries
ENVIRONMENAL TIERSENVIRONMENAL TIERS
Internal
Customers
Competitors
Industry
Macro Macro
Types of EnvironmentTypes of Environment
Ecological and physicalEcological and physical
- Air and Water Pollution- Air and Water Pollution
- Solid Waste Disposal- Solid Waste Disposal
- Conserving Natural - Conserving Natural ResourcesResources InternalInternal ExternalExternal
- - MicroMicro
- Macro- Macro
MICRO / MACRO ENVIRONMENTMICRO / MACRO ENVIRONMENT
COMPANY
New Entrants
Suppliers Substitutes
Rival Firms Buyers
Government’s RoleGovernment’s Role Regulating AgenciesRegulating Agencies
Laws / PoliciesLaws / Policies
Programme FundingProgramme Funding
Research FundingResearch Funding
Import / Export RegulationImport / Export Regulation
Levying TaxesLevying Taxes
Controlling Interest RatesControlling Interest Rates
Providing Social ProgrammesProviding Social Programmes
Environment ScanningEnvironment Scanning
Gathering and MonitoringGathering and Monitoring Information Information
On Customers and CompetitorsOn Customers and Competitors through Marketing and Sales through Marketing and Sales StaffStaff
Analyzing Trade and Govt.Analyzing Trade and Govt. Publications Publications
Carrying out Market ResearchCarrying out Market Research and Market Forecasting and Market Forecasting
Environment MonitoringEnvironment Monitoring
Understand Changes in Understand Changes in CustomerCustomer Needs Needs Monitor Competitors’ Actions Monitor Competitors’ Actions andand Strategies Strategies Identify Technological Identify Technological InnovationsInnovations Changes in Govt. Policies, LawsChanges in Govt. Policies, Laws Changes in Major Customers Changes in Major Customers andand the Total Market the Total Market Changes in Environmental Changes in Environmental FactorsFactors
Gordon E.Miracle’s Gordon E.Miracle’s Qualitative CategorizationQualitative Categorization
Cost of Cost of ProductProduct
VL L M H VL L M H VHVH
Significance Significance totoThe BuyerThe Buyer
VL L M H VL L M H VHVH
Technical Technical ComplexityComplexity
VL L M H VL L M H VHVH
TechnologicalTechnologicalChange Change FrequencyFrequency
VL L M H VL L M H VHVH
After Sales After Sales Service Service
VL L M H VL L M H VHVH
Gordon E.Miracle’s Gordon E.Miracle’s Qualitative CategorizationQualitative Categorization
Purchase Purchase FrequencyFrequency
VL L M H VL L M H VHVH
Speed or Speed or RateRateof Usageof Usage
VL L M H VL L M H VHVH
Variety of Variety of NeedsNeedsto be Satisfiedto be Satisfied
VL L M H VL L M H VHVH
Extent of EffortsExtent of Effortsto Get the to Get the ProductProduct
VL L M H VL L M H VHVH
Some ExamplesSome Examples
Very Low Iron Ore, Coal, Lime Very Low Iron Ore, Coal, Lime StoneStone
Low Alumina, Pig Iron,Low Alumina, Pig Iron, Kerosene Oil Kerosene Oil
Medium Tire and Tubes Medium Tire and Tubes
High Motors, High Motors, Compressors,Compressors, Pumps, Bulldozers Pumps, Bulldozers
Very High Fork Lifts, Lathe Very High Fork Lifts, Lathe Machines,Machines, Fabricated and Fabricated and CapitalCapital Equipments, Equipments, SoftwareSoftware
Classification of Classification of Industrial ProductsIndustrial Products
Major Equipments and materialsMajor Equipments and materials
Accessory EquipmentsAccessory Equipments
Fabricating or Component PartsFabricating or Component Parts
Process MaterialProcess Material
Operating Supplies Operating Supplies
Operating servicesOperating services
Major Equipments and Major Equipments and MaterialsMaterials
● ● Large Machines or Other ToolsLarge Machines or Other Tools● ● Charged to Capital AccountCharged to Capital Account
●● Two types :-Two types :-1.1. Multipurpose or Standard Multipurpose or Standard
machines example Dyes in machines example Dyes in Stamping MachineStamping Machine
2.2. Special Duty or Single Purpose Special Duty or Single Purpose Machine : Grinding MachineMachine : Grinding Machine
Accessory EquipmentsAccessory Equipments
● ● Machinery used in Auxiliary Machinery used in Auxiliary CapacityCapacity
● ● Cost is Generally Charged to Cost is Generally Charged to CurrentCurrent Expenses Expenses
● ● Horizontal DemandHorizontal Demand Small latheSmall lathe Fractional Horse power motorsFractional Horse power motors Small TractorsSmall Tractors Fork Lifts Fork Lifts
Fabricating or Component Fabricating or Component PartsParts
The work is carried on by a series of The work is carried on by a series of plants, often under diverse plants, often under diverse ownership, each performing a single ownership, each performing a single operation or homogeneous group of operation or homogeneous group of operations on the material.operations on the material.
Example:-Example:-
Batteries and tires in automobile Batteries and tires in automobile industryindustry
Fabricating or Component Fabricating or Component PartsParts
● ● On the Basis of SpecificationsOn the Basis of Specifications
● ● Long Term Supply CommitmentLong Term Supply Commitment
● ● Uniformity and Reliability of QualityUniformity and Reliability of Quality
● ● Strict Delivery ScheduleStrict Delivery Schedule
● ● Retain Their Identity in FinishedRetain Their Identity in Finished Products Products
● ● Large Replacement MarketLarge Replacement Market
Process MaterialProcess Material
Form an Un-Distinguished Part ofForm an Un-Distinguished Part of Finished Product Finished Product
Broken up and Dissipated in theBroken up and Dissipated in the Production Process Production Process
CatalystCatalyst
Binding agentsBinding agents
FlavoursFlavours
PreservativesPreservatives
Operating SuppliesOperating Supplies
Do not Become Part of Finished Do not Become Part of Finished ProductProduct
Continuously Worn out or Used upContinuously Worn out or Used up
Needed by Many Different IndustriesNeeded by Many Different Industries
Bought in Small QuantitiesBought in Small Quantities
Purchased in a Routine MannerPurchased in a Routine Manner
StandardizedStandardized
MRO (Maintenance, Repair andMRO (Maintenance, Repair and Operating) Items Operating) Items
Operating SuppliesOperating Supplies
PaintsPaints
SoapsSoaps
OilsOils
GreasesGreases
PencilsPencils
Type WriterType Writer
Stationary paper etcStationary paper etc
Operating servicesOperating services
Building MaintenanceBuilding Maintenance
AuditingAuditing
Legal ServicesLegal Services
Courier Services etcCourier Services etc
Major Industrial SuppliersMajor Industrial Suppliers
Machine Tool ManufacturersMachine Tool Manufacturers
Mill Industries – Steel, Aluminum,Mill Industries – Steel, Aluminum,
Pulp, CopperPulp, Copper
Processing Plants, RefineriesProcessing Plants, Refineries
Fabricators, Spare Part SuppliersFabricators, Spare Part Suppliers
Industrial Service OrganizationsIndustrial Service Organizations
Thank YouThank You