HBR

Scope and Challenge of B2B Marketing

Presentation by Narayanan Palani, PGDM (Exec)’2011-12

Products Sold in industrial markets are usually classified as:

• Heavy Equipment• Light Equipment• Systems• Raw Materials• Processed Materials• Consumable Supplies• Components• Services

Aspects Distinguishing Industrial Marketing/1

• The External Linkages• Derived Demand• Complex Buying/ Selling Process– The influence of the formal organization– The strategic importance of the item being

purchased– The cost of the item being purchased– The complexity of the need being serviced

• Concentrated customer base

Aspects Distinguishing Industrial Marketing/2

• The Internal Linkages– Emphasis on Technology– High level of customization– Order fulfillment mechanism

• Management Challenges• New Product Commercialization• Market Segmentation• Product Policy/Pricing

Aspects Distinguishing Industrial Marketing/3

• Channels of Distribution– An Industrial marketer will prefer a direct sales

force to external channels when,– There is a manageable number of customers– The purchase value is significant– Customers are concentrated geographically– The sales process is long and complex– Customers require a lot of information and

training in product use

Aspects Distinguishing Industrial Marketing/4

• Cross Functional and Interdepartmental coordination:– Large customers may be served by a joint team of sales as

well as technical people– There is a heavy emphasis on teamwork in industrial

marketing• Marketing Social Responsibility:

– Increased concern in environmental issues like pollution, waste, global warming

– Product design must include creative ways to use recycled parts and components.

– Business mission should address the society needs