• The place where industrial buyer come into direct contact industrial seller.• Industrial Marketing/ B2B Marketing/Organizational Marketing
• Marketing of Products, services and solutions to organizations.• Unique needs of industrial customers.• Relatively few buyers and Derived demand.• Products used for production of other consumption related products.
Business customers are also known as industrialcustomers, purchase products or services to use in theproduction of other products.Classification of industrial customers• Commercial enterprises• Government customers• Institutional customers• Cooperatives societies
1. COMMERCIAL ENTERPRISES Distribution by size Geographic Concentration2. GOVERNMENT E-Government Influence on Government Buying Understanding Government Contracts
Purchasing ProceduresNumber Of CustomersGroup Purchasing4. CO-OPERATIVE SOCIETIESOpen MembershipSources of FinanceService Motive
* Marketing strategies for industrial customersCommercial enterprisesIndustrial marketer must understand the process & preference of commercial enterprise buying.Different promotional strategy should be used for industrial product sales.Proper communication between marketer & buying center of organization.Assurance of dependable supply.Understanding the requirement of a specific target organisation& building a marketing program around these.
* Government customersBusiness marketer must understand the unique c of challenges selling to federal government units.Contractual guideline fixed price contract cost- reimbursement contractsAuthorized department asked for proposals from qualified suppliers.Reverse trade show concept particularly in provincial & territorial govt.
* Institutional customerBusiness marketer must carefully evaluate the budgeting status of institutional customers.Salesperson must carefully analyze both professional staff & purchasing department.Group purchasing for quantity discount.Discount &effective distribution function play important roles in obtaining & keeping institutions as customers.
Classification of industrial productsCapital equipment and investmentManufactured materials and component partsMRO supplies ( maintenance, repair, operating)Process materialsRaw materialsBusiness servicesOverlapping of categories
B2B MARKETING IS MARKETING OF GOODS AND SERVICES TO : ◦ Companies ◦ Government Bodies ◦ Institutions (i.e. hospitals) ◦ Non-Profit Organizations (i.e. American Red Cross) FOR USE IN PRODUCING THEIR PRODUCTS AND/OR TO FACILITATE THEIR OPERATIONS
Business that sells products or providesservices to other businesses. goods or services are sold for any useother than personal consumption sale of their products or services to othercompanies or organizations that in turn resellthem, use them as components in products orservices they offer. business marketing(industrial marketing)is also called business-to-business marketing
• B2B sale is to a "Business" i.e. organization or firm• Shorter and more direct channels of distribution.• For corporate (E.g; ingredient materials or components) for consumption(E.g. process materials, consulting services) or for resale...• DuPont and IBM spend more than $60 million a day on purchases to support their operations.
Major Uses of B2B Products For additional production For use in operations For resale
Characteristics B2B MarketSales volume GreaterPurchase volume GreaterNumber of buyers FewerLocation of buyers ConcentratedBuyer-seller relationship CloserNature of channel More directKey promotion method Personal Selling
• Their demand is derived from the demand for final consumer goods.• Industrial demand may be inelastic• Buyer interest in price depends on the nature of the product.• Buying is basically concerned with economic factors.• The buyer’s attitude seems to be affected by the tax treatment according to the product.
PURCHASINGORIENTATION ANDPRACTICES OF BUSINESSCUSTOMERS
Component Intermediari & es Subassembly (Distributors Raw Supplier , Dealers)MaterialSupplier Final Assembly Consumers / supplier End users
Industrial marketing environment are those factors and institutions which affect the organization and operation of the business activities. It affects the functioning of the businesses.Nature of Industrial Environment1.Interdependence2.Dynamic3.Media of Social Change4.Adverse Condition5.Uncertainties & Restriction6.Unlimited effect of Uncontrollable Factors7.To keep regular Vigil on the changing environment8.Danger of the Causal Change
Basically Industrial environment has two types: Industrial Environment Internal Environment External Environment Micro / Operating Macro/ General Environment Environment
Internal Environment refers to factor existing within a business firm in the industrial market. These environments are controllable in nature and can be alter or modify to suit the business.It includes the following Factors:Value SystemMission and ObjectiveManagement Structure and NatureInternal Power RelationshipHuman ResourcesCompany Image and BrandOther Factors: Physical Assets and Liabilities R & D and Technological Capabilities Marketing Resources Financial Factors
External Environment refers to the factors existing outside the business firm in the industrial market. The external factors are by and large, beyond the control of the business. The external environment has two types:1. Micro/ Operating Environment: Micro environment consists the company’s immediate environment that affects the performance of company. This environment remains close to the business and affects the ability to work.The micro environment factors are as follows:SuppliersCustomersFacilitatorCompetitorsMarketing IntermediariesPublic
2. Macro/ General Environment Macro environment are general environment of the business and uncontrollable in nature. These factors create opportunities and pose threats to the business. According to Philip Kotler “ Macro environment includes forces that create opportunities and pose threat to the business units. It includes economic, demographic, natural, technological, political and cultural environment”. Political Natural Economical Macro Environment Socio- Demographic Cultural Technological
Environment Analysis is managerial decision making process of assessing andinterpreting the information gathered through scanning. The information is evaluatedfor accuracy, to resolve inconsistencies , and to assign significance. The currentchange are identified and future changes are predicted.The steps of Environment Analysis is as follows: Scanning Monitoring Forecasting Assessment
Industrial environment clearly dictates the need for industrial marketers to developand maintain strategies to influence, modify, or respond to actions within theenvironment that may hinder or aid the achievement of organizational objective.Marketers must adopt a proactive , creative stance with respect to the externalenvironment.The strategies that are available for marketers for environmental management are asmentioned below:Independent Strategies:- Pricing decision, promotion decision etcCooperative Strategies :- Cooperation with other groups, firms or industries (Jointventure) Examples: Myriad computer manufacturer, IBM Compatibles etc.Strategic Maneuvering:- It involves strategic that are designed to alter or changethe firm’s relationship with respect to its interface environment.