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Understanding IndustrialUnderstanding Industrial
MarketingMarketing
Role of Products & Services
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Consumer Goods and Services
- are for consumers, the final customer
Industrial Goods and Services
- are used in making consumer goods and services
Consumer Vs Industrial Goods and Services
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Individuals and organizations that acquire goods and
services to be used, directly or indirectly, in the
production of other goods and services or to be
resold.
Industrial Market / BUSINESS PRODUCTS
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Various Classes of ConsumerVarious Classes of Consumer
and Industrial Goodsand Industrial Goods andand
ServicesServices
eg. newspaper
eg. Mac's Milk
Convenience Goods
eg. groceries
eg. clothing
Shopping Goods
Consumer Goods
eg. travel
eg. banking
Specialty Services
eg. fast foods
Convenience Services
Consumer Services
raw material
grain, steel
eg. wiring
harness
eg. circuit board
component
parts
materials
nuts, bolts
Production Goods
Industrial Goods
accessory equipment
tools, computers
eg. buildings
installations
Support Services
Industrial Services
Goods and Services
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Industrial vs Consumer marketIndustrial vs Consumer market
Industrial market Consumer marketMarket Size Fewer Buyers Mass market
Products Technical Complexity Standardized
Buyer Behavior Rational/Task motives Social/Psychologicalmotives
Decision making Complexed & shared Simple may beindivualized
Channels Shorter, more direct Multiple linkage,indirect
Promotion Mostly personal selling Mostly advertising
Price competitive Competitive toexorbitant
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- producers and manufacturers- trade industries (wholesalers and retailers)
- governments
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A. producers and manufacturers
Those who transform goods and services,through production, into other goods andservices
manufacturing firms (eg. Auto parts, computers)
farms
mining and forest industries
construction and building companies
service companies (trucking, air, rail)
public utilities, banks, insurance companies
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B. Trade Industries
Organizations such as wholesalers and retailers
that buy things for resale to customers
examples - lumber dealers, fabric wholesalers, building
materials
metal and electrical products
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C. Governments
1. Federal Ministries ,
2. Provincial Ministries and
3. Municipal governments and agencies.
examples:
Sindh Police buying Corollas from Toyota .
Security Printing Press buying printing ink from
SIPCA for stamps and bank notes.
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1. Derived Demandmeans the demand is derived (or caused by, or
linked to) demand for a consumer item
Example:
Demand for baking soda is derived from the
demand for bread and bakery items.
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2. Joint Demandmeans the demand is related to the demand for
other industrial things
Example:
The demand for printer cartridges is linked to the
demand for printer paper
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1. Installations
-major assets, factories, heavymachinery
2. Accessory Equipment - used in production- short-lived items eg. tools
3. Raw Materials
4. Component Parts and Materials - finished unitswhich, when assembled, make the complete product
5. Maintenance, Supplies
- maintenance,- cleaning fluids
6. Professional Services
- accounting firms, law firms
Classifying Industrial Products
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1. Capital Itemsthings that last a long time, and
become less and less in value over
time
e.g , machinery and equipment
2. Expense Items
- things that are used within a short
period of time
e.g , parts for the machinery
3. Supplies & Services
Categories of Industrial Products
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Purchases in commercialPurchases in commercial
EnterprisesEnterprisesMultiple influencers :management, consultants
Technical sophistication : Use of forecasting &
planning techniques.
Value Analysis : Systemized techniques for
reducing costs & improving the performance
value of materials,components andmanufacturing process.
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Purchases in GovernmentPurchases in GovernmentWidely dispersed markets: spread over many
Tehsils & municipalities
Complicated procurement Laws : Based on legalrequirements that establish the guidelines for
contractual requirements.
Government selling is complexed & timeconsuming
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5 Areas of competitive5 Areas of competitive
AdvantageAdvantage1. Business Processes
2. Branding
3. Building profit after sale
4. Create front end differentiation
5. Build relationships around